Passing the Uniform CPA Exam is an essential step towards getting the coveted CPA license. But before studying, it’s a good idea for all candidates to familiarize themselves with what they are up against.
The exam consists of four sections. Each of these focuses on separate subject areas. You should spend some time in understanding the manner in which you will be tested and the structure of the individual exams.
Additionally, there are rules regarding the dates on which you can take the exam. You must pass all four sections within a specific timeframe. If you don’t, your exam credit for one or more sections could be invalidated.
Let’s review these topics by examining:
- The 4 sections of the CPA exam and
- The implication of the “testing windows” that are available to take the exam
Exam Format: The 4 Sections
The four sections of the Uniform CPA exam are:
- Auditing and Attestation (AUD)
- Business Environment and Concepts (BEC)
- Financial Accounting and Reporting (FAR)
- Regulation (REG)
Each section contains five testlets, which are smaller groups of test questions.
A testlet may comprise a number of Multiple-choice questions, Task-based simulations, or Written communication tasks:
Multiple-choice questions (MCQs) – each of the four sections contains two multiple-choice testlets.
Task-based simulations (TBSs) – these are case studies that replicate real-life situations. A TBS tests your understanding of practical accounting or business issues. There are either two or three TBS testlets in each section.
Written communication tasks – these are restricted to the Business Environment and Concepts sections. The other three sections do not contain written communication tasks. You will be asked to read an outline of a business-related situation and then write an appropriate response. This response could be in the form of a letter or a memo.
Now, let’s examine the four sections and get an idea of the subject areas that each of them covers.
The following tables describe the examination content and the respective weight of the content matter within the sections. Keep reading for some additional answers to frequently asked questions!
Auditing and Attestation (AUD)
| Content area allocation | Weight | |
|---|---|---|
| I. | Ethics, Professional Responsibilities and General Principles | 15-25% |
| II. | Financial Accounting and Reporting (FAR) | 20-30% |
| III. | Regulation (REG) | 30-40% |
| IV. | Application Fee: | 15-25% |
The Auditing and Attestation (AUD) exam is comprised of 72 multiple-choice questions (MCQs) and 8 Task-based simulations (TBSs) divided into five testlets. The 72 MCQs account for 50% of this section, while the 8 TBSs comprise the remaining part.
This section tests your ability to apply your auditing and attestation skills to solving problems.
You should know that of the 72 MCQs and 8 TBSs, only 60 MCQs and 7 TBSs will count towards your exam score. The remaining are “pretest items” that will not affect your score.
Q: What is a pretest item?
A: A pretest item is used to create questions for subsequent CPA exams. These are not scored.
Q: How can you tell if a question is operational or just a pretest item?
A: You can’t. That’s why you must attempt each part of the exam. Don’t make the mistake of assuming that a particular question is a pretest item and ignore it.
Business Environment and Concepts (BEC)
| Content area allocation | Weight | |
|---|---|---|
| I. | Corporate Governance | 17-27% |
| II. | Economic Concepts and Analysis | 17-27% |
| III. | Financial Management | 11-21% |
| IV. | Information Technology | 15-25% |
| V. | Operations Management | 15-25% |
The Business Environment and Concepts (BEC) exam contains five testlets:
- Testlet 1 – 31 Multiple-choice questions
- Testlet 2 – 31 Multiple-choice questions
- Testlet 3 – 2 Task-based simulations
- Testlet 4 – 2 Task-based simulations
- Testlet 5 – 3 Written communication tasks
This section also contains several pretest items. Of the 62 MCQs, 12 are pretests, and there is one pretest TBS. The Business Environment and Concepts section is the only one to contain a testlet on written communication. Only two of the written communication questions are operational; one is a pretest item.
Q: How important are each of the testlets in the BEC section?
A:The two Multiple-choice testlets account for 50% of the total possible score while the Task-based simulations carry a 35% weight. The remaining 15% of your score will be based on the written communication testlet.
Financial Accounting and Reporting (FAR)
| Content area allocation | Weight | |
|---|---|---|
| I. | Conceptual Framework, Standard-Setting and Financial Reporting | 25-35% |
| II. | Select Financial Statement Accounts | 30-40% |
| III. | Select Transactions | 20-30% |
| IV. | State and Local Governments | 5-15% |
The Financial Accounting and Reporting (FAR) exam contains five testlets, of which the first two comprise 33 multiple-choice questions each. 54 of the 66 questions are operational and the remaining 12 are pretest items.
The third testlet contains two task-based simulations. Testlets #4 and #5 contain three TBSs each. Of the total of eight TBSs, seven are operational, and one is a pretest item.
As far as the item weighting is concerned, the Multiple-choice questions account for 50% of the total possible score and the Task-based simulations for the remaining 50%.
Understanding multi-stage testing
Each of the four sections of the CPA Uniform exam contains two Multiple-choice question testlets. The first MCQ testlet is always a “medium” testlet. This means that its questions are of a medium level of difficulty.
If you score well in the first MCQ testlet, the second Multiple-choice question testlet that you are given will be more difficult to solve. However, if you don’t do very well in the first testlet, you will receive another medium MCQ testlet.
