CPA Sections: Discover What They Are | I Pass the CPA Exam

What Are the 4 CPA Exam Sections? An Overview of AUD, BEC, FAR, and REG

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Passing the CPA Exam is a big hurdle in your professional career, and you may be wondering, “what are the 4 CPA Exam sections?” I’m here to make your journey a little easier by sharing my knowledge about the 4 CPA exam sections and how to get ready for it.

To give you the best chances of getting high scores, you need to show up on exam day knowing as much about the exam’s format, layout, and sections as possible.

What Is the CPA Exam?

The Uniform Certified Public Accountant Examination, or CPA Exam for short, is a professional exam that tests your knowledge of certain minimum accounting concepts and skills that a CPA should have. The AICPA, or American Institute of Certified Public Accountants, develops the CPA Exam. Furthermore, the AICPA, the 55 U.S. Boards of Accountancy, the National Association of State Boards of Accountancy (or NASBA), and Prometric testing centers jointly administer the CPA Exam.

How Many CPA Exam Parts?

There are 4 parts of CPA Exams that you must pass before you can apply for the CPA license. The 4 CPA Exam parts are Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, and Regulation. Also, each exam lasts 4 hours, so you will dedicate 16 hours total to taking the CPA Exam. But don’t let the CPA Exam length scare you—you don’t have to take all 4 CPA parts at once. In fact, you can take the 4 sections of the Certified Public Accounting test over 18 months if you prefer. That is, once you complete your first exam, you have a rolling CPA window of up to 18 months to take and pass all sections.

Exam Requirements to Become a CPA

Each jurisdiction in the United States (that is, each of the 55 states and territories) has slightly different requirements to become a CPA. I’ve outlined all the CPA requirements in-depth, but I’ll go over the big points here, too.

You have to meet a set of requirements that CPAs refer to as the 3 Es. Although the details slightly vary from state to state, in general, the 3 Es are:

  • Education: You must earn a bachelor’s degree and at least 150 hours of general education credits.
  • Exam: You must take and successfully pass all four sections of the CPA Exam in 18 months.
  • Experience: You must have at least 1 year of accounting experience that meets certain standards.

Some jurisdictions have a 4th E—ethics—and also require candidates to pass a CPA ethics exam. Consequently, the ethics exam goes over certain ethical circumstances that you might encounter in your career and gauges your ability to apply ethical standards appropriately. Although jurisdictions have the right to use their own ethics exam, most use the CPA Ethics Exam made available by the AICPA.

What Are the CPA Exam Sections: The 4 Parts of the CPA Exam

The CPA Exam has four parts that are referred to as AUD, BEC, FAR, and REG. Let’s go over each section and the breakdown of the content in each.

AUD: Auditing and Attestation

AUD focuses on several topics related to auditing and assurance services often executed in public sector accounting. So, be prepared for questions about AICPA’s professional code of conduct and audit procedures. Some specific contents include:

  • Audit and non-audit engagements
  • How to apply professional judgment
  • Engagement documentation
  • How to communicate with management, auditors, and others
  • Planning engagements
  • Assessing risks

BEC: Business Environment and Concepts

In the BEC section, you’ll address questions about somewhat broad accounting and finance topics. Additionally, other questions will cover:

  • Economic concepts and business cycles
  • Understanding financial markets
  • Assessing financial risks
  • Financial valuation and decision models
  • The role of IT systems in accounting
  • Understanding business operations

FAR: Financial Accounting and Reporting

As the name suggests, the FAR section assesses your knowledge of financial accounting and reporting frameworks. Therefore, be prepared to answer questions about frameworks used by public and non-public business entities. What’s more, you’ll also be required to understand the frameworks for not-for-profit entities and state and local governments. Some specific topics may include:

  • Standards issued by the International Accounting Standards Board, the AICPA, and the U.S. Securities and Exchange Commission, among others
  • FASB Accounting Standards Codification
  • Financial statements
  • Financial disclosures

REG: Regulation

Sometimes referred to as the “AICPA tax section” because of the amount of tax-related material covered, the REG section tests your knowledge about U.S. taxes. Additionally, the AICPA uses REG to test ethics related to tax preparation and U.S. business laws. Be prepared for some of these topics:

  • Ethics for tax return preparers
  • The requirements for maintaining your CPA license
  • Federal tax procedures and penalties
  • The legal implications of business transactions
  • Federal income tax for individuals
  • Federal income tax for a variety of entities

A note: these are the topics that are likely to be on the CPA Exam, but you could encounter related issues, too. So be prepared! Enrolling in a CPA Exam review course is the best way to make sure that you’re ready for whatever questions the CPA test throws at you.

What’s the Breakdown of Content in the CPA Sections?

Once or twice a year, the AICPA publishes and updates the AICPA CPA Exam Blueprints, which outline the minimum level of knowledge and skills that a CPA candidate must have before licensure. Therefore, these skills are likely to be covered in the CPA Exam sections. The Blueprints even state the high-level concept that might appear on the CPA Exam, the tasks you might have to perform, and the score weight for each type of content area. However, the Blueprints are not studied materials, and you should not try to study using them.

