CPA Exam Syllabus: Overview by Sumit

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. (Note: The CPA Exam is changing in 2024, after Sumit initially wrote this post. If you’re planning to take the CPA Exam in 2024, be sure to read our post about the 2024 CPA Exam changes.)

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

Auditing and Attestation (AUD)
Financial Accounting and Reporting (FAR)
Regulation (REG),
Business Environment Concepts (BEC)

Audit and Attestation

This section mainly focuses on 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 of 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 audits
Quality control standards

Finance Accounting and Reporting

This section covers various aspects of the financial reporting practiced in modern-day business enterprises or government entities. FAR encompasses the key differences between the GAAP basis and the IFRS basis. The 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 a 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

Suretyship 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. The 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.