The CPA Exam: What You Should Know

Certified public accountants (CPAs) are experienced accounting and auditing professionals who specialize in public accounting. But to become a CPA, you'll need to pass the CPA exam. And the test changed dramatically in 2024.

In most states, you'll need 150 credits of postsecondary education plus accounting experience to become a fully licensed CPA. The CPA exam, administered by the Association of International Certified Professional Accountants (AICPA), is a rigorous test with low pass rates.

Before 2024, all CPA candidates took the same four-section exam. But now, test-takers get to choose one of their sections to specialize their exam. The Journal of Accountancy notes that having an examinee pick the fourth section allows them to better align the test with their own interests in the accounting field.

Known as CPA Evolution, the new test offers greater flexibility. And the new format also means that prospective CPAs need to adapt their study strategies.

What Does the CPA Exam Cover?

You'll pass four sections of the CPA exam to become a CPA. In the past, all CPAs had to take the same four sections. The 2024 update gives test-takers more options. While everyone takes the three core sections, you can choose one of the three Discipline sections.

The core CPA sections that all test-takers complete include:

• Auditing and Attestation (AUD): The AUD section covers general principles, risk assessment, internal controls, and ethics.
• Financial Accounting and Reporting (FAR): The FAR section covers financial reporting, balance sheet accounts, and select transactions for for-profit and nonprofit organizations.
• Taxation and Regulation (REG): The REG section tests federal tax procedures, business law, property taxation, and individual taxation.

Test-takers also choose one of three discipline sections:

• Business Analysis and Reporting (BAR): The BAR section tests analytical, forecasting, and technical accounting skills, including reporting requirements.
• Information Systems and Control (ISC): The ISC section evaluates information systems and data management skills, including confidentiality and privacy requirements.
• Tax Compliance and Planning (TCP): The TCP section evaluates financial planning, entity tax compliance, and entity tax planning knowledge.

Each section includes multiple choice questions (MCQ) and task-based simulations (TBS). Framed as case studies, the TBSs provide financial records, correspondence, and other documentation that test-takers use to answer questions. You'll have four hours to complete each section of the exam.

Scoring the Exam

You'll receive a score between 0 and 99 on each section of the CPA exam. Only scores of 75 or higher pass the section.

Unlike some other standardized tests, the CPA exam score is not a percentage of your correct answers, and scores are not curved. Instead, the score factors in the difficulty of questions and the question type.

The total score combines your scores on the MCQ and TBS, with a 50-50 weighing on every section except the ISC, with a 60% MCQ and 40% TBS weight.

While the AICPA has not yet released scoring information for the newly formulated 2024 version of the exam, on past core sections test-takers received the highest scores on the REG section and the lowest scores on the FAR section. For example, in 2023 the pass rates for Q1 to Q3 were:

• FAR: 42.94%
• AUD: 46.92%
• REG: 59.19%

You'll receive your score within 1-3 months after taking the CPA exam on the AICPA score release day. If you fail a section of the exam, the AICPA provides a candidate performance report with a detailed assessment of your performance.

How Do You Register for the CPA Exam?

The process of registering for the CPA exam depends on your state. First, you'll need to meet your state's exam requirements. Depending on your state, these can include minimum education, age, and citizenship or residency requirements.

Next, you'll provide documentation to your state, after which you can apply to take the exam in the state where you're pursuing licensure. In California, for example, you'll apply through the California Board of Accountancy and pay a $100 fee as a first-time applicant or a $50 fee for repeat applicants. You'll also pay fees for your CPA exam sections.

After your state's board accepts your CPA exam application, you'll receive a notice to schedule (NTS). That means you can schedule your exam through Prometric, the test proctor.

CPAs interviewed by the AICPA recommend booking your seat right after getting your NTS, because you won't want to miss out on your most convenient days. Also, without a specific date to work toward, you may procrastinate to prepare and not feel 100% ready.

When and Where Can You Take the Test?

You can take the CPA exam sections in any order. Most test-takers focus on one section at a time, but you can schedule multiple sections back to back or even on the same day. However, you can take the test only during the AICPA testing windows.

While you can take the core CPA sections most of the year, the discipline sections are only offered for about one month every quarter.

You'll take the CPA exam sections at a Prometric test center. Prometric has 8,000 authorized test centers around the world. On the day of your exam, you'll need identification, such as a driver's license, passport, or state identification card. You'll also need your NTS and your exam section ID number.

If you don't pass a section of the exam, you'll need to retake it during a different testing window. You'll need to pass all four sections within 18-30 months, depending on your state.

Paying for the Exam

The cost of the CPA exam varies depending on your state, whether you retake any sections, and how quickly you complete the sections. According to the Miami Herald, the total cost ranges from around $1,570 to $7,880 when factoring in fees and review courses. You'll pay around $345 per section of the test each time you take a section.

You can potentially save on costs by completing the four sections faster. For example, you'll save on application fees. Many CPAs report that a fast-paced schedule worked for them.

How Can You Prepare for the CPA Exam?

Preparing for the CPA exam requires significant study time. Becker, an accounting educational resource, recommends 80-100 hours of studying for each section except for the BAR section, with a recommended 100-120 hours.

Add it up and you can expect up to 420 hours of studying, or more than 17 straight days. Here are the top study tips for the CPA exam.

Practice Exams and Study Resources

Frequently Asked Questions About CPAs

What does "CPA" mean?

"CPA" stands for "certified public accountant." CPAs are experienced accountants who specialize in public accounting, taxation, and auditing. They meet experience, educational, and examination requirements to earn licensure as a CPA.

What is the CPA exam?

The CPA exam tests accountants on their knowledge of advanced public accounting and financial reporting procedures. CPAs must pass four sections of the CPA exam to qualify for state licensure.

Is an accounting degree worth it without a CPA?

Yes, earning an accounting degree can pay off even if you don't become a CPA. Many accountants specialize in areas outside of public accounting. You can pursue professional certification as a certified fraud examiner (CFE) or certified internal auditor (CIA), for example.

Do CPAs make more money than accountants?

Yes, CPAs report a higher salary than other accountants, according to research from Becker. CPAs report an average salary range between $60,870 and $150,610, while non-CPA staff accountants report a salary range between $47,140 and $82,170.

Page last reviewed May 6, 2024.