My 10-Step Plan to BEAT the CPA Exam!

Best CPA Review Course

 

Welcome to my CPA Exam Guide! My name is Jess, and if you are brand new to the CPA exam process or struggling through it after recent setbacks, this is the guide for you! I am confident that you will appreciate the information in this guide and that it will help you in your mission to PASS the CPA exam.

 

If you want a six-month plan that lays out how you can go from no CPA knowledge whatsoever to becoming certified, look no further.

 

Step 1: Learn About The CPA Exam

 

From the words of the AICPA:

 

“The Uniform CPA Examination protects the public interest by helping to ensure that only qualified individuals become licensed as U.S. Certified Public Accountants (CPAs). Individuals seeking to qualify as CPAs – the only licensed qualification in accounting – are required to pass the CPA Examination.

 

What this boils down to is that having CPA certification means that you are qualified above all other candidates to handle a career in finance and accounting. In order to enforce this lofty claim, the AICPA has strict education, age, and residency requirements that must be met prior to sitting for the exam. (Refer to Step #3 for specific requirements)

 

CPA Exam Format

 

CPA Exam Format

To test the knowledge of every candidate and ensure that they are fully ready to handle the obligations of an accountant, the CPA exam is split into four different sections, covering the following:

 

Financial Accounting & Reporting (FAR)

 

Section #1: Financial Accounting & Reporting (FAR)

Financial Accounting and Reporting is the largest section of the CPA exam. It is centered around general accounting knowledge, such as how to file different costs and account transfers. In addition, this section touches on general concepts relating to finance, resulting in a test that will gauge your specific and theoretical knowledge in the field.

 

FAR is made up of the following primary topics:

Conceptual Framework and Financial Reporting (25-35%)
Select Financial Statements Accounts (30-40%)
Select Transactions (20%-30%)
State and Local Governments (5%-15%)

 

You knowledge of the following information will be tested in each section:

 

Conceptual Framework and Financial Reporting (25-35%)

1) Conceptual framework and standard-setting 2) General-purpose financial statements: for-profit business entities3) General-purpose financial statements: nongovernmental, not-for-profit entities
4) Public company reporting topics5) Financial statements of employee benefit plans6) Special purpose frameworks

 

Select Financial Statements Accounts (30-40%)

Cash and cash equivalentsTrade receivablesInventory
Property, plant and equipmentInvestmentsIntangible assets
Payables and accrued liabilitiesLong-term debtEquity
Revenue recognitionCompensation and benefitsIncome taxes

 

Select Transactions (20%-30%)

Accounting changes and error correctionsBusiness combinationsContingencies and commitments
Derivatives and hedge accountingForeign currency transactions and translationLeases
Nonreciprocal transfersResearch and development costsSoftware costs
Subsequent eventsFair value measurementsDifferences between IFRS and U.S. GAAP

 

State and Local Governments (5%-15%)

State and local government conceptsFormat and content of the Comprehensive Annual Financial Report (CAFR)
Deriving government-wide financial statements and reconciliation requirementsTypical items and specific types of transactions and events in governmental entity financial statements

 

What Is The FAR Exam’s Structure?

When taking the FAR portion of your CPA exam, 2 testlets of 33 multiple choice questions each will be given, resulting in a total of 66 multiple choice questions that you need to answer. Additionally, 3 more Testlets contain a total of 8 Task Based Simulation questions, structured more closely as word problems. These questions are split among the 3 testlets in 2 groups of 3 and 1 group of 2.

 

How Much Time Do You Have To Complete the FAR Exam?

In total, 4 hours are given for you to complete this portion.  You are not required to use the entire length of time to complete the exam, and you will have the opportunity to take a 15 minute break that doesn’t count against this time limit.

 

How Is the FAR Exam Graded?

When being graded, some of the questions you answer on the FAR exam are pretested. This means they won’t affect your grade and are merely to gauge the effectiveness of the exam. Out of the entire exam, 12 multiple choice questions and one task-based simulation question will not count toward your final grade.

There is an even amount of weight given to both styles of question on the FAR exam, meaning your success in answering the simulation questions has equal bearing on your grade to the multiple choice questions.

 

Regulation (REG)

 

Section #2: Regulation (REG)

The Regulation or REG section of the CPA exam is the second largest. It covers many different aspects of taxes and business law in comprehensive detail.

 

The REG exam portion is comprised of the following:

1) (10-20%) Ethics, Professional Responsibilities, and Federal Tax Procedures
2) (10-20%) Business law,
3) (60-80%) Federal Taxation

 

Within each of these subtopics, you will be tested on your knowledge of the following:

 

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

Ethics and responsibilities in tax practiceLicensing and disciplinary systems
Federal tax proceduresLegal duties and responsibilities

 

(10-20%) Business law

ContractsAgency
Business structureDebtor-creditor relationships
Government regulation of business

 

(60-80%) Federal Taxation

Federal taxation of individualsFederal taxation of entities
Federal taxation of property transactions

 

What Is The REG Exam’s Structure?

The REG portion of the CPA exam contains 2 testlets of 38 multiple choice questions each, adding up to 76 multiple choice questions total. In addition, 3 testlets are also included with 8 task based simulation questions, divided among each testlet into 1 group of 2 and 2 groups of 3.

 

How Much Time Do You Have To Complete the REG Exam?

Much like the FAR portion of the CPA exam, you are given 4 hours to complete this portion as well. Also similar is the optional 15 minute break you are allotted that doesn’t count against this time limit.

 

How Is The REG Exam Graded and Weighted?

When being graded, 12 of the multiple choices questions and 1 of the task-based simulation questions aren’t counted. This is because they are pretested and are only used to verify how effective the test it. The REG Exam is weighted similarly to the FAR exam, with half of your grade being determined by the multiple choice section and the other half being determined by the simulation section.

 

Auditing & Attestation (AUD)

 

Section #3: Auditing & Attestation (AUD)

AUD Auditing and Attestation is not the largest section of the CPA exam, but it is considered by the majority of test takers to be the most difficult. It covers many different aspects of auditing and attestation in a comprehensive manner.

 

The AUD exam is comprised of the following:

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

 

Out of these four primary topics, you will be expected to understand these subtopics within each main section:

 

(15-25%) Ethics, Professional Responsibilities and General Principles

Nature and Scope of Audit and Non-Audit EngagementsEthics, Independence and Professional ConductTerms of Engagement for Audit and Non-Audit Engagements
Requirements for Engagements DocumentationCommunication with Management and Those Charged with GovernanceCommunication with Component Auditors and Parties Other Than Management and Those Charge with Governance
A Firm’s System of Quality Control, Including Quality Control at the Engagement Level

 

(20-30%) Assessing Risk and Developing a Planned Response

Planning an EngagementUnderstanding an Entity and Its EnvironmentUnderstanding an Entity’s Internal Control
Assessing Risks Due to FraudIdentifying and Assessing the Risk of Material Misstatement and Planning Further Procedures Responsive to Identified RisksMateriality
Planning for and using the Work of Others, Including Group Audits, the Internal Audit Function and the Work of a SpecialistSpecific Areas of Audit Risk

 

(30-40%) Performing Further Procedures and Obtaining Evidence

Understanding Sufficient Appropriate Audit EvidenceSampling TechniquesPerforming Specific Procedures to Obtain Evidence
Specific Matters that Require Individual AttentionMisstatements and Internal Control DeficienciesWritten Representations
Subsequent Events and Subsequently Discovered Facts

 

(15-25%) Forming Conclusions and Reporting

Reports On Auditing EngagementsReports On Attestation EngagementsAccounting and Review Service Engagements
Reporting On ComplianceOther Reporting Considerations

 

What Is The AUD Exam’s structure?

The actual exam divided up in a similar manner to the REG and FAR portions of the CPA exam, with 2 testlets comprised of a total 72 multiple choice questions and 3 testlets containing 8 task based simulations. One thing that is different about this portion when compared to the FAR and REG portions is the addition of document review simulations, but they are still split in the same manner of 2 testlets with 3 questions and 1 testlet of 2 questions.

 

How Much Time Do You Have To Complete AUD?

You are given 4 hours to complete the AUD exam, with an optional 15 minute break in the middle that doesn’t count towards this time limit.

 

How is the AUD Exam Graded and Weighted?

When being graded, there are 12 multiple choice questions and 1 task-based simulation question that will not count toward your final grade due to pretesting purposes. Once the remaining questions are calculated, your final exam grade will be weighted equally between both forms of questions; 50% multiple choice and 50% task-based simulations.

 

Business Environment and Concepts (BEC)

 

Section #4: Business Environment and Concepts (BEC)

Business Environment and Concepts is the shortest of the CPA exam sections, but you should still be prepared for a difficult testing session. It comprehensively covers general business concepts outside of the sphere of general accounting.

