US CPA in China: Exam Performance + Pass Rate Trend

In 2013, there were 1,007 applicants applied directly from China. As the CPA title gradually gains reputation in the country, the increase of Chinese applicants was impressive with a 3-year growth rate of 207%.

(This post will be updated with 2015 data once from NASBA is available)

US CPA in China: Growth Rate and Pass Rate

First Timer vs Retakers

Around 70% of the candidates were first timers (pass rate at 49.9%). The large proportion is due to the fact that there were a lot more new applications, and that Chinese candidates were able to pass the exam within 12-18 months.

Gender Split

Another interesting observation is that there were a lot more women taking the exam: 3/4 were female, whereas the portion is 50/50 among US and Canada, 38% in India and as low 18% in Egypt.

Pass Rate by Part

The relative performance by part is similar to that in global average: BEC being the highest and AUD being the lowest.
US CPA in China

Chinese candidates have been doing well — the overall pass rate of 48% was only a tad lower than the global average of 49%. FAR scored even higher. Among the international candidates, their performance was only second to Canada and Lebanon.

global-vs-china-us-cpa-pass-rate-2013

Pass Rates by Age

us-cpa-in-china-pass-rate-by-age-2013

(x-axis: age in terms of number of years; y-axis: number of candidates)

The age of Chinese candidates is quite evenly distributed. Younger candidates seem to do better at 52%, than those in mid-thirties at 44%. This is understandable as the “exam taking prowess” declines with age, and older candidates have more commitments in work and family.

us-cpa-in-china-next-attempt-2013

(x-axis: number of months since first attempt;
left y-axis: number of candidates; right y-axis: number of attempted sections)

This chart is showing the number of months required to pass the 4th part (i.e. compete the CPA exam), and the number of attempted sections along the way.

A good number of Chinese candidates need 12-18 months to complete the exam. Within this category, they had 5.2 attempts, meaning 4 success passes for each part plus 1.2 retake.

For those who complete the exam within 6 months, almost all of the were able to pass all on first attempt, as they only needed 4.1 times to complete 4 parts.

As the process drags on, the number of attempts increases. Overall, Chinese candidates did pretty well with an overall number of attempts at 5.5: lower than the US and global average (6.6 times).

FAR Performance by Content Area

In terms of performance by exam section, we have data that can further split the performance by content area within each part. This is indicated by the percentage of candidates receiving a “comparable” or “stronger” in their score reports. This can be seen as something similar to pass rates.

FAR CPA exam

Content Area Stands for:Weighting
 Frm Std Framework and standards 17-23%
 Fin Sta Financial statement accounts 27-33%
 Spc Trn Specific transactions / events 27-33%
 Govt Governmental accounting 8-12%
 NFP Not-for-profit accounting 8-12%

Chinese candidates outperformed the global average in the financial accounting areas (first three content areas), showing they have a strong sense in US GAAP and accounting in general.

They didn’t do as well comparatively in governmental accounting and not-for-profit accounting, likely because they are not familiar with the specific rules and concepts. I agree that these two modules look “weird” to those who haven’t taken such course before, but once you understand how they work, they are actually quite straight-forward, and are easy ones to tackle.

AUD Performance

AUD CPA exam

Content Area Stands for:Weighting
 Un Eng Understanding the engagement12-16%
 Un Ent Understanding the entity16-20%
 Pro Evi Procedure and evidence16-20%
 Evi Rpt Evaluation and reporting16-20%
 Acct Rev Accounting and review services12-16%
 Pro Res Professional responsibilities16-20%

AUD is the area for Chinese candidates to work on. The area with the biggest discrepancies with global average are:

  • Understanding the Engagement
  • Evaluation and Reporting
  • Accounting, Review Services
  • Professional Responsibilities

with more than 10 percentage point difference.

The good thing is that the sim performance is more or less the same as the global average. No worries on that part.

REG Performance

REG CPA Exam

Content Area Stands for:
Weighting
Eth Leg Ethics and legal responsibilities15-19%
Bus Law Business law17-21%
Fed Tx Federal tax process11-15%
Tx Pro Taxation on property transactions 12-16%
Tx Ind Taxation on individuals13-19%
Tx Ent Taxation on entities18-24%

The REG performance was also quite well considering Chinese candidates were least familiar with REG coverage among the 4 exam sections.

One important part to focus on is ethics and legal responsibilities. Chinese and Indian candidates did poorly in this seemingly straightforward section (we are talking about 20 percentage point difference here). My gut feeling is that the general idea of professional ethics is not as emphasized in these two countries. If so, this is even a bigger reason for Chinese to take note in this important global trend.

BEC Performance

BEC CPA exam

Content Area Stands for:Weighting
Crp Gov Corporate governance16-20%
Eco Con Economics concepts and analysis16-20%
Fin Mgt Financial management 19-23%
Info Sys Information systems 15-19%
Str Plan Strategic planning10-14%
Op Mgt Operations management12-16%

For BEC, Chinese candidates did better than their global counterparts except for Corporate Governance and Information System.

Corporate Governance is in some ways quite similar to Ethics and therefore candidates can use the same approach to improve this section. For Information System, it covers a very broad topic with many obscure technical terms. The idea is not to memorize all those but to try imagine yourself in the IS staff’s situation and how this person uses IT for audit and accounting purposes.

Not surprisingly, the written communication is another area for improvement. You can find my tips page right below.

For Your Further Reading

Data Source

About the Author Stephanie Ng

I am the author of How to Pass The CPA Exam (published by Wiley) and the publisher of this and several accounting professional exam prep sites

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  • Ty says:

    Hey Stephanie! Thank you for the article! Question: Why doesn’t the NASBA make a test site for the CPA exam in China? Thanks!

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