CPA Exam Syllabus: Overview by Sumit

cpa exam syllabus

Sumit is our CPA exam blogger from India. He writes for us every Monday.

Folks – Thank you for visiting my blog page.

This blog is in response to the query/questions raised by the readers which will provide them an information/guidance about the course content.

Here is a detailed information/content about the CPA exam syllabus. CPA is broken down into 4 sections –

  1. Auditing and Attestation (AUD)
  2. Financial Accounting and Reporting (FAR)
  3. Regulation (REG),
  4. Business Environment Concepts (BEC)

Audit and Attestation

This section mainly focuses on the all aspects of auditing in relation to controls testing, Procedures and professional judgment to apply the same. Content covered in this subject is mentioned below –

Chapter 1: Audit Reports

  • Audited financial statements: The basics
  • Professional standards
  • Reports on audited financial statements
  • Reports on comparative financial statements
  • Events occurring after year end
  • Reporting on other information 

Chapter 2: Other Reports

  • Other engagements, reports and accounting services
  • Preparation, Compilation and review of financial statements
  • Reporting on comparative financial statements
  • Review of interim financial information
  • Letters of underwriters
  • Attest engagements

Chapter 3: Engagement Acceptance, Planning and Risk Assessment

  • Engagement acceptance and understanding the assignment
  • Planning and supervision
  • Audit risk
  • Fraud risk
  • Compliance with laws and regulations
  • Assessing the risks of material misstatement
  • Internal control
  • Responding to the assessed risks of material misstatement

Chapter 4: Audit Evidence

  • Audit Evidence
  • Audit procedures by transaction cycle
  • Other audit procedures
  • Evaluating audit findings

Chapter 5: Sampling and Communication

  • Audit Sampling
  • Internal control communications
  • Communication with those charged with governance
  • Management representations 

Chapter 6: Professional responsibilities, Audit documentation, Effect of IT, Government auditing and Quality control

  • Professional responsibilities
  • Audit documentation
  • The effect of information technology on the audit
  • Government auditing
  • Quality control standards

Finance Accounting and Reporting

This section covers various aspects of the financial reporting practiced in the modern day business enterprises, or government entities. FAR encompasses the key differences between GAAP basis and IFRS basis. Content covered in this subject is mentioned below –

Chapter 1: Standard setting, Income statement and Reporting Requirement

  • Accounting standard and conceptual frameworks
  • Income statements
  • Comprehensive income
  • Balance sheet and disclosures overview
  • Going concern
  • Interim financial reporting
  • Segment reporting
  • SEC reporting requirement

Chapter 2: Matching (Revenue and Expenses)

  • Timing issues: Matching of revenue and expenses, correcting and adjusting accounts
  • Long term construction contracts
  • Accounting for installment sales
  • Accounting for non-monetary exchanges
  • Financial reporting and changing prices
  • Foreign currency accounting
  • Other financial statement presentations

Chapter 3: Marketable Securities and Business Combinations

  • Marketable securities
  • Business combination/consolidation
  • Cost method (external reporting)
  • Equity method and joint ventures (external reporting)
  • Consolidated financial statements
  • Acquisition method
  • Intercompany transactions
  • Combined financial statements/push down accounting

Chapter 4: Working Capital and Fixed Assets

  • Working capital and its components
  • Inventories
  • Fixed assets
  • Depreciable assets and depreciation
  • Fixed asset impairment

Chapter 5: Leases, Liabilities and Bonds

  • Present value and annuities
  • Accounting for leases
  • Long term liabilities and bonds payable

Chapter 6: Pensions and Income tax Accounting

  • Pension plans
  • Post-retirement benefits and other than pensions
  • Other deferred compensation and benefits
  • Accounting for income taxes

Chapter 7: Stockholders equity, Cash flows and Ratio analysis

  • Stockholders’ equity
  • Earnings per share
  • Statement of cash flows

Chapter 8: Governmental Accounting

  • Governmental accounting overview
  • Modified accrual accounting
  • Deferred outflows and inflows of resources
  • Governmental Funds
  • Proprietary Funds
  • Fiduciary Funds

Chapter 9: Governmental and nonprofit organizations

  • Governmental accounting
  • Not for profit organization

Chapter 10: Fair value, Partnerships, Review of IFRS vs US GAAP

  • Fair value measurement
  • Partnerships
  • Variable interest entities
  • Asset retirement obligations
  • Troubled debt restructurings
  • Other liabilities and debt covenants
  • Estimated and accrual liabilities
  • Contingencies
  • Subsequent events
  • Financial instruments
  • Review of IFRS vs. US GAAP
  • Liquidation basis of accounting

