Tag: Studying for the CPA exam

All About the BEC Section of the CPA Exam

Editor’s note: This is the third in our five-part series this week on the CPA exam. We’ve already done Audit and Regulation and will finish with FAR tomorrow and an ethics discussion Friday. As always, if you have CPA exam questions for us, get in touch and we’d love to help.

Let’s get into BEC, shall we?

Good news: It’s the smallest section, has no simulations, and requires the least amount of study time. All of these seem like bonuses and many candidates take BEC first because of it but remember that your 18 month window starts from when you sit for and pass the first part so you might want to start with the most difficult, not the easiest.

Bad news: Just because it’s short doesn’t mean it is easy. BEC is the junk drawer of the CPA exam meaning a lot of information that wouldn’t fit elsewhere is stuffed into this section. The other downside to BEC is that many candidates do not take it seriously enough because it is so small; that means it is imperative to give the section the same focus and dedication that you would any other section.


BEC is a 2.5 hour exam (likely 3 hours after the CBT-e changes planned for 2011) and consists of 3 MCQ testlets of 30 questions each. You should allow yourself 1.5 minutes per question (45 minutes per testlet).

The AICPA BoE has set the following target weights for skills testing:

Communication (0% – 13%)
Research (0% – 13%)
Analysis (8% – 18%)
Judgment (6% – 16%)
Understanding (55% – 65%)

Based on the Content Specification Outlines, Business Environment & Concepts covers the following areas:

Business structures (17% – 23%) This means partnerships and expect to see quite a bit on this.

Economic concepts (8% – 12%) Business cycles, economics (inflation, deflation, interest rate changes), market influences, supply chain, foreign currencies and hedging.

Financial management (17% – 23%) Financial modeling, short and long term financing, loans, cash management.

Information technology (22% – 28%) Role of business IT systems, responsibilities within the IT function, IT fundamentals (hardware/software, networks, systems operation, etc).

Planning and measurement (22% – 28%) Planning and budgeting, organizational performance measures, cost measurement (don’t forget: cost accounting is AWFUL but pretty heavily tested so get on it!)

All About the Regulation Section of the CPA Exam

Editor’s note: this is the second in our 5-part series this week on the CPA exam. You can find Monday’s Auditing and Attestation breakdown here and stay tuned for the other two parts as well as an ethics wrap-up later in the week. As always, if you have a CPA exam question for us, get in touch.

So, let’s talk Regulation!

Good news: Like Audit, REG tends to have a slightly higher national pass rate than other sections (specifically BEC and FAR) and though business structures can drag, the tax stuff is fairly cut-and-dry. You won’t have to remember tax numbers as most of this information is provided so don’t obsess too much over specific numbers for the year, just stick to the concepts!

Bad news: Business structures can drag and the tax stuff is cut-and-dry. This means Regulation can be one of the most difficult sections to motivate yourself to study unless you are really, really into taxes.


Regulation is a 3 hour exam and is the only section to consist of three testlets of 24 multiple choice questions each (as opposed to other sections which contain 30 MCQ in each testlet). Because it is a shorter exam compared to other sections, that means that you have about 1.25 minutes to complete each question (30 minutes per testlet, leaving you 45 minutes for each simulation).

The AICPA BoE has set the following target weights for skills testing:

Communication (0% – 14%)
Research (9% – 19%)
Analysis (13% – 23%)
Judgment (8% – 18%)
Understanding (45% – 55%)

Based on the Content Specification Outlines, Regulation covers the following areas:

Ethics and professional responsibility (15% – 20%) Professional conduct, independence, confidentiality, due care… you know, all the good stuff that makes you a CPA. Keep in mind this area will no longer be covered in REG after 2011.

Business law (20% – 25%) Formations and terminations of businesses, authority of agents and principals, debtor-creditor relationships, government regulation (federal securities acts – heavy tested!!), negotiable instruments, insurance.

Federal tax procedures and accounting issues (8% – 12%) Just as it sounds, this area covers federal tax procedures as well as cash, accrual, percentage of completion, contract and installment sales.

Federal taxation of property transactions (8% – 12%) Assets, depreciation and amortization, exchanges, and capital gains.

Federal taxation – individuals (12% – 18%) Gross income, pass-through entities, exemptions, AMT, retirement, estate and gift taxes.

Federal taxation – entities (22% – 22%) S-Corps, partnerships, LLCs, LLPs, and trusts.

Studying for REG should take between 80 and 100 hours depending on how familiar you are with the concepts before you begin studying and your professional experience with the material. Obviously if you work in tax you’ve got a leg up and can spend a little less time reviewing taxation.

Good luck and join us tomorrow as we review BEC!

