Definition
The term “CPA Exam Sections” refers to the four distinct parts of the Certified Public Accountant examination, which is a prerequisite to becoming a certified accountant in the United States. These sections are Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). Each section tests different aspects of public accountancy, including comprehension of principles, practices, and professional standards.
Key Takeaways
- The CPA Exam Sections are made up of four parts: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).
- Each section of the CPA exam has a different focus and tests different skills, knowledge, and capacities related to public accounting.
- Passing all four sections of the CPA exam within an 18-month period is a major requirement to become a Certified Public Accountant in the United States.
Importance
The CPA Exam Sections are crucial in the field of finance because they serve as a comprehensive measure of a candidate’s knowledge and competency in various areas of accounting.
The exam is divided into four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). Each section tests specific skills and knowledge sets, enabling a thorough evaluation of a candidate’s abilities.
The successful completion of all sections is a pre-requisite to earning a Certified Public Accountant (CPA) credential, which is one of the most recognized and respected credentials in the financial sector.
Thus, the CPA Exam Sections are of vital importance as they form the very foundation for achieving advanced professional standing in finance and accountancy.
Explanation
The CPA (Certified Public Accountant) Exam Sections are a critical part of the steps to becoming a CPA. They are designed to evaluate the knowledge and skills of a candidate in various areas of accounting.
The primary purpose of these sections is to ascertain whether a candidate has the requisite competence to function as a certified public accountant. The exam is regulated by the American Institute of Certified Public Accountants (AICPA) and it’s considered one of the toughest professional qualification exams.
The CPA Exam is structured into four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). Each section tests the proficiency level of candidates in specific aspects of accounting. For example, the AUD section focuses on the preparation and evaluation of audit reports, while the REG section evaluates understanding of professional responsibilities, ethics, and business law.
The BEC section tests business concepts, management, and IT, and FAR tests depth of knowledge in financial accounting and reporting. It’s important to note that success in these sections is crucial, as a candidate needs to pass all four within an 18 month period to qualify for the CPA designation.
Examples of CPA Exam Sections
The CPA (Certified Public Accountant) Exam is a uniform examination that individuals must pass in order to qualify as CPAs in the United States. It is divided into four major sections. Following are three real-world examples for each section:
Auditing and Attestation (AUD): This section involves professional standards and procedures for performing auditing tasks. A real-world example would be in a company’s financial department, where someone in an auditing role, such as an internal or external auditor, could use the skills and knowledge they gained from this section of the CPA Exam to effectively execute an audit or review of a company’s financial documents.
Business Environment and Concepts (BEC): This part covers general business concepts and international business, corporate governance, information systems, and strategic planning. An example would be a CPA serving as a financial advisor for a company, using their understanding of these topics to assess the business environment and make strategic financial decisions that align with the company’s goals.
Financial Accounting and Reporting (FAR): This section covers areas like accounts receivable, inventories, debt securities, revenue recognition, etc. A real-life scenario could be someone working as an Accountant for a company, applying these principles to prepare and analyze the company’s financial reports.
Regulation (REG): This aspect discusses business law and federal taxation process, ethics and professional responsibilities related to tax procedures. An example might be a CPA working in the role of a Tax Consultant at a tax preparation or consulting firm, giving advice to clients based on their keen understanding of tax codes, or filing taxes on the client’s behalf.
FAQs about CPA Exam Sections
1. How many sections are there in the CPA Exam?
There are four sections in the CPA Exam: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).
2. How long is each CPA Exam section?
Each section of the CPA Exam lasts four hours, which makes the total length of the exam 16 hours.
3. Can I take all four CPA Exam sections at once?
No, you cannot take all four sections at once. You have to schedule each section individually. You have 18 months to pass all four sections once you pass the first one.
4. What is the pass rate for each CPA Exam section?
The pass rate varies for each section and year. Generally, the pass rates are: AUD 45-55%, BEC 55-65%, FAR 45-55%, and REG 50-60%.
5. Is there a specific order to take the CPA Exam sections?
No, there is no specific order in which to take the sections of the CPA Exam. You can take them in any order you prefer. However, some candidates prefer to start with the section they feel most confident about.
6. What topics are covered in each CPA Exam section?
The AUD section covers auditing procedure, auditing standards, and other related topics. BEC covers business concepts and environment. FAR covers financial accounting and reporting frameworks from several industry-related topics. The REG section covers federal taxation, business law, and business ethics.
Related Entrepreneurship Terms
- AUD (Auditing and Attestation)
- BEC (Business Environment and Concepts)
- FAR (Financial Accounting and Reporting)
- REG (Regulation)
- Ethics (Professional Responsibilities, Ethics, and General Principles)
Sources for More Information
- American Institute of CPAs (AICPA) – This is the official organization that manages the CPA examinations.
- Becker Professional Education – Becker provides CPA exam review courses and has important information regarding the exam sections.
- National Association of State Boards of Accountancy (NASBA) – NASBA coordinates with AICPA and helps provide examination sections information at the state level.
- Roger CPA Review – Roger CPA Review provides information and review courses for each section of the CPA exam.