 

The BEC Exam is comprised of the following:

1) 17-27% Corporate Governance
2) 17-27% Economic Concepts and Analysis
3) 11-21% Financial Management
4) 15-25% Information Systems and Communications
5) 15-25% Operations Management

 

These four primary topics are made up of questions concerning the following subtopics:

 

17-27% Corporate Governance

Internal control and enterprise risk management frameworksOther regulatory frameworks and provisions

 

17-27% Economic Concepts and Analysis

Financial risk managementEconomic and business cyclesMarket influences on business

 

11-21% Financial Management

Capital structureWorking capitalFinancial valuation methods and decision models

 

15-25% Information Systems and Communications

IT governanceRole of IT in business
Processing integrity (input/processing/output controls)Systems development and maintenance
Information security/availability

 

15-25% Operations Management

Cost measurement concepts, methods and techniquesVariance analysisProcess management
Planning techniques

What Is The BEC Exam’s Structure?

The actual exam is organized into 2 testlets containing 31 multiple choice questions each with a combined total of 62. There are also 3 testlets that contain 4 total task-based simulations and 3 written communications, which are essentially essay questions. These are split into 2 groups of 2 task-based questions and 1 group of 3 written communications.

 

How Much Time Do You Have To Complete the BEC Exam?

You are given 4 hours to complete the BEC exam, with an optional 15 minute break in between.

 

How is the BEC Exam Graded and Weighted?

When being graded, 12 multiple choice questions, 1 task-based simulation question, and 1 written communication question is pretested and not counted in your final grade. In a departure from the way the other 3 portions of the CPA exam is weighted, this BEC exam is weighted as follows:

  • 50% Multiple Choice
  • 35% Simulations
  • 15% Written Communications

 

Additional Testing: Ethics

Depending on what state you live in, you may be required to complete additional ethics-based training in order to receive a CPA license. These states include Minnesota, California, New Jersey, and Texas, while some states such as Pennsylvania, Kentucky, Georgia, and Arkansas do not require ethics certification. The most popular ethics course used for this purpose is the AICPA’s Professional Ethics: The AICPA’s Comprehensive Course. As an open-book CPE program that emphasizes self-study, it can be completed at any time during the CPA licensing process. You are usually required to pass an ethics exam within two years before applying for certification.

 

The Good News: CPA Certification and Your Career

It can be overwhelming and stressful to consider all of the information you’ll need to know before becoming a licensed CPA. Don’t be discouraged, you can do it! In order to help motivate you to succeed, let’s discuss what passing the CPA exam can do for your future career.

 

Prestige

Just by passing the CPA exam, you will automatically set yourself from the vast majority of accountants and finance professionals working today. Based on the most recent census data from 2006, there are about 646,000 active CPA in the United States. That’s over half a million, which may not sound so exclusive and prestigious at first. However, when you consider that almost 2 million people work in accounting today, that number seems a lot more impressive.

 

Employment

By passing the CPA exam, you instantly join an elite group of finance professionals. This boost in prestige will give you a leg up on the competition when it comes to looking for work. According to the Bureau of Labor Statistics, there are a little less than 1.5 million accounting jobs available in the United States. Being CPA certified will help you to be first in line when employers consider applicants to fill one of these job positions.

 

Career Versatility

In addition to helping you find a career in finance and accounting, a CPA exam certificate is recognized in many other fields as well. Many positions in the government and academics look favorably on CPA certified applicants, which will make transitioning to one of these careers or industries much easier for you.

 

Income

The benefits listed above are nice to have, but the greatest benefit of CPA by far is the monetary advantage you will have over your non-certified peers. There is a very real tangible benefit that becoming a CPA can have on your income, as you can see from the following infographic:

 

Accounting Career Salaries Infographic

Source: Wiley CPAexcel

If you want to be the best and most successful accountant you can be, then passing the CPA exam is the best course of action you can take.

 

With Step 2, we will go over what kind sacrifices you should expect to make in order to become CPA certified. Don’t be scared and remember what they say: if you’re going through hell, keep going!

 

Step 2: Prepare Yourself Mentally For The CPA Exam

 

If you are serious about passing the CPA exam on your first try, then it is of the utmost importance that you devote all of your time and effort into planning and studying for it. This is an extremely tough test, and you will need it to be your full focus with no distractions in order to succeed.

 

If you are not 100% mentally prepared to devote long hours every day for the next few months towards studying for the CPA exam, you will inevitably procrastinate, lose focus and fail the test. Now, it isn’t the end of the world if you try and fail and have to retake the exam. However, if you plan it right the first time, you will save yourself the time, grief, and money that comes with the retesting process.

 

How Long Should I Study for the CPA Exam?

 

The majority of popular and reputable CPA review courses recommend that you study for a total amount of somewhere between 300-400 hours. This is a large time commitment for sure, and it can be incredibly difficult to devote that much time to studying if you’re preoccupied with a job or other classes.

 

You may be considering spreading those hours out over a longer period of time: something like 3-4 months per section, resulting in a total study time of around 1 year. This way, you wouldn’t have to make drastic lifestyle changes and could study for the CPA exam in your free time.

 

Unfortunately, this is the wrong attitude to have.

 

 

 

The best way to pass the CPA exam is to take the most advantage of your short term memory. You want to cram for the exam in a shorter period of time so the knowledge is fresh in your head the day of the test.

 

 

This may sound counterintuitive at first. After all, it flies in the face of most traditional academic logic that encourages you to cement information in your long-term memory over long years of study.

 

You have to think about CPA test prep differently from college or high school or any other educational program. The less time you give yourself to study, the more pressure you are going to feel to make progress, and the fresher the material will be on exam day.

 

If you give yourself 16 weeks to study, you may find it difficult to stay motivated. With your deadline so far away, it can be difficult to stay in ‘all out study mode’ because you feel like your study time is limitless.

 

If you spend too much time studying, once you finally reach the end of your long journey it is highly likely that you will forget most of the information you learned at the beginning. That’s why it’s so important to strike a balance between enough time to learn all of the material and a short enough period to keep you in crunch mode.

 

Based on the research I have conducted, this is what I recommend:

 

Keep a hard deadline of 7-9 weeks. If you do this, you are going to feel immediate pressure to get things done. Additionally, having a shorter period of time like this makes it easier to cut all of the distractions out of your life, since you can then return to your regular obligations sooner. In that 7-9 week period, however, you need to eat, breathe, and sleep the CPA exam.

 

The CPA exam is supposed to test your ability to perform under pressure and in high-stakes situations, so giving yourself a taste of that pressure will help you perform when it counts. Plus, you won’t have to waste a year of your life studying!

 

Step 3: Learn About CPA Exam Requirements In Your State

 

It can be confusing to figure out exactly what is required of you before taking the CPA exam, as it varies from state to state. A great way to eliminate some of the anxiety from the exam is to know without a shadow of a doubt exactly what is required from you in order to take it.

 

5 Step Process – Signing Up for the CPA Exam:

 

Signing up for the CPA exam shouldn’t be the scariest part. However, if you find yourself experiencing pre-exam anxiety, following these 5 steps will help you stay oriented towards your goal.

 

  1. Review the exam requirements for your state (see link at the end of this step)
  2. Submit your exam application and find a CPA review course that works best for you
  3. Request copies of your transcripts and forward them to your state’s accountancy board
  4. Pay your exam fees and receive a notice to schedule (NTS)
  5. Schedule your exam at a local Prometric center

 

What Are The CPA Exam Educational Requirements?

Here’s some general information about the different education requirements to start you off. Keep in mind that this is just a summary; a full list of each state’s requirements can be found at the end of this chapter.

 

These are the four major educations requirements you will need to meet before taking the CPA exam:

 

Requirement #1 – Degree

  • All states will require you to have a Bachelor’s degree in accounting at the very least. The majority of states will require a masters in accounting or an equivalent level of higher education.

Requirement #2 – Semester Hours

  • In addition to the required degree, states have now started requiring a cumulative total of semester hours spent studying accounting. Depending on the state, you may require 150 semester hours or 120 semester hours in order to sit for the exam.

Requirement #3 – Course Credits

  • You are required to verify that you have completed the appropriate amount of course credits in accounting, business law, and other required classes that will vary depending on your state.

Requirement #4 – Forms

  • Regardless of what state you plan on taking the CPA exam in, you will be required to send your college transcripts and CPA exam application to your State Board Of Accountancy. First time applicants will need to allow 4-6 weeks for the completion of the form submission process.

 

What Are the CPA Exam Residency Requirements?

Out of all the states and provinces you can apply for the CPA exam in, which is the best one for you? Surprisingly, it may not be the one you are living in right now! Most states don’t require proof of residency in order to take the exam there, so you may be able to find a state near you with lighter requirements.

 

Understanding the different CPA exam residency requirements by state is crucial, especially if you plan to work in a different state than the one you currently live in. It’s possible for you to take the exam in one state and then transfer your CPA credits to another state entirely, once you have established residency and wish to become licensed there.

 

This is a strategy I’ve heard from many licensed CPA professionals who now work very satisfying careers. With a bit of forethought and research, you can find yourself saving time and money by starting your career earlier than you may have initially expected.

 

What are the CPA Exam Age Requirements?

Did you know some states don’t have any age requirement at all to take the CPA exam? Great news for all you teenage accounting enthusiasts – in some states, you can become a licensed CPA before you’re even old enough to vote!

