If you’re thinking of pursuing the career path of a CPA, you need to know a few stats and facts. In today’s competitive job market, earning top-level certifications like the CPA helps set you apart and impress potential employers. But, before you become a CPA, you need to pass the CPA exam. In this article, we tell you everything about the CPA.
Let’s look at a few predictions:
- Global accounting software market is forecasted to hit $20 million by 2026.
- 82% of small businesses and 58% of enterprises use cloud accounting solutions
- In the USA, the mid-range salary for accountants and auditors was about $73,560 in 2020.
Source: Balance Everything – Accounting Stats of 2021
Let’s get right into it.
Certified Public Accountant or CPA is a designation given to those who pass the CPA exam. It is the highest honor bestowed upon accountants in their industry. Accountants who have the CPA title are admired and respected by their peers and employers. It is because attaining a CPA is no easy task and requires years of commitment.
The exam has four levels, and candidates must pass all four to get the CPA designation.
You have four hours to take each exam, for a total of sixteen hours.
The exam is divided into four levels because there is a lot of material that needs to be covered. Additionally, the order in which you take the exam is your choice.
As mentioned before, passing the CPA exam is not easy. It is notorious for being one of the toughest exams to pass. Over 100k candidates take the test every year, and only 50% pass the exam. The pass rate is low because the CPA exam requires you to study vast material and know it by heart.
However, you do not have to stress as the Wiley CPA prep course has you covered.
With that said, let’s talk about CPA exam requirements.
You must know the fundamental requirements of the CPA exam that you must meet.
All states require that you be 18 years of age at the time of the exam. In addition, they require that you complete your bachelor’s degree from an accredited university or have at least 120 hours of college credits.
In some states, you must complete your bachelor’s in accounting or business-related subjects. Additionally, in some states, you must have a minimum of 150 hours of college credits. Furthermore, you must have at least 24 semester hours in accounting and business-related coursework in most states.
You must also have a valid social security number in most states. Some states also require you to be a citizen. You can check with the state you live in to find out more.
Now, let’s talk about the content of the CPA exam.
As mentioned before, the exam has four levels: Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), Regulation (REG), and Business Environment and Concepts (BEC).
The Auditing and Attestation exam has seventy-two questions in multiple-choice format. In addition, it has eight simulation tests. It covers Comparisons between international auditing standards and US auditing standards, planning, acquiring, and evaluating information, internal controls, communication preparations, violations, and punishments. Also, you need to know the International Accounting Standards.
The Financial Accounting and Reporting exam has sixty-six questions in multiple-choice format. In addition, it has eight simulation tests. It covers the financial reporting process and accounting standards used by government agencies. Additionally, you have to create financial statements, cash flow statements, income statements, and equity, among others.
The Regulation exam has seventy-six questions in multiple-choice format. In addition, it covers business law, tax procedures, business transactions, rights and duties of creditors, debtors, and guarantors, and the IRS audit and appeals process.
The Business and Economic Concepts exam has sixty-two questions in multiple-choice format, four simulation tests, and three written communication tests. It covers economic concepts, business structure, IT, financial management, operational management, strategic planning, and financial risks.
In addition, it covers corporate governance, global business cycles, and their impact on businesses.
With that said, let’s talk about how the CPA exam gets scored.
The CPA exam gets developed by the American Institute of Certified Public Accountants (AICPA). They are also the ones who grade the exams.
The exam gets graded on a scale of zero to ninety-nine. To pass each exam, you have to get a score of 75 or above.
The total score gets determined by the multiple-choice questions and additional tasks in each exam. The multiple-choice questions amount to 50% of the final grade. In addition, simulation tests amount to 35% of the final score. Lastly, written tasks amount to 15% of the final grade.
The CPA is also known as Certified Public Accountant. It is the highest certification one can attain in the accounting industry. The CPA designation garners admiration and respect from colleagues and industry peers.
It can also help you stand out. However, it is not easy to attain this gold standard as the CPA exam is the toughest to beat.
Before taking the exam, you should know the fundamental requirements like age, citizenship, and academic requirements. In addition, you should also know what is on the test to prepare effectively. Lastly, you should know how the exam gets scored so that you can spend the appropriate amount of time on each section.