Certified Public Accountants (CPA) are sought after in the finance industry, but fewer than 50% of US accountants can actually call themselves CPA. It isn’t because accountants aren’t interested in becoming certified; quite the opposite. The biggest hurdle is the test.
It’s estimated that the pass rate for the 2021 CPA exam was as low as 47% or as high as 62%, but why is that? To pass your CPA exam, you have to be proficient and knowledgeable of accounting materials. To top it off, students only have 18-months to pass all four sections.
You’ll need a quality CPA course, a consistent study schedule, and a clear head to tackle the exam for the first time. Here are some tips, tricks, and advice you should use to pass the test.
The CPA Exam: Your Complete Guide
The uniform CPA exam is a credentialing exam for professionals who want to become Certified Public Accountants. It was developed by the American Institute of Certified Public Accountants.
What are the CPA Exam Requirements?
The CPA exam requirements don’t change significantly from state to state. Each of the 55 license-grading jurisdictions (including Guam, the Mariana Islands, Puerto Rico, Washington, DC, and the Virgin Islands) may alter when you can take the exam based on age or education.
All jurisdictions require test takers to have a bachelor’s degree and a minimum of 150 credit hours, 30 credit hours more than a bachelor’s. For this reason, most test-takers will get a master’s, but it isn’t required. Some states allow you to take the test with only 120 credit hours.
Still, you’ll only get a CPA certification once you hit 150 credit hours, even if you pass the test. All states require that you work with a broker for a minimum of a year before becoming licensed.
Some states have accounting-specific course requirements. For example, Illinois requires 30 hours in subjects like financial accounting, auditing, taxes, and managerial to take the test.
Age, Residency, and Ethics Requirements
The minimum age requirements range from no requirements to 18 or 21 (for Missouri and New York). You must be a permanent resident for at least 6 months in most states to take the exam. If you have a permanent residence or business, you’ll qualify as a residence.
Several states require a completed ethics test that covers topics from the AICPA Code of Professional Conduct. These tests are open books. Some states, like Virginia, also require a state-specific ethics course. Other states, like Georgia, don’t include an ethics exam.
What Should I Expect From the CPA Exam?
The CPA exam has four sections. These four sections include Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). Candidates have 4 hours to complete each section within 18-months.
Recently, candidates have been able to sit in for their exams whenever they please. If you fail a section, you can try again immediately. Passing the exam is the only requirement for licensure.
In total, the exam features 276 multiple-choice (MC), 28 task-based (TB), and 3 written communication (WC) questions. Except for the BEC portion, MC and TB questions are each worth 50% of the exam. In BEC, 35% is TB, while WC is 15%, totaling to 50%.
Candidates need to score 75% or more in each section to pass. If a candidate fails, they can retake the exam up to 3 times. After the 3rd fail, you can no longer take the exam.
Key Features You’ll Need in a Prep Course to Pass Your CPA Exam
The best tip we can offer to pass your CPA exam is to enroll in CPA courses. A prep course is designed to prepare you for the exam, but they aren’t all alike. Look out for these key features.
1) Online Accessibility
The majority of your study materials should be available via an online dashboard. Your course should be accessible with an Android or iOS app, offer offline mode, and feature practice questions in small, 15-30 minute sections. This makes it easier for you to find time to study.
2) Free Demo
A prep course may work for millions of students, but if it doesn’t cater to your learning style, you’ll have a hard time passing the exam. Your CPA prep course should offer a 14 to 30-day free demo that includes all its available features, so you can make an informed choice.
3) Useful Study Materials
Great CPA courses will be taught using textbooks, video lectures, question banks, flashcards, and practice tests. It should simulate what the actual CPA exam will be like. Incredible courses will even offer a study timeline and create tests based on your strengths and weaknesses.
4) Decent Price
CPA exam courses are going to be expensive, ranging from $1,999 to $3,499 or more for the full 4-part course package. While cost matters, you should also focus on what the course offers you for the price. Most CPA courses separate their offerings based on packages, which vary in price.
Unless you’ve already passed a section of the CPA exam, you should find a course that offers all four exam sections. Each section should include questions that are just as difficult as the exam itself. This course should challenge you and be as comprehensive as possible.
6) Large Question Pool
All of the best CPA prep courses, like Becker, Surgent, and Wiley, should include thousands of practice questions, several hours of video lectures, and pre-made flashcards. Some courses will even include tutoring sessions, live online classrooms, coaches, and final course reviews.
7) Support Availability
Taking the CPA exam is tough, meaning constant support from teachers is necessary. While the level of support is often determined by the package you buy, all courses should at least provide a message board, FAQ, phone calls, fast email response, and a 24/7 customer service team.
8) High Exam Pass Rate
Your CPA prep course should boast a pass rate of 85% or more. Becker, UWorld Roger, and Gleim all have a 90% or above pass rate (with Becker taking the top spot for 94%). Other stand-out courses, like Surgent CPA and Ninja, have 88% and 85% pass rates, respectively.
What Else You’ll Need to Pass Your CPA Exam
A quality CPA prep course can really help you pass your exam, but it isn’t the end all be all. You’ll need to develop great study habits and build your support system to ace the test.
Create a Study Guide
Creating a study plan can help you see the extent of the exam content and become familiar with it. Study guides can help you feel comfortable in an exam environment and pick your test day.
Here’s what you need to create the ultimate CPA study plan:
Determine How Fast you Want to Pass: As soon as you take the first exam section, the 18-month time window starts to tick down. Don’t make the mistake of taking the test when you aren’t ready, as you’ll have less time to prepare or retake sections.
Budget Your Time: If you’re a new fiance graduate, I recommend booking your test right away, as the material is fresh in your mind. If you’ve been out of school for a while, take some time to remember certain topics. Expect to budget 10-12 weeks per section.
Use an Interactive Study Planner: An interactive study planner allows you to enter your study timeline based on your exam date. If you’ve fallen behind, the course or calendar you’re using will ping you and adjust your schedule so you stay on track.
Evaluate Your Current Schedule: How much time can you spend each week studying? Write down what types of activities contribute to your time. Including sleeping, work, eating, and exercising. Then, examine gaps (or create them) and slot in study time.
Flexible vs. Structured Studying: A structured study guide is the best option for most people, but you shouldn’t give up family outings just to study. Put some flexibility in your schedule. As long as you study 1-2 hours each day, you have a good chance of passing.
Joining a CPA study group, finding a CPA mentor, and utilizing study materials like practice tests and flashcards, can prepare you for the exam. Always remember to revisit sections before moving on because it can keep the material fresh in your head as you keep learning.
Take Care of Yourself
Even if you don’t suffer from test anxiety, the CPA exam can take its toll. While it’s tempting to skip the gym, eat junk food, or burn the midnight oil, your brain needs proper nutrition and rest to be healthy. That’s why you need to eat proper meals, work out, and have a study cutoff time.
You also can’t forget to spend time with your loved ones. We understand that you want to study, study, study, but over-studying can make it harder for you to retain information. Never sacrifice your physical, mental, and social health for any test or assignment. It really isn’t worth it.