 

What is the Youngest CPA

 

 

Some states do require you to be a certain age, usually around 21 years old, before taking the exam. Don’t worry, though; the majority of states don’t have this age requirement at all. Just ask Belicia Cespedes, the woman who received her CPA licensing at the ripe old age of 17!

Source: AICPA

 

What Are The CPA Exam Citizenship Requirements?

For all of you aspiring international CPA candidates, I have some good news for you!

 

Certain states will allow you to take the CPA exam as a non-US citizen. However, some states will still require you to provide proof of citizenship, so non-residential immigrants will need to be mindful of these particular areas when planning their CPA path.

 

If you would like to know the exact CPA exam requirements for each state, you can find out by clicking this link.

 

Step 4: Plan For Your Trip To The Prometric Testing Center

 

prometric CPA testing center

 

If you’ve ever been to the Pentagon, you probably have a good idea of what it’s like to enter a Prometric test center.

 

You may think I’m kidding, but I’m really not. The security at these testing centers is insane, and they are constantly on the lookout for anyone trying to cheat on their exam.

 

If you don’t know, Prometric is a national standardized testing center. They work with the National Association of State Boards of Accountancy (NASBA) to proctor CPA exams. Here are some important rules you need to know before entering a Prometric testing center:

  1. No calculators allowed
  2. No writing materials (paper, pen, pencils) allowed
  3. No electronic devices (phones, watches, portable game consoles) allowed
  4. All visitors will undergo a thorough security scan (TSA-style)

Here are some additional rules you may need to follow in special circumstances, according to the NASBA:

  1. You must bring two forms of ID (driver’s license, passport, etc.) that match your NTS
  2. You must arrive at least 30 minutes early to make sure you have enough time to sign in and go through security
  3. You must place all personal belongings in a locker that will be provided to you

Once you’ve signed in and gotten through all the security checkpoints, you’re finally ready to take the CPA exam. While taking it, you will have a countdown timer present that tracks the amount of time you have remaining to finish the exam.

 

After each testlet you will also be given the opportunity to take an optional break. You are granted one 15-minute break that will not count against your time. However, any additional breaks that you take, even to go to the bathroom, will be counted against your remaining time!

 

Step 5: Understand How The CPA Exam Is Graded

 

It can be difficult to fully grasp how the CPA exam is graded. Fortunately, the AICPA has a helpful resource that can assist you in understanding the entire process.

 

The CPA exam is extremely complex exam, containing many different variables that can affect your final score. For instance, receiving a grade of 75 does not mean you got 75% of the questions correct. Instead of an exact grade, your score functions more as a percentile, showing you how well you did on the exam compared to everyone else who has taken it. To my best understanding, these are the factors that go into your final exam score:

  1. As I mentioned in Step 1, some of the exam questions for each section are pretested questions. These are questions that aren’t graded in your final score because they are used to evaluate how effective the exam is overall. It does not matter to your grade if you answer these questions correctly or incorrectly.
  2. Something else worth noting is that the CPA exam is an adaptive test. This means that it changes based on what questions you correctly answer. Depending on how you answer one multiple choice section, subsequent multiple choice questions can be easier or harder as a result.
  3. Multiple choice questions are weighted based on their difficulty. This means that answering the right multiple choice questions correctly can matter as much as, if not more than, answering the most multiple choice questions correctly. An individual who answers more low-weighted questions correctly may end up with a lower score than an individual who answered a few high-weighted questions correctly.

 

The Key Takeaway

The reason why I’m sharing this information with you is to illustrate that there really isn’t a way for you to know how you did on the CPA exam immediately after finishing it. Whether you think you nailed it or you blew it, you simply won’t be able to know until you receive the results.

 

There are just too many variables to account for. Don’t try to calculate them in your head, because it will just make you will lose motivation and stress you out. Just stay motivated, take your exam sections as they come, and move on to the next one once you’re finished. There’s no use looking back; just keep moving forward!

 

Step 6: Learn the Right Way and the Wrong Way to Sign Up for the CPA Exam

 

Are you interested in saving hundred of hours of your free time and potentially thousands of dollars of your disposable income while taking the CPA exam? If so, this section will contain information you will want to know.

 

This step covers:

  1. How many CPA exam sections to enroll in at a time
  2. What order you should take each section
  3. How much you should budget for CPA exam fees

 

The Single Biggest Exam Scheduling Mistake You Can Make

 

When signing up for the CPA exam for the first time, this is the biggest mistake you can make.

 

Under no circumstances should you ever sign up for all 4 sections in a row.

 

You may be unbelievably confident in your abilities. You may have observed all your peers passing the exam on their first try and think to yourself “I had better grades than them, this exam must be a piece of cake!” You may be 100% convinced that you can and will pass all 4 sections the 1st time through.

 

Have you stopped to consider what happens if you fail even one portion of the CPA exam? This foolhardy confidence can completely undermine months of hard work and hundreds of dollars of your own money!

 

Let’s unpack this trainwreck of a scenario. Why is this the biggest mistake you can possibly make when signing up for the exam?

 

Notice to Schedule (NTS)

Before we identify the mistake, let me explain some important information about the application process. Once your transcripts and application have been approved and you’re cleared to take the exam, your state’s board of accountancy will send you a notice to schedule. Here’s a sample NTS for reference purposes:

 

Notice To Schedule CPA Exam

 

Depending on which state you are taking the CPA exam in, you will be given a period of around 6-9 months to take each section. If you schedule all 4 parts at once, you will have a deadline of roughly 6 months to schedule and attend each section of the exam or you will lose your fees.

 

Are you beginning to see how this could cause problems if you fail one section? Having to retake one section without properly budgeting out time to prepare can prove disastrous. It’s true that some time constraints can inspire you to study harder, but you don’t want that same kind of stress come exam day, believe me.

 

Getting back to the subject at hand: depending on how many sections you sign up for, they will be listed on your NTS form with the earliest and latest dates you can take the exam on. You will also need to have your section ID and Launch Code password ready for when you’re at the Prometric center, so you don’t want to forget your NTS when you head in for your first exam.

 

Very important: make sure all of your personal information matches the information on your different forms of ID that you plan to bring to the testing center.

 

 

The Right Way to Schedule Your CPA Exam

 

Now that you have a better understanding of what happens after your CPA exam application gets approved, here is my tip for the best way to schedule your exam:

 

Sign up for 2 sections at a time.

 

 

If you plan your testing period out this way, you can take your first section, start studying for your second section afterward, and then find out the scores for your first exam after a month. This way, you can devote all of your focus and energy on these 2 exams as they occur. Then, once you’ve received the results from your first exam, you have the option to either retake it if you failed or sign up for your third exam.

 

I am begging you, please don’t make the mistake of signing up for all 4 sections at once! You can easily trigger a domino effect that will cost you dearly. Just sign up for two exams at a time, retake them if you have to, and take it from there. You will make the most of your exam fees and ensure you have enough time and focus to pass at least one or two of the exam sessions.

 

In What Order Should I Take The CPA Exam?

 

What is the best order to take the CPA exam

 

 

Your friends and peers may swear that a specific arrangement of exam sections will ensure the highest probability of success, but there’s no real basis for one order being better than any other.

 

At the end of the day, it’s a grueling and stressful experience to take the CPA exam no matter how you slice it. The question you should be trying to answer instead is…

 

What Exam Order Works Best For YOU?

 

During my research into CPA test prep, I have heard three different theories on what order you should take the CPA exam. You can see them below, as well as some reasons why I think they’re flawed.

 

Tip 1: Start with the easiest/hardest section first.

People will suggest that you either schedule your hardest section first so you can get it out of the way, or that you schedule the easiest section first so you can ease into the rest of the exam. The problem with this strategy is that you won’t know what sections are the easiest or hardest for you when you’re scheduling them, only when you start studying.

 

Tip 2: Start with the FAR exam and end with BEC exam.

This is a popular choice, since the FAR is commonly considered the hardest and the BEC is considered the easiest. In a hypothetical situation, you should have no problem handling the BEC if you’ve already completed the much more intimidating FAR, but the problem with this strategy is the same as the last; you simply won’t know which section will be easy or hard to you.

 

Tip 3: Start with the BEC to build up confidence

This is an idea which is based on the premise that the BEC exam is the easiest one. Ensuring you take the easiest exam while you’re fresh and energized can increase your likelihood of passing that section at the very least, but this strategy could come at the expense of your other section’s scores. You definitely don’t want to feel fatigued when it’s time for the FAR exam!

 

My Advice

 

Here’s my recommendation for you: start with the topic you are most familiar with.

 

If your educational background is primarily in taxes and business law, then you may want to take REG first. If you have some experience with or knowledge of auditing, take AUD. If you’re majoring in business, you’ll want to try BEC, and finance majors will want to take FAR.

 

This strategy is most effective if you are taking the CPA exam right out of college. The section that is most applicable to your college background will seem easier for you than the others if you are able to take that university knowledge and apply it to the exam.

 

Another effective piece of general advice is to approach all exam sections equally, not drastically changing your study strategies because you assume certain sections will be easier/harder than others.

 

While it may never hurt to over-study, it will almost definitely hurt if you understudy.

 

What is the Average Cost To Take The CPA Exam?