Doesn’t this system imply that you are penalized if you score well in the first MCQ? Why should you have to answer a more difficult testlet if you have answered a greater number of Multiple-choice questions correctly in the first MCQ testlet?
You shouldn’t be worried about this because the characteristics of the test questions are taken into account when your answers are being scored. The primary reason that multistage testing is used is that it allows your proficiency level to be determined with a higher degree of accuracy.
You should also know that the multi-stage approach is adopted only for Multiple-choice question testlets. The difficulty level of your Task-based simulation testlets and written communication testlets is not determined by how well you did in the MCQs.
Regulation (REG)
| Content area allocation | Weight | |
|---|---|---|
| I. | Ethics, Professional Responsibilities and Federal Tax Procedures | 10-20% |
| II. | Business Law | 10-20% |
| III. | Federal Taxation of Property Transactions | 12-22% |
| IV. | Federal Taxation of Individuals | 15-25% |
| V. | Federal Taxation of Entities | 28-38% |
The Regulation (REG) exam contains five testlets:
- Testlet 1 – 38 Multiple-choice questions
- Testlet 2 – 38 Multiple-choice questions
- Testlet 3 – 2 Task-based simulations
- Testlet 4 – 3 Task-based simulations
- Testlet 5 – 3 Task-based simulations
The 76 MCQs (64 operational, 12 pretest items) and the eight TBSs (seven operational and one pretest item) account for 50% each of the total possible score.
Testing windows
The CPA Uniform exam used to be held four times a year and the dates on which it was offered were called “testing windows.” There is one testing window in each calendar quarter:
- Quarter 1: January 1 to March 10
- Quarter 2: April 1 to June 10
- Quarter 3: July 1 to September 10
- Quarter 4: October 1 to December 10
Previously, the exam wasn’t held on the dates that fall outside these testing windows. However, ongoing global events such as the COVID-19 pandemic have resulted in many changes to how nearly every institution handles their scheduling. As a result, NASBA introduced Continuous Testing for the second half of 2020, resulting in the following testing windows:
- Window 1: January 1, 2020 to March 10, 2020
- Window 2: April 1, 2020 to June 30, 2020
- Window 3: July 1, 2020 to December 31, 2020
Q: How do you go about making a request to take the exam?
A: The first step is to apply to the Board of Accountancy. If you are found to be eligible, you will receive a Notice to Schedule (NTS). The NTS has a validity period of six months. You can use your NTS to schedule your exam.
Remember the following points when you are scheduling your CPA exam:
- You will receive an NTS for every section of the Uniform CPA exam that you are eligible to take.
- The NTS has limited validity; once it expires, it cannot be reused.
- You can choose to take one or more sections of the CPA exam during a particular testing window. You can even take all four sections during the same testing window if you are eligible.
- However, you are not allowed to take the same section more than once in the same testing window.
Your exam credit has an 18-month validity
You must pass all four sections of the Uniform CPA exam in an 18-month rolling period. The actual date of the examination section will be considered to determine this period. You will lose credit for any section that you passed outside the 18-month period.
This rule can result in the examination credit for one or more sections expiring if you exceed the 18-month validity period.
Q: What can I do if I let one or more of my exam credits expire?
A: Unfortunately, your only option is to retake the relevant section or sections.
It’s crucial that you keep this issue in mind when you are preparing for the exam. You must ensure that you pass all four sections within the 18-month validity period. Failing to do so can set you back by several months, and it could mean spending far more time on preparing for the exam than necessary.
Getting your scores
Q: How soon after you take the exam can you expect your scores?
A: Typically, your scores will be released on a rolling basis.
However, there is a score hold for the fourth quarter of 2020. If you take your exam in the period from October 1 to November 30, 2020, your target score release date is December 11, 2020. That’s the date on which the National Association of State Boards of Accountancy (NASBA) will release scores to the individual Boards of Accountancy. Your Board of Accountancy may then take another day to process and release the score.
The score release dates for the exam taken from December 1 to December 10, 2020, is December 19.
The rolling system for score release will resume from the first quarter of 2020.
If you take the exam in the testing window that is available in the first quarter of 2020, your score release dates will be:
| Exam taken on/before: | Score release date |
|---|---|
| January 20, 2020 | February 5 |
| February 14, 2020 | February 26 |
| February 28, 2020 | March 8 |
| March 10, 2020 | March 19 |
The Bottom Line
Passing the Uniform CPA exam isn’t easy. You need to score a minimum of 75 in each section and you must also pass all four sections within an 18-month rolling period. This requires hard work and preparation; it also requires a certain amount of planning.
It’s advisable to schedule your exam as soon as possible after receiving your NTS. Doing this will increase the chances of receiving your choice of exam date and location. Once you know your schedule, you can devote your time and energy to the essential task of studying for the exam.
Bryce Welker is a regular contributor to Forbes, Inc.com, YEC and Business Insider. After graduating from San Diego State University he went on to earn his Certified Public Accountant license and created CrushTheCPAexam.com to share his knowledge and experience to help other accountants become CPAs too. Bryce was named one of Accounting Today’s “Accountants To Watch” among other accolades. As Seen On Forbes