Basically, the CPA examination will test your skills in remembering and understanding accounting concepts, applying those concepts, analyzing problems, and evaluating situations. Furthermore, the evaluation skill level is only tested on AUD and is considered the most challenging level. According to the AICPA Blueprints, here are the content breakdown and the score weight for each content area:

AUD

  • Ethics, Professional Responsibilities, and General Principles 15-25%
  • Assessing Risk and Developing a Planned Response 20-30%
  • Performing Further Procedures and Obtaining Evidence 30-40%
  • Forming Conclusions and Reporting 15-25%

BEC

  • Corporate Governance 17-27%
  • Economic Concepts and Analysis 17-27%
  • Financial Management 11-21%
  • Information Technology 15-25%
  • Operations Management 15-25%

FAR

  • Conceptual Framework, Stand-Setting, and Financial Reporting 25-35%
  • Select Financial Statement Accounts 30-40%
  • Select Transactions 20-30%
  • State and Local Governments 5-15%

REG

  • Ethics, Professional Responsibilities, and Federal Tax Procedures 10-20%
  • Business Law 10-20%
  • Federal Taxation of Property Transactions 12-22%
  • Federal Taxation of Individuals 15-25%
  • Federal Taxation of Entities 28-38%

CPA Exam Format

Each section of the CPA Exam is divided into smaller testing units referred to as “testlets.” Also, the exam uses Instead types of questions to gauge your content knowledge: multiple-choice questions (MCQs), task-based simulations (SIMs or TBSs), and written communications.

Multiple-Choice Questions (MCQs)

You’ll probably be familiar with the format of the multiple-choice questions from other standardized tests in your academic career. Each question will be accompanied by 4 possible answers. You are supposed to choose the best answer. But keep in mind: if you think two or more answers are equally correct, you should re-read the question stem. There will only be one “best” response.

Here’s how many CPA MCQs you will find on each section of the exam:

  • AUD: 36 questions per testlet for a total of 72
  • FAR: 33 questions per testlet for a total of 66
  • REG: 38 questions per testlet for a total of 76
  • BEC: 31 questions per testlet for a total of 62

Therefore, a total of 276 multiple-choice questions appear across all four sections of the CPA Exam.

Task-Based Simulations (SIMs)

It’s important to understand how to answer SIMs because they are a large part of your overall score. Basically, these questions “simulate” instances in which you need to have specific accounting skills to complete tasks. The CPA Exam has 6 general types of simulations: research, free-response numeric entries, option lists, journal entries, document reviews, and written communications.

Written Communications

Written Communications only appear in the BEC section. However, they can cover the content covered on any of the four CPA Exam sections. These problems give you a real-world scenario in which you might have to write a memo or other communication to explain an accounting issue. So, these responses are like essays that test your ability to write and communicate business problems clearly.

Breakdown of Questions: Weighting

The four parts of the CPA Exam use a have the following scoring weights:

  • AUD: 50% MCQs + 50% SIMs
  • FAR: 50% MCQs + 50% SIMs
  • REG: 50% MCQs + 50% SIMs
  • BEC: 50% MCQs + 35% SIMs + 15% written communications

CPA Exam FAQs

In What Order Should I Take the CPA Exam?

You can decide the order of your exams. Since the FAR exam covers many topics that overlap with the other sections, a lot of CPA candidates take FAR first.

How Many Exams for CPA?

Don’t let the numbers confuse you—there is only one CPA Exam. However, the AICPA has broken the exam into four sections so that you don’t have to sit through a 16-hour test in one day!

How Long Is the CPA Exam?

Each section of the 4-part CPA Exam lasts 4 hours. It is possible to finish early, but most candidates use the full 4 hours per section.

What’s the Best Way to Study for Each Section?

Since each section covers different materials, your study approach to sections might be different. For example, if you already have a lot of auditing experience, you might not have to study as long for AUD. Consequently, you may have to study longer for another section where your content knowledge is weaker. Or, if you struggle with writing, you might need to study for the BEC section differently because 15% of that section is devoted to written communications.

Overall, I recommend that you enroll in a CPA Exam review course. A good course will help you identify your weakness and study for the exam with more efficiency. What’s more, you should also review the sample tests and review the testing platform function video provided by the AICPA.

Do Long Do I Have to Pass?

Once you pass your first section’s exam, you have 18 months to take and pass the other three sections.

How Is the CPA Exam Scored?

The answer to this question is complicated, so I have a full-length article about grading the CPA Exam, too. Here’s the brief answer:

The AICPA scores the exams with a computer. (Humans do score BEC sections if scores are close to the pass mark of 75.) The testlets are adaptive; so, your performance on one testlet will determine if you subsequently receive a testlet of higher or similar difficulty. And as you may expect, more difficult questions have higher point values.

What’s the Minimum CPA Exam Score?

You must receive a passing score of 75. However, this number does not represent a percentage. Rather, it is a score that is calculated on the percent of correct questions and the percent of high vs. medium-level difficulty questions answered.

You must score at least a 75 on each section of the exam. If you do not receive this score, you must re-take that section of the CPA Exam.

More Information + Free CPA Advice

I know it seems like you have to jump through a lot of hoops to get your CPA license. But for me, it’s been worth it. Plus, I’m happy that I’m now in a position to help other CPA candidates. If you need other free CPA Exam info and tips, please sign up for my free CPA Exam advice today.

About the Author Stephanie Ng

I am the author of How to Pass The CPA Exam (published by Wiley), and I also passed all 4 sections of the CPA Exam on my first try. Additionally, I have led webinars, such as for the Institute of Management Accountants, authored featured articles on websites like Going Concern and AccountingWeb, and I'm also the CFO for the charity New Sight. Finally, I have created other accounting certification websites to help mentor non-CPA candidates. I have already mentored thousands of CPA, CMA, CIA, EA, and CFA candidates, and I can help you too!

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