CPA Exam FeesCPA Exam Cost
CPA Review Course$1,750
Application Fee$100
Exam Fees (All 4 Sections)$775
Registration Fee$250
Ethics Exam Fee$150
Licencing Fee$250
Total CPA Exam Cost$3,275

CPA Exam Fees Breakdown

I know, I know: $3,000 dollars is a lot of money. You might be wondering why becoming CPA certified costs this much and what each of the aforementioned fees are actually for. Here’s a handy breakdown of what you’re paying for when you sign up for the CPA exam.

 

Quick Tip: You can save a bit of money on CPA exam fees if you are a veteran. According to the U.S. Department of Veteran Affairs, you can receive exam fee reimbursements of up to $2,000!

 

CPA Review Course

This may seem like an optional fee since it isn’t really a requirement to be enrolled in a study course before taking the exam. However, considering how a good CPA course can mean the difference between passing the exam on your first try and failing, wasting your money, and being forced to schedule a retake, this really shouldn’t be considered optional. (More on this in the next step)

 

My personal recommendation for you is to sign up for a CPA review course once you’ve scheduled your exam date. The reason as to why you should sign up in that specific time frame is because some of the more popular CPA review courses will only grant licenses for a certain period of time. You can ensure that you get the most use out of your review course this way.

 

Application Fee

 

Your first real expense when signing up for the exam, besides the review course, is the application fee. This fee can vary depending on what state you are applying to take the exam in, with a typical range of $50-$200. This fee covers the cost of having your application and college transcripts processed. In order to avoid additional fees, make sure that you have all the information you need the first time to prevent the need to reapply later.

 

Examination Fees

Examination fees are, as you may have expected, the fees for taking each section of the CPA exam. The total cost of these fees can vary from state to state, but an average range is around $175 to $200. This cost can increase if you fail a section of the exam, since you will unfortunately be required to pay the fee for that section again for any retakes.

 

Registration Fee

For each section of the CPA exam you take an additional registration fee is charged. From what I can tell, there is little to no justification for this fee; it’s just something tacked on to take more money from you. Sorry, that’s just how it is!

 

The registration fees vary depending on what state you are in when scheduling the exam. In many cases, discounts on these fees are available if you register for multiple exams at the same time. For example, registering for just one exam costs around $60, but registering for two at once can cost around $80. This deal increases the more sections you register for, with deals of around $99 for three sections at once and $180 for all four.

 

This may make it very tempting for you to sign up for all 4 sections at once and save some money on these fees. However, remember what I told you earlier; it’s a bad idea to sign up for all 4 sections at the same time. You may recall that your NTS only lasts 6 months. What that means is that you would have to complete all 4 exams in that short period of time, giving you no time left over to retake any sections you messed up on.

 

Trust me, you do not want to sign up for all four sections at once. If you fail even one section, you can end up wasting your registration fees and your other exam fees. You can take slight advantage of the registration fee discount by scheduling two exams at once, but any more than that is a bad idea.

 

Ethics Exam Fee

For the states that require you to complete their Ethics exam, you will have to pay a fee in order to take their test. This fee can cost anywhere from $125 to $200, depending on the state. My advice for you is to hold off on this one until you have the four CPA exam sections under your belt first; this exam is usually not covered by your NTS, meaning you have more time to complete it.

 

Licensing Fee

This is going to be your favorite fee of all, because it means you’ve finally made it!

 

Once you have passed all four CPA exam sections, completed any additional ethics requirements, and clocked in enough hours of work experience, you are officially ready to become a licensed CPA.

 

This is usually an annual fee that ensures your active status as a licensed CPA. It will vary from state to state, costing anywhere from $50 to $500 a year. You will have to continue paying this fee if you are working as a public accountant and want to maintain your licensed status in that state.

 

Additional CPA Exam Fees

Don’t put away your wallet yet; there’s just a few more fees you’ll need to pay! Some of these fees are optional, while others will only apply to special situations. However, it doesn’t hurt to be informed of these extra charges so you can budget accordingly.

 

Continuing Education (CPE)

In order to maintain your license, you will need to complete 120 hours of continuing professional education or CPE per year. There are a plethora of CPE providers that come in a variety of different forms. Depending on your lifestyle and availability, you can take self-study courses, online webinars, and even live physical classes.

 

Most of these services will offer a year’s worth of CPE credits for a price of around $150 to $600, depending on what specific area you wish to pursue education.

 

Supplemental CPA Review Materials

Sometimes, one CPA review course just isn’t enough to prepare you for the exam. It’s okay, there’s no shame in needing a little extra help!

 

If you fail one section of the CPA exam despite taking a study course, you will probably want to invest in some fresh study questions to help you brush up on your sticking points. It’s also a good idea to use some premade flashcards or take an additional cram course to get you a few extra points on your final grade.

 

CPA Review Course Renewal Fees

If it takes you a bit longer to complete your CPA review course than you initially expected, you may have to pay some additional renewal fees.

 

Typically a CPA review course will charge in the range of $500 to $1,500 for renewals. However, if you want to cut these costs, you can do what I did and invest in some entirely new study material. Buying practice tests from other sources can cost you around $100 to $600, which can save you a lot of money!

 

Step 7: Find a CPA Review Course That’s Best For You

Without a doubt, the best course of action that you can take to maximize your chances of passing the CPA exam is picking a review course that will work best with your particular learning style. If the course you choose isn’t designed to play into your learning strengths,  it will result in a painful experience of pointless busywork.

 

In order to help you avoid this fate, I’ve mapped out a 7 step guide to help you pick the right CPA review course for you:

Step 1: How Do You Learn?

Think back to your experiences in college. See if you can pinpoint and write down three of your study strengths and three study weaknesses.

 

Here’s a helpful resource for determining your learning strengths that was developed by a psychology professor. Take a look at some of the different forms of intelligence listed in that article and find out if any of them apply to you.

 

Step 2: Are You A Lone Wolf or a Pack Animal?

Based on your favored study style, do you think you learn better on your own or in a group setting? On the multiple intelligence page linked above, try to determine if you are an interpersonal learner or an intrapersonal learner.

 

Step 3a: Intrapersonal Learners

If you have decided that you are more of an independent studier, you should focus on finding a CPA review course that has a solid textbook, pre-made flashcards, and/or tons of multiple choice practice tests. Video lectures may be helpful as well if you respond well to visual input.

If you fall into this category, I recommend you check out some of these study courses:

Gleim CPA Review

Wiley CPAexcel Review

Surgent CPA Review

 

Step 3b: Interpersonal Learners

If you have determined that your best learning is done in a classroom environment with other students, then you will want to focus on finding a study course that emphasizes video lectures directly linked to practice tests, live classes, virtual classes, and/or an in-depth study planner to help you maintain structure.

If this description applies to you, you may want to try some of these CPA review courses:

Roger CPA Review

Yaeger CPA Review

Wiley CPAexcel

 

Step 4: Conclude Your Research

Once you’ve pinned down your ideal learning style and researched the options that are available to you, it’s time to narrow down your top three or four choices. You may want to look for reviews from people who have taken these courses and passed their CPA exam.

 

Step 5: Try The CPA Review Courses You Have Identified

After identifying 2-3 CPA review courses that match how you learn best, sign up for a free trial for each of them. Many of the most popular courses, including many of the ones listed here, will offer some sort of trial experience to help you come to a decision. Here are some trial links that I’ve found:

Wiley CPAexcel Free Trial

Roger CPA Review Free Trial

Gleim CPA Review Free Trial

Yaeger CPA Review Free Trial

 

Step 6: Find a Discount

Once you’ve decided on the CPA review course of your dreams, look around for a discount code. Many of the popular review courses will have discount offers you can use if you’re willing to do some searching!

 

Step 7: Start Studying

All that’s left for you to do now is to purchase your CPA review course and start studying! As I previously mentioned, the best time to begin is close to your exam signup date. This is so that you can complete any review courses with a time constraint at around the same time you take the exam, so all the information is fresh in your mind. Good luck!

 

Step 8: Craft the Perfect CPA Exam Study Plan

 

If you treat the CPA exam like some regular college test, you’re going to have a bad time. This isn’t like a GE class from your first year of university and you aren’t going to get very far if your study plan is just highlighting and memorizing raw data like a robot.

 

GE tests are mostly specialized and don’t cover a broad amount of concepts. The CPA exam is not like this at all. It is unlike any other test you have done before, even your toughest college final. It is so all-encompassing that it will most likely require study tactics that are completely different from anything you’ve ever had to do in university.

 

Here are some tips and strategies I’ve found in my research that will help you study effectively and efficiently for this Mother Of All Exams:

 

Cut the Fat Out

If you’ve successfully determined how you learn best, then you should focus your study plan around those things and cut out anything else. As a personal example, I’m not very receptive to auditory teaching; I prefer visuals-based learning and study best by reading independently. If you’re like me, you may want to skip the video lectures in your study plan.

 

Obviously you should do what works for you, not just what works for me. If you like video lectures and need a group setting to learn, then maybe you should cut out something else. It’s all about maximizing the effectiveness of your studying while minimizing the amount of time.

 

This tip can easily save you 15-20 hours of study time per section. That’s 70 hours total saved out of the entire review course!

