The Four CPA Exam Sections: Format, Structure and Content

There are four parts of the CPA exam, for which you’ll register, pay the relevant CPA exam costs, and complete separately. You must get a score of 75 on each of the sections to pass so you can become a CPA.

The four parts of the CPA exam are:

  1. Auditing and Attestation (AUD)
  2. Business Environment and Concepts (BEC)
  3. Financial Accounting and Reporting (FAR)
  4. Regulation (REG)

Even though you take the sections separately, the study plan you follow will include all of the subjects. It’s best to understand in advance how you’re going to approach the test so you get all of the strategy and knowledge you need to pass.

Four parts of the CPA exam

four parts of the cpa exam

The CPA exam is a uniform test

Each of the four sections is broken down into smaller testlets. For AUD, FAR and REG, you will answer multiple choice questions and task-based simulations. In BEC, you will have both of these, plus three written communication tasks. 

There are four hours of testing time per section, with an extra 30 minutes allocated for the welcome, a confidentiality section, a break partway through, and a post-exam survey. There are three other times in which you can take optional breaks while the test timer still runs.

There are three skills that are represented by all of the questions and scenarios. This is essentially what you are being tested on and how it contributes to your final score:

  • Level 1: remembering and understanding, for 15-25%
  • Level 2: application, for 50-60%
  • Level 3: analysis, for 20-30%

Knowing this will help you prioritize your study and understand what to emphasize.

As you follow a CPA exam review study program or self-study, you will want to practice the tests. While they are uniform, there are unique elements to each section that you will have to work on.

Read on to get insight into what each of the four parts of the CPA exam will be like.

Auditing and Attestation (AUD)

auditing and attestation AUD

AUD is all about your ability to audit, or assess, and report, or attest, in different finance-related scenarios. You will be required to apply principles, find and report on information, and display good judgment in conclusions. 

Click here for the AUD Blueprint from the AICPA.

Audit CPA exam content

There are four content areas you will need to know for AUD. Each of these broad areas includes more specific information. It will be important to practice applying information, as that is the primary purpose of this section of the CPA exam.

Area 1: Ethics, Professional Responsibilities, and General Principles

  1. Nature and scope
  2. Ethics, independence and professional conduct
  3. Terms of engagements
  4. Requirements for engagement documentation
  5. Communication with management and those charged with governance

Area 2: Assessing Risk and Developing a Planned Response

  1. Planning an engagement
  2. Understanding an entity’s internal control
  3. Debtor-creditor relationships
  4. Assessing risk due to fraud
  5. Identifying and assessing the risk of material misstatement
  6. Materiality

Area 3: Performing Further Procedures and Obtaining Evidence

  1. Acquisition and disposition of assets
  2. Sampling techniques
  3. Performing specific procedures to obtain evidence
  4. Specific matters that require special consideration
  5. Misstatements and internal control deficiencies
  6. Written representation
  7. Subsequent events and subsequently discovered facts

Area 4: Forming Conclusions and Reporting 

  1. Reports on auditing engagements
  2. Reports on attestation engagements
  3. Accounting and review service engagements
  4. Reporting on compliance
  5. Other reporting considerations

Audit CPA exam format

There are five testlets in AUD. These will include:

  1. Testlet 1: 36 multiple choice questions
  2. Testlet 2: 36 multiple choice questions
  3. Testlet 3: two task-based simulations
  4. Testlet 4: three task-based simulations
  5. Testlet 5: three task-based simulations

Audit CPA exam scoring

The four content areas of AUD are weighted and will contribute to your final score according to the percentages listed below.

  1. Area 1: Ethics, Professional Responsibilities and General Principles for 15-25%
  2. Area 2: Assessing Risk and Developing a Planned Response for 20-30%
  3. Area 3: Performing Further Procedures and Obtaining Evidence for 30-40%
  4. Area 4: Forming Conclusions and Reporting for 15-25%

Business Environment and Concepts (BEC)

business environment and concepts BEC

BEC is all about answering business-related questions. You will have to clearly apply concepts and solve scenarios related to corporate structure, management and the economy.