Regulation

This section comprises of basic understanding of business ethics. It is combination that covers the ethics and responsibilities of business laws and federal taxation. Content covered in this subject is mentioned below –

Chapter 1: Individual tax – income

  • Individual taxation: Filing status
  • Individual taxation: Exemptions
  • Individual taxation: Gross income
  • Employee stock options

Chapter 2: Individual tax – Adjustments, Deductions and Credits

  • Adjustments and itemized deductions
  • Tax calculation and credits
  • Individual taxation: other taxes
  • Individual taxes: other items
  • Tax standards and research

Chapter 3: Corporation

  • Corporation
  • Small business corporations
  • Exempt organizations
  • Multijurisdictional tax issues
  • Other tax issues

Chapter 4: Property, Partnership

  • Property taxation
  • Partnership taxation
  • LLC taxation
  • Estate, trust and gift taxation

Chapter 5: Professional responsibilities and Securities Regulation

  • Ethics and Professional responsibilities in tax services
  • Sarbanes-Oxley Act of 2002
  • Federal, Legislative, and judicial processes, the IRS and taxpayer penalties
  • CPA Legal liability
  • Securities regulation

Chapter 6: Business Law 1

  • Contracts
  • Sales
  • Copyrights and patents

Chapter 7: Business Law 2

  • Commercial paper
  • Secured transactions
  • Bankruptcy

Chapter 8: Business Law 3

  • Surety ship and creditors’ rights
  • Agency
  • Business structures
  • Employer – employee law
  • Money laundering
  • Antitrust law
  • Documents of title
  • Dodd frank Act of 2010

Business Environment and Concepts

This section is touted as one of the most challenging exams because of its extensive material, and deals with business and economic concepts. It acquaints you with financial management information technology, and business strategies. In addition to accounting concepts, you will also be introduced to English writing skills. Content covered in this subject is mentioned below –

Chapter 1

  • Corporate Governance
  • Operations management: Performance measurement
  • Operations management: Cost measurement

Chapter 2

  • Planning Techniques: Forecasting and projection
  • Planning Techniques: Budgeting and analysis

Chapter 3

  • Financial modeling projections and analysis
  • Capital management, including working capital 

Chapter 4

  • Organizational needs assessment
  • System design and other elements
  • Security
  • Internet implications for business
  • Types of information systems and technology risks
  • Disaster recovery and business continuity

Chapter 5

  • Changes in economic and business cycles
  • Economic measures/indicators
  • Market influence on business strategies 

Chapter 6

  • Operations management: Process management
  • Operations management: Project management
  • Globalization and local economies
  • Financial risk management
  • Financial decisions
  • Financial valuation
  • Internal auditing standards

There are no secrets to success. It is the result of preparation, hard work learning from failure”

Watch out for my next blog next week.

Note from Stephanie

Thanks for your sharing Sumit. Different review course providers may arrange the exam content in different chapters, but the coverage is the same. You may want to check out the official Content Specification Outline (CSO) from AICPA here.

About the Author Sumit G

Hello, I am Sumit, an Audit Senior at KPMG Global Services in India. We serve Channel Islands team (UK) in their Auditing tasks. I have an MBA in Finance and I plan to start my CPA Journey in January 2016.

  • Pooja says:

    Hi Sumit,

    Congratulations on your achievement, you sure are an inspiration. I have settled in the US and plan to take up the CPA exam in April 2016. Can you please tell me which books did you refer to for your exam preparation?

    Thanks,
    PM

  • Arun says:

    Hi Sumit.

    I am Arun Prasad from Bangalore, India. I am interested in taking up CPA. However my qualified with B.com and currently working on my Enrolled agent course (SEE) exams. Am i still eligible for CPA?
    If not what are the options available for me to meet my eligibility requirement?

    Awaiting your positive response

    Thanks
    Arun Prasad

  • GUNCHA chopra says:

    Hi Sumit,
    I want to pursue CPA but would want good coaching so that I could prepare well.
    Since you have mentioned that you have take private coaching and summariesd notes.
    Could you please share the details of private coaching and notes available

    Thanks
    GUNCHA

  • Anoushka Baghla says:

    Hi Sumit.

    Many congratulations for your success Sumit. Really inspiring!

    I am Anoushka, currently residing in Jaipur. I completed my graduation in 2014 and my CA-Inter in 2012. I dropped out of CA Finals last month since I couldnt clear it for the third time and have decided to pursue CPA now.

    Can you tell me if I’ll be able to land a good job in India for gaining the work experience for the CPA license after I clear my CPA exams, with my level of educational qualification and experience? Is there a good scope for CPAs in India?

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