 

Don’t Make Your Own Flashcards

 

When you’re studying for the CPA exam, time is your most valuable resource. Although a common go-to study strategy is to make your own flashcards based off of the material you are studying, You don’t really have the time to do that with this exam.

 

There are certainly benefits to making your own flash cards, but in this specific situation these benefits did not outweigh the time cost. Because of that, you would probably be better off using premade flashcards to study with instead.

 

The companies that make the most popular CPA review courses are aware of the most important concepts on the exam; it’s their job to know! If you’re interested in pre-made flashcards, Wiley CPAexcel and Roger CPA have some of the best ones I’ve seen. You can try them for yourself by clicking the links below.

 

Wiley CPAexcel Flashcards

Roger CPA Flashcards

 

This strategy can save you around 1 hour per week from your study time for each section. Considering the average length of a study session is around 24 weeks, that’s an entire day of study time you can save with this one tip!

 

Don’t Take Too Much Time on Practice Questions

When tackling the multiple choice sections of the CPA exam, it’s recommended that you don’t spend more than 3-5 minutes on each question in order to make the most of the time given to finish the test. This same logic applies to practice tests as well.

 

Many CPA review courses with practice questions will also provide analytics to measure how much time you are spending on each question. If you’re struggling to hit this goal for some questions, make it your new goal to reduce that time.

 

In addition to cutting down on your study time, this tip will also prepare you to take the real CPA exam. This exam is so broad and vast that if you spend too much time on one question, you’re not going to stand a chance of completing the exam on time. In the absolute worst case scenario, skip the question and save it for the end so you can focus on answering the questions you know while you still have time.

 

This study tip can shave an average of 30 seconds off your time answering each practice question. Assuming that you answer around 1,200 practice questions during your entire CPA review, you can save around 40 hours in total. In addition to saving study time, this strategy has the additional benefit of helping you to identify any trouble areas of the exam and improve your overall exam time.

 

Breakdown of Total Time Saved

Skipping lectures:70 hours
Skipping making flashcards:24 hours
Reduced average answering time:40 hours
Total time saved:134 hours!

 

Please understand that just because these tips worked for a lot of people, it doesn’t guarantee that they will work for you. You are the person who knows the most about your effective study habits, so feel free to take inspiration from these study tips and put your own twist on them.

 

Step 9: Lock Down Your Final Review Itinerary

Without a doubt, the most important time during your CPA exam study period is the last 2 weeks before your test date.

 

This is commonly known as “Cram Weeks” or “Crunch Time.”

 

You need to have a solid plan for this 2-week period that ensures you cover everything you need to know before the big day.

 

Feeling overwhelmed? Don’t sweat it, I’ve got your back!

 

An MVP Review Itinerary

 

I want to share with you the best last-minute cram strategy I’ve seen. This plan of attack can help you pass the exam for sure!

 

I found this strategy from another CPA review resource. They called it the Final Review Study Funnel.

 

The concept behind the Final Review Study Funnel is to funnel all the information you’ve learned over the last few months of study time into a few weeks. It can help you recall information you learned towards the beginning of your study period, locate and work on your sticking points, and refresh your memory of important mnemonics and other memorization tools.

 

Phase 1: Comprehensive Review

Crunch time starts when you are 14 days out from exam day. If you’ve been studying effectively up to this point, you should have a solid grasp on all of the material you need to know for the CPA exam. The goal in Phase 1 is not to learn any new information but to begin reviewing all the information you’ve already learned. This phase is made up of four smaller steps:

 

Step 1: 14 Days Out to 13 Days Out

Take some practice exams that cover everything you’ve gone over during these first two days of your 2-week countdown. I recommend answering about 100-120 multiple choice questions for this stage. Task-based simulations and similar essay questions just aren’t an efficient use of your time at this point in your study plan.

 

A terrific resource that I recommend for this step is the Gleim Megabank.

 

Step 2: 12 Days Out to 4 Days Out

Once you’ve finished the practice exams, take a look at the analytics and try to identify any trends in your lower-scoring areas. Set aside an hour or two out of each day to focus on one of these problem areas until you feel more confident about it.

 

Step 3: 12 Days Out to 4 Days Out (Continued)

Here’s where you get into the real deep dive. Find those topics you’re having trouble with in your study material, be it flashcards, lectures, or the textbook, and use these resources to really drive the point home. The goal here is to ensure that you understand this information, not merely remember it.

 

Once you’ve ensured that you understand this difficult material, you will be more equipped to answer the questions asked of you than if you simply memorized it. A great way to reinforce this understanding is to create or find another practice test based entirely on these troublesome topics.

 

Continue this process of identifying weak points, diving into the material, and crafting practice exams until your 4th day out from the CPA exam.

 

Phase 2: Exam Simulation

By this point in your cram session you should have taken around a dozen or so multiple choice-based practice exams, with a focus on fixing your problem areas and improving your confidence.

 

Now it’s time for you to put the pressure on and simulate the real experience of taking the CPA exam at the Prometric center. You want to convince your brain that this is the real thing!

 

Here’s how to do it:

 

Step 1:

Isolate yourself in one room for the entire length of time that you will be taking the exam: around 4 hours. Turn off and put away your phone, sign off your computer, put away any other electronic devices. Follow the rules outlined by the Prometric testing center as if you were really there.

 

Quick Tip: If you’re using Gleim’s CPA review products, many of them have an Exam Simulation feature. This can be very useful for you during this stage of your study process.

 

Step 2:

Using the study materials you have access to, create a 1:1 representation of the CPA exam to the best of your ability. Organize practice tests into sections based on each section of the real exam, divided into testlets of the same length and with the same amount of questions. When you’re ready, start the timer and get to work!

 

Step 3:

Mentally acclimate yourself to this kind of test environment. The goal at this point is for you to prepare your mind to handle the demands of this exam. This process is almost as important as actually knowing the material on the exam.

 

Even if you know all the material, you won’t be able to succeed if you can’t handle the test-taking environment. Take this practice exam seriously and treat it like the real thing.

Step 4:

When calculating your score after the exam, try not to be discouraged if you don’t get a passing score. Remember, it’s nearly impossible to predict exactly what kind of results you will receive; some questions are weighted differently, while others are pretested and don’t count toward your score at all.

 

If you are comfortable in your ability to handle the pressures of the real test environment, then you’ve accomplished everything you need to at this stage of your cram session. This phase should take you right up to the day before the exam.

 

Phase 3: Relax

This is it. The calm before the storm.

 

If you’re wondering what is the best way to use this small amount of time left for you, here’s my advice:

 

You should do nothing.

 

Focus on relaxing as much as possible. Maybe watch your favorite inspirational movie and make a playlist that you can listen to on the car ride to the testing center the next day.

 

At this point, the best thing for you to do is to give your brain a chance to recover. You’re going to need it at full strength for the exam, so this is an excellent time to take a break. Have you ever tried mindful meditation? Many have found this simple practice useful when preparing for major life events and it could help you too.

 

There’s a quote that I love, from an unknown source: “You should sit in meditation for twenty minutes a day, unless you are too busy — then you should sit for an hour.”

 

Wrap Up

 

If you’ve followed your CPA review course and implemented this 14 day study plan, you should be ready to take the test once the big day arrives. Get in there and kick the CPA exam’s butt!

 

Step 10: Prepare For Post-Exam Life

 

Is it worth it to pass the cpa exam

 

At this point, you’ve finished the CPA exam. Maybe you’re still waiting for your results, or maybe you’ve already received them.

 

If You Failed…

If you received your results and found out you didn’t pass, then I’m sorry. It’s a terrible feeling for sure, but the important thing is to not be discouraged. My advice to you in this situation is to go back to Step 7 and find a new study plan. The best way to ensure that your time wasn’t wasted is to keep going until you make it. I know you can do it if you just keep trying.

https://youtu.be/0Hkn-LSh7es

NEVER GIVE UP!

 

If You Passed

Congratulations! I knew you could do it if you tried. It’s time for you to adjust to what your life is going to be like after receiving CPA certification.

 

If you plan out your CPA career correctly, you can easily make well over $1,000,000 more during your entire career than you would if you never passed the exam. One million dollars!

 

That’s a lot of money, but we’re talking long term. Right now, let’s take a look at some more realistic, immediate numbers.

 

Example Results

I found this information from an individual who catalogued their career path since passing the exam. Any revealing information about their identity has been obscured.

Upon first passing the CPA exam in 2010, This person made about $40K per year.   

 

 

Within just a few months after passing, this person was then offered an associate position at PricewaterhouseCoopers where they made $54K a year.

 

 

After spending 2 years working at PwC, This person quit and received an offer as an assistant VP in CitiGroup’s financial reporting department handling mortgages. That position pulled in $65K per year.

 

 

Over the length of 2 years, one person who shall remain nameless increased their annual salary by $25K, or roughly 60%! If that trend continues for the next 30 years, a $25K boost can easily turn into a $750K boost. That doesn’t even account for any potential raises or promotions along the way.

 

Who knows where this person would have been if they had never passed the CPA exam? From how they say it, passing was the single most significant move they made in advancing their career!