Click here for the BEC Blueprint from the AICPA.

BEC CPA exam content

There are five areas of knowledge that you will be tested on in the BEC section. Each of these has subcategories you will also need to know.

Area 1: Corporate Governance

  1. Internal control frameworks
  2. Enterprise risk management (ERM) frameworks
  3. Other regulatory frameworks and provisions

Area 2: Economic Concepts and Analysis

  1. Economic business cycles
  2. Market influences on business
  3. Financial risk management

Area 3: Financial Management

  1. Capital structure
  2. Working capital
  3. Financial valuation methods and decision models

Area 4: Information Technology

BEC CPA exam format

There are five testlets in BEC. These are:

  1. Testlet 1: 31 multiple choice questions
  2. Testlest 2: 31 multiple choice questions
  3. Testlet 3: two task-based simulations
  4. Testlet 4: two task-based simulations
  5. Testlet 5: three written communication tasks

BEC is the only section that has written communication tasks. You will have to give a written response that is intended for a specific audience. 

BEC CPA exam scoring

Each individual area of BEC is weighted differently.

Area 1: Corporate Governance, 17-27%

Area 2: Economic Concepts and Analysis, 17-27%

Area 3: Financial Management, 11-21%

Area 4: Information Technology, 15-25%

Area 5: Operations Management, 15-25%

Financial Accounting and Reporting (FAR)

financial accounting and reporting FAR

The FAR CPA exam is a long and comprehensive section of the CPA exam. You will be required to display a strong knowledge of US GAAP. There is a significant quantity of highly technical content you will have to both memorize and apply in proposed scenarios.

Our post on FAR CPA exam tips can help you study for this challenging segment of the test.

Click here for the FAR Blueprint from the AICPA.

FAR CPA exam content

FAR will cover four broad categories with a large number of subtopics. These are:

Area 1: Conceptual Framework, Standard-Setting and Financial Reporting

  1. Conceptual framework and standard-setting for non business entities
  2. General purpose financial statements: for-profit business entities
  3. General purpose financial statements: non-governmental, not-for-profit business entities
  4. Public company reporting topics
  5. Financial statements of employee benefit plans
  6. Special purpose framework

Area 2: Select Financial Statement Accounts

  1. Cash and cash equivalents
  2. Trade receivables
  3. Inventory
  4. Property, plant and equipment
  5. Investments
  6. Intangible assets
  7. Payables and accrued liabilities
  8. Long-term debt
  9. Revenue recognition
  10. Compensation benefits
  11. Income taxes

Area 3: Select Transactions

  1. Accounting changes and error corrections
  2. Business combinations
  3. Contingencies and commitments
  4. Derivatives and hedge accounting
  5. Foreign currency transaction and translation
  6. Leases
  7. Nonreciprocal transfers
  8. Software costs
  9. Subsequent events
  10. Fair value measurements
  11. Differences between IFRS and U.S. GAAP

Area 4: State and Local Governments

  1. State and local government concepts
  2. Format and content of the financial section of the comprehensive annual financial report (CAFR)
  3. Deriving government-wide financial statements and reconciliation requirements
  4. Typical items and specific types of transactions and events

FAR CPA exam format

There are five testlets in FAR. They will include:

  1. Testlet 1: 33 multiple choice questions
  2. Testlet 2: 33 multiple choice questions
  3. Testlet 3: two task-based simulations
  4. Testlet 4: three task-based simulations
  5. Testlet 5: three task-based simulations

FAR CPA exam scoring

The four areas of FAR will weigh differently on your final score.

  1. Area 1: Conceptual Framework, Standard-Setting, and Financial Reporting for 25-35%
  2. Area 2: Select Financial Statement Accounts for 30-40%
  3. Area 3: Select Transactions for 20-30%
  4. Area 4: State and Local Governments for 5-15%

Regulation (REG)

regulation REG

REG covers taxation and law. This includes business law and federal tax procedures. These are complex systems that you will need to study well so that you can apply the principles.

Click here for the REG Blueprint from the AICPA.

