How to Prepare For Certified Public Accountant (CPA) Exam

Preparation Guide for Certified Public Accountant (CPA) Exam

Introduction

For practitioners aspiring to become CPAs, the Standardized Certified Public Accountant test is a credentialing exam. The CPA exam tests are graded and governed by the American Institute of Certified Public Accountants (AICPA) and by the National Association of State Accountancy Boards (NASBA).

The American Institute of Certified Public Accountants (AICPA) is the United States' national professional association of Certified Public Accountants (CPAs), with more than 418,000 members in business and industry, public practice, government, education, student affiliates, and foreign associates in 143 countries. Established in 1887, the association sets ethical guidelines for audits of private businesses, non-profit organizations, federal, state, and local governments for the profession and U.S. auditing standards. It also establishes the Standardized CPA Test and rates it. The AICPA has offices in New York City; Durham, NC; Washington DC; and Ewing, NJ.

This exam guide is intended to get you to know about the exam details and help you to prepare for the Certified Public Accountant (CPA) Exam successfully. This guide includes information on the certification test target audience, recommended preparation and documentation, and a full list of exam targets, all to help you obtain a passing grade. To increase your chances of passing the test, AICPA strongly recommends a mix of on-the-job experience, a study of CPA exam dumps, course attendance, and self-study.

Topics of Certified Public Accountant (CPA) Exam

The CPA Exam test consists of four, four-hour sections. You must clear all four sections within 18 months with a minimum score of 75 on each part. The core topics for each of the four sections are listed below. These contents are likely to be used for the examination. However, on any particular delivery of the test, other similar topics could also appear.

It is recommended that, where possible, the applicant uses these contents and/or other resources to provide background information on the exam objectives. The syllabus for the Certified Public Accountant (CPA) Exam is listed below with detail of each section and their topics:

1. Auditing and Attestation (AUD)

Objectives covered by this section:

Developing a Planned Response & Assessing Risk (20 to 30%)

• Debtor-creditor relationships
• Specific areas of engagement risk
• Entity's internal control
• Materiality
• Planning an engagement
• Assessing and identifying the risk of material misstatement

Professional Responsibilities, Ethics & General Principles (15 to 25%)

• Ethics and professional conduct
• A firm's system of quality control
• Communication with component auditors
• Engagement documentation
• Communication with management
• Nature and scope

Obtaining Evidence & Performing Further Procedures (30 to 40%)

• Sampling techniques
• Performing specific procedures to get evidence
• Acquisition and disposition of assets
• Internal control deficiencies and misstatements
• Subsequent events
• Written representation

Reporting and Forming Conclusions (15 to 25%)

• Other reporting considerations
• Review service engagements
• Reports on attestation engagements
• Reports on auditing engagements
• Reporting on compliance

2. Regulation (REG)

Objectives covered by this section:

Federal Tax Procedures, Professional Responsibilities, and Ethics (10 to 20%)

• Legal duties
• Federal tax procedures
• Responsibilities in tax practice
• Licensing and disciplinary systems

Business Law (10 to 20%)

• Contracts
• Business structure
• Debtor-creditor relationships
• Agency
• Government regulation of business

Federal Taxation of Property Transactions (12 to 22%)

• Gift tax annual exclusion
• Acquisition and disposition of assets
• Gift tax deductions
• Determination of taxable estate
• Cost recovery
• Estate and gift taxation

Federal Taxation of Individuals (15 to 25%)

• Reporting items from pass-through entities
• Gross income
• Computation of tax and credits
• Computation of tax and credits
• Passive activity losses
• Alternative Minimum Tax
• Filing status

Federal Taxation of Entities (28 to 38%)

• Tax-exempt organizations
• S corporations
• Trusts and estates
• C corporations
• Liquidation of business entities & tax treatment of formation
• Limited liability companies
• Partnerships

3. Financial Accounting and Reporting (FAR)

Objectives covered by this section:

Standard-Setting, Conceptual Framework, and Financial Reporting (25 to 35%)

• Conceptual framework
• Special purpose framework
• Public company reporting topics
• Standard setting for non-business entities
• Standard setting and conceptual framework for nonbusiness entities
• General-purpose financial statements

Select Financial Statement Accounts (30 to 40%)

• Investments
• Property, plant, and equipment
• Compensation benefits
• Cash and cash equivalents
• Income taxes
• Intangible assets
• Inventory
• Long-term debt

Select Transactions (20 to 30%)

• Fair value measurements
• Foreign currency transaction and translation
• Subsequent events
• Business combinations
• Research and development costs
• Derivatives and hedge accounting
• Differences between IFRS and U.S. GAAP
• Nonreciprocal transfers
• Leases
• Contingencies and commitments
• Accounting changes and error corrections
• Software costs

State and Local Governments (5 to 15%)

• Specific types of transactions and events: calculation, measurement, presentation in a governmental entity, and valuation
• Comprehensive Annual Financial Report (CAFR)
• Government-wide financial statements
• State and local government concepts

4. Business Environment and Concepts (BEC)

Objectives covered by this section:

Corporate Governance (17 to 27%)

• Regulatory frameworks and provisions
• ERM (Enterprise Risk Management) frameworks
• Internal control frameworks

Economic Concepts and Analysis (17 to 27%)

• Market influences on business
• Economic business cycles
• Financial risk management

Financial Management (11 to 21%)

• Working capital
• Financial valuation methods
• Capital structure

Information Technology (15 to 25%)

• Information security/availability
• IT governance
• Processing integrity
• Systems development of maintenance
• Role of information technology business

Operations Management (15 to 25%)

• Planning techniques
• Performance management
• Cost accounting
• Process management

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What is the duration, language, and format of the Certified Public Accountant (CPA) Exam

• Passing score: 75 for each section
• Format: Multiple choice, Task-based, communication tasks
• Language of Exam: English
• Duration of Exam: 16 hours of total