 

This isn’t to say that your experience will be the same; everyone has their own path in life. However, it’s possible that you will experience prosperity in your career similar to that of this individual now that you’ve passed the CPA exam!

 

In Conclusion

Let’s come back to the present, to the time you’re in now, looking at this guide and planning out your future CPA career. Even if you follow all the advice I’ve laid out for you here to the letter, I can’t guarantee you a passing grade.

 

However, if you do pass the CPA exam, I can guarantee that you will find a way to achieve the results you’re looking for, both in your career and in your life. If you had the strength and ability to get through the exam, you’ll go incredibly far, guaranteed!

 

Passing this exam and becoming a licensed CPA will open doors for you that you didn’t know even existed. The best part of this is that these doors aren’t all in the realm of finance and accounting.

 

I know people who passed the CPA exam and now work as school teachers, consultants, and FBI agents. Nearly every industry recognizes the drive and determination that is expected of licensed CPAs, and this trait will help you to get your foot in the door for many of them.

 

Pretty cool, right?

 

Final Piece of Advice

By this point, you’re probably pretty jazzed up about the life you can live as a certified CPA. In the meantime, however, you still need to pass!

 

How do you do that? I already told you! Just go back to Step 1 and get started. Before you do that, though, I have one more piece of advice to impart on you.

 

Be prepared to invest in your success.

 

Unfortunately, achieving success as a CPA will require a significant initial investment on your part. There are no effective or cheap shortcuts to passing the CPA exam that will prevent you from having to give up a great deal of your time and money.

 

The biggest mistake I see CPA students doing is trying to skimp on a CPA review course. I totally get it: they’re young, probably just recently graduated from college, and are struggling to make ends meet as is. Some of them may already be in debt from getting through university and are balking at the cost to continue their education into certification.

 

The good news is that if you plan it out well, you won’t have to spend nearly as much on CPA studying than you did to get through college. A good estimate for the average cost is around $1,200-$2,000 for a fully fleshed-out review course that gives you comprehensive tools to help you pass the exam.

 

You can also check around to see if you can find any discounts. It isn’t hard; you can save a lot of money if you just do a bit of research!

 

For the most part, I don’t recommend going into debt. However, if you find yourself in a situation where you need to take out a loan in order to take a review course, it’s important to look at it as an investment instead of an expense.

 

Think of it this way: Is it worth spending $2000 now to earn $25,000 later? This seems like a no-brainer to me. Investing in yourself is the best and most profitable decision anyone can make, accountant or otherwise.

 

Hopefully this guide helps you achieve success. If you have any questions or comments, please reach out to us in the comments below. I’d love to hear your own stories about how you prepare for the CPA exam. Thanks for reading, and good luck!

Enrolled Agent vs CPA: Which One is Better for You?

What's better CPA or EA?

If you are a tax professional that wants to advance your career, it can be difficult to choose from the alphabet soup of certifications available. Two popular choices are the CPA and EA, but which one is better?

 

Both are great certifications that will help you get promoted, earn a higher salary, and guide your career, but which one should you get?

 

Let’s compare each one and see which is right for you!

What is an EA?

An EA is authorized by the U.S. Department of the Treasury to represent taxpayers before the IRS for audits, collections, and appeals, according to the National Association of Enrolled Agents (NAEA).

 

EAs advise, represent, and prepare tax returns for all sorts of individuals, partnerships, corporations, estates, trusts and pretty much any entity with tax-reporting requirements.

EA’s focus on preparing taxes and many specialize in tax resolution.

 

Enrolled agents are the only taxpayer representatives who receive their unlimited right to practice from the federal government (CPAs and attorneys are licensed by the states). This means if a company or an individual needs to file in more than one state and eventually needs representation before that state in an audit or resolution case, an EA can do both.

 

People who don’t have the resources to pursue a taxation attorney often hire EAs instead for civil resolution cases. Not only do EAs rates tend to be more affordable, they can offer their tax law expertise to clients in tax proceedings, audit hearings, and appeals. EAs help ensure clients are treated appropriately by the IRS, work out payment plans on the best possible terms, and ensure the IRS follows laws that protect taxpayers.

 

In order to become an EA you must pass an IRS-administered test and complete at least 72 hours of continuing education every three years.

What is a CPA?

 

A CPA’s bread and butter is performing tax, accounting, and financial services to businesses.

 

CPAs help individuals and companies with financial planning, investments, taxes, mergers and acquisitions, and much more. CPAs also perform audits as well as examine the annual reports of public companies.

 

A CPA’s main differentiator is the ability to attest an audit, which means it affirms to the IRS that financial statements are truthful. To do that, a CPA will request bank statements and other proof, which limits the possibility of error.

 

On the average, it takes around 8-9 years to become a CPA. You need to have 150 hours of college credit before you can sit for the CPA exam. Some states also require a certain number of hours worked under the direct supervision of a CPA before taking the exam. The CPA exam has an extremely competitive pass rate and only a 18 month time span to take it.

 

CPA vs EA: Cost of Licensing

The cost of a CPA license depends on a lot of factors. Where you go to school to complete your 150 credit hour requirement will be one cost. And then you will need a CPA review course, which could add more to the total costs of becoming a CPA.

 

The cost for sitting for the exam depends entirely on the state in which you plan to be licensed. There typically is a registration fee and separate fees for each section of the exam. (Re-takes require additional fees.) On top of that will be the cost of the license itself, which averages around $150.

 

And in order to maintain CPA licensure, you will have to take ongoing continuing education (CE) courses, which can also cost a pretty penny. Some employers will pay for all your CPA Exam and continuing education materials, but you may have to foot the bill yourself.

 

To become an EA, you first must obtain a PTIN (Personal Tax Identification Number) from the IRS, which costs $50. The cost of each section of the exam is $111.94. After you’ve passed the exam, you must pay a $30 enrollment fee. That all adds up to $415.82. Enrolled agents also have to take CE courses that fulfill the 72 hour credit requirement every 3 years.

 

EA vs CPA: Salaries

 

Enrolled Agent vs CPA salary

 

CPAs generally earn more than EAs, but that could vary depending on where you fall on the career ladder. An EA with many years of experience could earn more than a CPA who is only in their first year or two in practice. However, if you are a CPA, your income will certainly outpace that of an EA.

 

The median salary for a CPA is $62,123 versus $49,000 for an EA.

 

The income potential for EAs tends to flatten out over time with peak earnings to be around $60,000. CPAs have more opportunities to earn more money. If you are a partner in a CPA firm or a CFO for a conglomerate, you could easily make six figures.

EA or CPA, Which is better?

I think the better question is, why have both? If you are a CPA, then there is no need to become an EA since the CPA is equally qualified to perform the duties of the EA. There are a few cases where it would make sense for a CPA to also become a EA, but it is usually a redundancy for an established CPA to seek EA status.

 

If you enjoy working with taxes and the challenges of keeping up with complicated regulations, then becoming an EA might be the direction to go. Both the time commitment and costs associated with this career choice are far less than those needed to become a CPA.

 

However, a CPA can provide a much broader scope of tax services and career choices than an EA. Overall market demand is greater for CPAs than EAs. But it really all boils down to what your career goals are.

 

If you like accounting work with a micro focus, becoming an EA could be a perfect fit for you. On the other hand, if you are interested in accounting practices that have nothing to do with taxes (such as auditing), then the CPA option is the obvious path.

 

Compare CPA Review Courses

Find The Best EA Prep Course

 

How to Apply for the CPA Exam Internationally

international CPA application processThe CPA application process is confusing for all, and international candidates often don’t know where to begin. How does one go about the process if you’re not even living in the United States?

Don’t worry, the application process is pretty much the same for everyone, no matter where in the world you are living. I am going to break down how the CPA exam works on an international level so your application process will be the last thing you are stressing about when studying for the test.  

I Don’t Live in the USA: Can I Take the CPA Exam?

You do not have to be a U.S. citizen to be a US Certified Public Accountant (CPA). You do need to meet the Board of Accountancy eligibility requirements in one of the 54 U.S. jurisdictions. These include the 50 states, District of Columbia, Puerto Rico, the U.S. Virgin Islands, and Guam. The 55th jurisdiction, the Commonwealth of Northern Mariana Islands, is not yet ready to accept CPA applicants.

In order to qualify for the exam at one of the international locations, you will first have to prove that you are eligible through application to a state board participating in the International CPA Examination Administration Program. In 2011, the CPA Exam opened up Prometric test centers in Bahrain, Kuwait, Japan, Lebanon, the United Arab Emirates (UAE), and Brazil. The entire CPA Exam is in English, so you must be fluent (I bet you already are if you’re reading this article).

The Application Process for the CPA Exam

international CPA applicationInternational students have an extra hurdle in the CPA exam application process, but other than that the process is the same. If you are planning on taking the CPA internationally, you must have your educational credentials evaluated.

If you didn’t go to school in the US, there needs to be an evaluation of your credits to make sure that you match the educational standard set by the National Association of State Boards of Accountancy (NASBA). This step should be completed before you start the application process, since it can take up to 6 or 8 weeks for your international education to be approved. Check here for evaluation services from NASBA.