REG CPA exam content

REG covers five areas of knowledge. They are:

Area 1: Ethics, Professional Responsibilities and Federal Tax Procedures

  1. Ethics and responsibilities in tax practice
  2. Licensing and disciplinary systems
  3. Federal tax procedures
  4. Legal duties and responsibilities

Area 2: Business Law for 10-20%

  1. Agency
  2. Contracts
  3. Debtor-creditor relationships
  4. Government regulation of business
  5. Business structure

Area 3: Federal Taxation of Property Transactions for 12-22%

  1. Acquisition and disposition of assets
  2. Cost recovery
  3. Estate and gift taxation
  4. Transfers subject to gift tax
  5. Gift tax annual exclusion and gift tax deductions
  6. Determination of taxable estate

Area 4: Federal Taxation of Individuals for 15-25%

  1. Gross income
  2. Reporting items from pass-through entities
  3. Adjustment and deductions
  4. Passive activity losses
  5. Loss limitations
  6. Filing status
  7. Computation of tax and credits
  8. Alternative minimum tax

Area 5: Federal Taxation of Entities for 28-38%

  1. Tax treatment of formation and liquidation of business entities
  2. Differences between book and tax income
  3. C corporations
  4. S corporations
  5. Partnerships
  6. Limited liability companies
  7. Trusts and estates
  8. Tax-exempt organizations

REG CPA exam format

REG has five testlets that will include multiple choice questions and task-based simulations.

  1. Testlet 1: 38 multiple choice questions
  2. Testlet 2: 38 multiple choice questions
  3. Testlet 3: two task-based simulations
  4. Testlet 4: three task-based simulations
  5. Testlet 5: three task-based simulations

REG CPA exam scoring

The five areas of REG are weighted differently and will all contribute to your final score.

Area 1: Ethics, Professional Responsibilities and Federal Tax Procedures for 10-20%

Area 2: Business Law for 10-20%

Area 3: Federal Taxation of Property Transactions for 12-22%

Area 4: Federal Taxation of Individuals for 15-25%

Area 5: Federal Taxation of Entities for 28-38%

CPA Exam FAQs

cpa exam faqs

You may have additional questions about the four sections of the CPA exam. Here are some answers to frequently asked questions about the CPA exam.

Which CPA exam to take first

Scheduling each section of the CPA exam is a personal choice that will largely depend on your study timeline and process. Here are some tips based on the personal experiences of other CPA exam candidates:

  • AUD and FAR contain similar information. Some people feel study time is reduced by taking AUD right after FAR, because the material may overlap.
  • Schedule as your first exam the one that you think you’ll need to study for the most.
  • Use a CPA review course that gives you test readiness scores, so you know when your knowledge for specific sections is thorough enough for the real test.

What order to take the CPA exam

The logical order of the CPA exam, from some a content perspective, is the following:

  1. FAR
  2. AUD
  3. REG
  4. BEC

However, the most important element when deciding which CPA section to take first is your own strengths and abilities. 

You will have 18 months to take all four parts. How you study will largely determine the order in which you should take the sections.

What is the hardest section of the CPA exam?

Based on student feedback, many candidates felt that FAR was the most difficult section of the CPA exam. It covers a huge quantity of information and subtopics. On the other end of the spectrum, BEC is often reported as being the easiest. 

Keep in mind that the entire CPA exam is very hard, so “ease” is relative. If you take a practice exam, you will be able to determine the section that might present the highest challenge for you personally.

Can you take all four parts of the CPA exam at the same time?

You will schedule each of the four parts of the CPA exam separately. They take four hours each. You are allowed to take all four sections within the same testing window. You cannot, however, take the same section in the same testing window (if you fail the first time).

CPA exam: which sections are the most similar?

AUD and FAR may have the most subjects in common. In general, you will find some overlap in concepts on each of the four sections of the CPA exam. However, the answers you provide to various multiple choice questions and task-based simulations will be different, because they are set in the unique context of that test section.

What percentage of people pass all four sections of the CPA exam on the first try?

The AICPA pass rates for the CPA exam in 2020 so far are:

  • AUD 47.97%
  • BEC 61.76%
  • FAR 46.37%
  • REG 55.42%

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