The remainder of the application process is basically the same for both U.S. and international CPA candidates. You begin by selecting the U.S. jurisdiction to which you will apply and then you must contact the Board of Accountancy in your chosen jurisdiction to gather the proper application materials. Lastly, you will fill out the application, submit it, and then pay the fees.

Once your education has been deemed qualified, you will receive your Notice to Schedule which will let you register for your CPA exam at a Prometric center. You can see more details for this process in my application process blog post.

You should also look into which test prep you will be using. It’s very important you start that sooner than later, so checkout the best review courses!

 

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6 Things 1st Year Audit Associates Should Know

Expect the unexpected. It’s pretty hard to pinpoint a day in the life of a first year Audit Associate because no two days will ever be alike. Ever!

Every day is different with new situations with multiple different clients. I think that’s the best part of being an auditor. You can’t really say what we do is boring because we always have to be on our toes with whatever may arise.

As a first year associate, you’ll be dealing with the easier audit areas like the cash section and searching for unrecorded liabilities testing, any sections that don’t require a lot of judgment.

As you progress, you’ll be given harder sections and be trusted to work on more difficult tasks. It really all depends on your team, the client, and how big your firm is. The smaller the firm, the more likely it is that you’ll be seeing a lot more sections in your first couple of years.

Now that I’m a Senior Auditor, here are a few things that I wish I knew coming in as a first year Audit Associate:


1. It’s Overwhelming

You will be completely overwhelmed starting out. It’s a guarantee. School does not prepare you in any way to be an auditor. Thanks a lot Audit 101! But really, there’s just no way to learn about auditing from a lecture. You’ll learn almost everything on-the-go as it’s happening and put it into real world applications.

So don’t panic when nothing is clicking in the beginning. It’s normal for a first year associate to not get the big picture for several months in. Even though most things aren’t really coming together like you would hope so, take every task and everything that you’re learning in and go with the flow. It’ll all make sense eventually. If you’re looking for a place to find your first audit job, check out Acctal Jobs.


2. Ask Questions!

If you don’t understand what you’re doing, then ask for clarification. There’s no point in spinning your wheels and wasting time when you don’t understand something. This also avoids rework by your seniors if your work isn’t done correctly.

However, be sure to take some time to try to figure things out yourself using your resources (experienced associates on your team, firm research material, etc.). You shouldn’t always rely on your seniors to baby you through your work.


3. Learn, Learn, Learn

Ask those relevant questions, take notes, and take in those new learning experiences. Don’t do it just to appear like you want to learn. You must be a willing learner without being that one new hire that’s too eager. The last thing you want is to annoy your seniors with redundant and repetitive questions. Seniors are there to help you, not to answer the same questions over and over again.

Take anything that’s thrown your way and learn from it. During your first year you will be asked to do mindless work like binding or making copies. Oh yeah, makin’ copies! The copymeister! (SNL anyone?) Well, we all just have to start somewhere.

Pay attention to what you’re given and use it as a learning opportunity. Get familiar with those reports, memos, or confirmations because you’ll be dealing with them a lot more later on and you’ll be the one responsible for compiling them.

In your first year, you’ll also become all too familiar with those dreaded review comments. Often times they’ll be trivial or even on the verge of condescending but try not to take it personally. These comments are meant to teach you no matter how silly they seem!


4. Communication is Key

Something I didn’t really expect is how important of a role communication (both written and oral) played for an auditor. We’re in constant contact with our clients, coworkers, and supervisors alike.

E-mails and phone calls must ride that fine line of being aggressive, getting straight to the point but at the same time being cordial, even when your client is unapologetically uncooperative. Trust me, you’ll get lots of those clients. Keep your cool, breathe, and always stay professional.


5. Find a Mentor

Connect with a senior or manager that shares the same values and level of work ethic as you. Take those qualities you respect and even the ones you don’t to figure out what kind of leader you want to become.


6. Get Your CPA, ASAP

The first year is confusing and overwhelming and it seems logical to push the CPA exam back until you feel more comfortable in your new position. Well think again. Get that CPA license as soon as you start or even better, try to start before your job begins. Yes, you’ll be more comfortable in your position a few months in but as you move up the ranks, you’ll have more responsibility, more work, and a lot more stress to deal with.

This is coming from someone who pushed it off and ended up studying for FAR at the same time I was promoted to senior. Save yourself the all-consuming stress and just get it out of the way as soon as possible. You’ll thank me later.

Your first year will be one of the most eye opening experiences of your life but it’ll go by in a flash. Soon enough you’ll just be one of the regular staff, talking shop with some beers at happy hour (just don’t get too crazy and act a fool). Take it all one day at a time and have fun learning, young padawans!


 

What Should A 1st Year Audit Associate Know To Succeed? 

RankThings To Know
1.It Can Be Overwhelming
2.Be Sure To Ask Questions
3.Learn, Learn, Learn
4.Find A Mentor
5.Get Your CPA, ASAP

21 Things You’ll Learn Studying For the CPA

Learn From CPA ExamWhen I first started studying for the CPA exams, I had no idea what I was getting myself into. I found it really surprising how much you learn while studying for the CPA exam. Not even just what you’re learning from textbooks but what you learn about yourself at the same time.

Here are 21 things that I learned while studying for my exams that you’ll most likely find out for yourself:

  1. The exams are hard. Like all-consuming, exhausting in every imaginable way, on the verge of insanity, eye-crossing hard. These exams are a true test of your mental capacity.
  2. There is no perfect time to start studying. Just get started already!
  3. Don’t pay for all your exams at once. Just to be on the safe side, pay for a couple at a time. It’s a real possibility that you could end up postponing and run out of time to take those paid exams. You lose that money and have to pay again!  While you’re at it, save money on your CPA courses with our discounts.  Your wallet will thank you.
  4. Life will not stop just because you’re busy studying. For most people, life will actually throw you a few more curve balls than normal while you’re studying.
  5. The threat of failure is real. It doesn’t matter how good of a crammer or how great of a test-taker you were in college. We’re not in college anymore.
  6. The key is practice, practice, practice. Don’t bother rereading chapters you’ve already read, just keep doing practice questions!
  7. Live classes are worthless. Thanks for the lessons on highlighting entire pages though.
  8. Coffee is your best friend. So is a beer right after a stressful day at work. Don’t fight it.
  9. You’ll be an expert on the best coffee shops for studying. You’ll become that regular known as the “girl with the fat books” with your cappuccino already waiting for you.
  10. You’ll develop a Vitamin D deficiency. What does daylight look like again?
  11. Getting into your prometric exam room is way more thorough and annoying than getting through security at the airport. And your every move is being watched…
  12. Those bright yellow sound-blocking earphones in the exam rooms are a blessing. Those prometric keyboards have the loudest keys ever. It’s just a fact that there will be someone right next to you pounding on those old keyboards.
  13. You’ll get annoying encouragements like “you’ll be ok” or “you can do it” or “you’ll get it next time” or “just study harder”. Excuse me, but have you taken these exams? People who haven’t taken the CPA exams have no clue what you’re going through.
  14. Don’t tell anyone which day the results are posted. If they don’t know if you passed, then you probably didn’t. If you passed, everyone and their mama would know already.
  15. You’ll get really good at saying “no”. You won’t even have to make excuses, it’s just a flat out NO. Don’t bother me, I’ve got a date with my textbooks.
  16. Everyone you know will question if you’re dead or alive. When you finally decide to take a break and come out into the world, it’s like that rare Snow Leopard sighting (crikey, mate!). And not to mention, you’ll be the hardest person to get ahold of. They may as well just send a carrier pigeon.
  17. You’ll be out of the loop on all sports and every popular TV show. It’s really ok though. Life is so much better without TV. Wouldn’t you rather be out with friends or family rather than melting your brain with mindless shows?
  18. Negative people who bring you down should be cut out of your life. If they add no value or don’t see that you’re doing good things with your life, why keep them in it? The keepers will see that these sacrifices are temporary and will support your every step in the process.
  19. You’ll find this crazy inner drive that you never knew you had in you. There will be something that keeps you going during all the struggles and pushes you to your limits. For me, it was imagining the day when it was all over and I could finally have my life back. But you’ll find your own motivation.
  20. You may develop some post exam anxiety right before your last exam. The thought of getting back to a life where you don’t have to study seems unimaginable. What are you supposed to do with free time again?
  21. An occasional meltdown is inevitable. Take a minute to throw yourself a little pity party. But then get over it! You’re wasting precious study time.

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Do you have some things that you learned while studying for the CPA exams? Please, feel free to share them below in the comments!

Does it Matter if I Barely Passed the CPA Exam?

The CPA exam tests entry level knowledge required to be a Certified Public Accountant. Getting a perfect score of 99 doesn’t mean you will be a better CPA than someone who got a 75. So don’t beat yourself up if you didn’t get a higher score. The magical 75 proves that you put in the exact amount of study time needed to pass. Your exact CPA exam score has little to do with your career, but it can help you in a few ways.

The CPA exam in made up by four sections in accounting. A higher score on one section could mean that this in an area you should look into when selecting your career path. For example, if you barely studied and got a 90 in the AUD section and actually enjoyed taking that section, maybe a career as an auditor is the right path for you. However, this shouldn’t be the sole determiner for your career path. Instead, use your score breakdown as a hint to what field in accounting you would most likely thrive in.

What Are Employers Thinking?

There are a lot of opinions out there regarding whether or not to put your score on your resume. Some people say that they would hold it against you if your score was higher, while others could care less as long as you passed. To state licensing boards and future employers, passing is the only part that matters.

Imagine if you were having to hire someone from hundreds of resumes. You are not going to take note of every candidate’s score and rank them from lowest to highest in order to make your decision. This would negate all the other important factors that are necessary to be an outstanding employee. Sometimes it can even come off as arrogant if you put your high scores down among a sea of applicants who did not. Remember, all they want to know is if you passed, and here’s why.

It’s public knowledge that the CPA exam is by far one of the most difficult tests in the nation. Committing to take the exam requires hundreds of hours of study and dedication. Passing the exam means much more than the numerical value of your score; it speaks to your ability to take challenges head on and your ambitious work ethic. This is what matters to employers, not the exact score you got on the exam. A good equivalent would be to state the prestigious university you went to on your resume, but leave out your transcript and grades.

The Bottom Line

CPA candidates are hardworking people and employers are looking for these qualities along with others including who you are as a person, what you can bring to the table, and what value you can bring to the company. Employers are not going to be able to discern these important things though your scores. Your chance for an interview or hire is not solely based on passing the CPA exam but instead on a whole bunch of other considerations like your background, extracurricular activities, skills/abilities, education, and whether or not you would make a good fit with the organization’s culture. This is important to remember when stressing about your score, because it is meaningless compared to all the other elements considered to become a hired CPA.

 

CPA Requirements By State for 2017

Requirements to become a CPA are determined based on the 55 U.S. jurisdictions (all 50 states, Guam, Northern Mariana Islands, Puerto Rico, U.S. Virgin Islands, and Washington D.C.). You become eligible by meeting the specific requirements set forth by that state board of accountancy in which you applied for.  Please refer here for your State Board of Accountancy. Below is a summary of each jurisdiction’s requirements.

CPA State Requirements Overview

 

State Credits to Sit For ExamCredits For LicenseAgeCitizenshipResidencySocial SecurityExperienceEthics Exam
Alabama * 150 150 19 Yes No Yes Yes Yes
Alaska 120 (B.A.) or 18 semester hours within completing B.A. 150 19 No No Yes Yes Yes
Arizona 120 (B.A.) 150 18 No No Yes Yes Yes
Arkansas 150 150 None No No Yes Yes No
California 120 (B.A.) 150 None No No Yes Yes Yes
Colorado 120 (B.A.) 120A None No No Yes Yes Yes
Connecticut 120 (B.A.) 150 None No No Yes Yes Yes
Delaware 120 (B.A.) 150 None No No Yes Yes Yes
District of Columbia * 150 150 18 No Yes Yes Yes No
Florida 120 (B.A.) 150 None No No Yes Yes No
Georgia 120 (B.A.) 150 18 No No Yes Yes No
Guam 120 (B.A.) 150 None No No Yes Yes No
Hawaii * 120 (B.A.) or 120 days within completing B.A. 150 18 Yes No Yes Yes No
Idaho 120 (B.A.) 150 18 No Yes Yes Yes Yes
Illinois 150 150 18 No No No Yes Yes
Indiana ** 150 18 No No Yes Yes No
Iowa  120 (B.A.) or 120 days within completing B.A. 150 None No No Yes Yes Yes
Kansas * 150 150 None No Yes Yes Yes Yes
Kentucky 120 (B.A.) 150 18 No No Yes Yes No
Louisiana 150 150 None Yes Yes Yes Yes No
Maine  120 (B.A.) or 120 days within completing B.A. 150 None No No Yes Yes No
Maryland 120 (B.A.) 150 18 No No Yes Yes Yes
Massachusetts 120 (B.A.) 150 18 No No Yes Yes No
Michigan 120 (B.A.) 150 None No No Yes Yes No
Minnesota  120 (B.A.) or 120 days within completing B.A. 150 None No No Yes Yes Yes
Mississippi 150 150 None No Yes Yes Yes No
Missouri Within 60 days of completing education requirements 150 21 No Yes Yes Yes Yes
Montana * 120 (B.A.) 150 None No No No Yes Yes
Nebraska * 150 150 None No Yes Yes Yes Yes
Nevada 150 150 None No Yes Yes Yes Yes
New Hampshire 120 (B.A.) 120B None No No Yes Yes No
New Jersey 120 (B.A.) 150 18 No No Yes Yes Yes
New Mexico 120 (B.A.) 150 None No No Yes Yes Yes
New York 120 (B.A.) 150 21 No No Yes Yes No
North Carolina 120 (B.A.) 150 18 Yes No Yes Yes Yes
North Dakota Within 6 months of completing education requirements 150 None No No Yes Yes Yes
Northern Mariana          Islands 150 150 None No No No Yes No
Ohio 150 150 18 No Yes Yes Yes Yes
Oklahoma * 150 150 None No Yes Yes Yes Yes
Oregon 150 150 None No No Yes Yes Yes
Pennsylvania 120 (B.A.) 150 18 No Yes Yes Yes No
Puerto Rico None 150 21 No Yes Yes No No
Rhode Island 120 (B.A.) 150 None No Yes Yes Yes Yes
South Carolina 120 (B.A.) 150 18 No No Yes Yes Yes
South Dakota Within 100 days of completing education requirements 150 None No No No Yes Yes
Tennessee Within 200 days of completing education requirements 150 None No No Yes Yes Yes
Texas 150 150 None No No Yes Yes Yes
U.S. Virgin Islands None High School Diploma or College DegreeC None No Yes Yes Yes No
Utah 150 150 None No No Yes Yes Yes
Vermont 120 (B.A.) or within 60 days of completing B.A. 120D None No No Yes Yes
Virginia 120 (B.A.) 150 None No No Yes Yes Yes
Washington Within 180 days of completing education requirements 150 None No No Yes Yes Yes
West Virginia 120 (B.A.) 150 18 No Yes Yes Yes No
Wisconsin Within 60 days of completing education requirements 150 18 No No No Yes Yes
Wyoming 150 150 18 No Yes Yes Yes Yes

Notes:

* Two-tiered states. CPA certificate is issued when candidate passes exams. License/permit to practice will be issued when experience requirement is complete.

** 24 semester hours or equivalent quarter hours in undergraduate accounting or 15 semester hours or equivalent quarter hours in graduate level accounting or a equivalent combination of both.

A: Before July 1, 2015: 120 hours with B.A. After July 1, 2015: 150 hours with B.A.

B: Before June 30, 2014: 120 hours with B.A. After June 30, 2014: 150 hours with B.A.

C: Diploma from a 4-year high school or Degree from recognized college or university or Degree from recognized college or university and complete 30 or more semester hours of study in accounting, business law, economics and finance of which 20 semester hours are in accounting.

D: Before July 1, 2014: 120 hours with B.A. After July 1, 2014: 150 hours with B.A.

 

CPA Exam Stats and Facts

We’re accountants! We need our reliable documentation to support our conclusions. Here are some important facts and statistics relevant for CPA exam candidates. 


CPA Exam Testing Windows

Every third month of the quarter is a blackout month when exams cannot be taken. 

QuarterTesting WindowsBlackout Month
1JanuaryFebruaryMarch
2AprilMayJune
3JulyAugustSeptember
4OctoberNovemberDecember

Target Score Release Dates

Day in Testing WindowTarget Release Timeline
Day 1 – 2011 business days following day 20 of the testing window
Day 21 – 456 business days following day of the testing window
Day 46 – Close of window6 business days following the close of the testing window
After close of window6 business days after receiving all scoring data for the testing window

2016 Pass Rates by Section

Passing rate percentages can be taken in a few ways so take the following statistics with a grain of salt. Worried about passing? It’s possible! You failed? You’re not alone! Either way, the exams are hard but you can beat them!

Exam Section% Pass
AUD46.37%
BEC56.55%
FAR46.38%
REG49.41%

Number of CPA Exam Candidates

Number of CPA Exam Candidates


Pass Rates by CPA Exam Section

CPA Exam Pass Rates


Salary Range of Accountants and CPAs

Below are salary ranges derived from the 2013 Robert Half Salary Guide by experience level that can be reached for both public and corporate accounting. Accountants with CPAs tend to make 10 – 15% more than accountants without a certification. CPA salaries on each chart reflect a 15% increase over non-CPAs.

cpa salary ranges


Demand for Accountants

We’re always in demand! Accountants are needed anywhere and everywhere even in a weakened economy. An accountant with a CPA is more distinguished than another candidate with the same qualifications without a CPA. On top of the demand for an accountant, an accountant with a CPA is just that much more sought after.

Per the Bureau of Labor Statistics, the accounting profession is expected to grow 11% from 2014 to 2024. Employment for accountants and auditors in 2014 was 1,332,700 while projected employment in 2024 is expected to increase to 1,475,100.

Accountants and auditors have been ranked #5 as the best jobs of the future according to Business Insider. This takes into consideration both salaries and projected growth in the coming years.

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