Here’s What to Expect on the FAR Section of the CPA Exam

Friendly reminder (especially now that tax season is over), if you have a CPA exam question for us, shoot us a note, tweet us, or find us on Facebook and pester us until we answer. Up to you but we know you have questions so stop being shy.

Anyway. We have question from Twitter this week from @jacmelirose:

“What are the most heavily tested subjects for FAR? Help? Taking FAR in a month day for day.”

Alright, let’s start with the obvious: asking “what are the most heavily tested subjects” usually means you haven’t studied up until this point and are looking for a shortcut. Understandable but keep in mind this goes against the CPA exam guru’s advice. Just sayin’.


A good place to start is with the Content Specification Outlines for the section you are studying. For FAR, you can expect to see the following:

Financial statements (17% – 23%) – that means profit and loss, balance sheet, cashflows and footnotes/disclosures.

Typical items in financial statements (27% – 33%) – you’re talking marketable securities (pretty heavily tested or so we hear), receivables, bonds, leases, inventory, PP&E (depreciation, mostly), liabilities and revenue recognition. As much as you hate bonds, expect to see plenty on the subject so get cracking.

Transactional items (27% – 33%) – business combinations (yup, consolidations), contingent liabilities, discontinued operations, earnings per share and extraordinary items.

Government accounting (8% – 12%) – Everyone’s favorite! It’s not heavily tested but you will need to know a little about fund accounting, budgets, and government financial statements.

Not-for-profit accounting (8% – 12%) – Again, not heavily tested but it does show up (several MCQ and maybe a sim) so you will want to be sure to understand how NFP accounting works by understanding the 4 statements: financing, activities, cash flows and functional expenses.

Because we all know it’s against the rules to discuss what actually appears on the exam, we won’t tell you to expect BONDS, LEASES, and PENSIONS (and LOTS of them). We also will not tell you to be on the lookout for inventory in simulations because, again, that would assume we’re telling you we know what’s actually on the exam and of course we don’t.

FAR takes about 132 hours to prepare for – if you’ve got a month to do it, you need to be extra diligent about creating a study plan. Block out no less than 3 hours per day for MCQ/sim practice or lecture videos. Generally your brain tunes out if you’re studying any more than that per day but if you do the math, you realize you need more like 4 hours per day to meet the 132 hour requirement. In other words: a month is not really enough time to study for FAR. Here’s hoping you’ve been studying all along and are just looking for some last minute advice. Good luck!

Three Ways to Get Back into Study Mode for the CPA Exam

Masochism at its finest means just thinking about the CPA exam while fully head down, eyes closed and trudging towards the busy season finish line. It’s cool, CPAs are a masochistic bunch and if you’re going to subject yourself to the torture of studying for the CPA exam while tackling your least favorite part of the year, have at it but please be smart about it.

It’s almost April and you know what that means – a brand new testing window filled with fun and exciting >75 action. Hopefully 75s, if you little masochists plan right.


Here are a few tips, you can do whatever you want with them. Ideally, you can ignore them for the next few weeks until you shift from busy season mode back to exam mode.

• Don’t be unrealistic about your work load – Some of you complain about “busy season” and know damn well you haven’t pushed a difficult piece of paper in months while others haven’t seen the light of Facebook (nor the end of the tunnel) in weeks. Take a reasonable assessment of the free time you have to commit to the exam and plan accordingly. If you’re grinding all the way through April 15th, maybe a late April test date is a tad optimistic and not all that smart.

• If you aren’t ready, blow it off – This goes against everything I always recommend to CPA exam candidates but it’s a wise piece of advice this time of year. If you are not ready for an exam, try to reschedule. Maybe taking FAR on April 1st made a lot of sense when you scheduled it in October but now that April is almost here and you haven’t seen daylight in two months, it’s not looking like such a bright idea. Of course, if you’re in a situation where you are about to lose credit for exams previously passed but still not prepared, there’s no harm in going to the exam anyway as you’re basically forfeiting the exam fee and might as well find out what’s on the test for next time.

• Don’t permanent vacation yourself just because you’re tired – Shifting from busy season to exam mode, it is really easy to rationalize an extended vacation from studying just because you need a break. The rest is deserved but don’t let a few days of relaxation turn into several months of procrastination. It’s easier than you think and I’ve seen it enough times to know it happens all the time. Don’t be lazy, this is what you wanted.

Four Ways to Force Yourself to Study for the CPA Exam

I’ll save you the hoo-rah, I’m pretty sure you don’t need it. It’s March already; if you aren’t studying, you’re working, and if you’re doing both right now I worry about your decision-making capabilities. Oh well.

Masochistic or not, it isn’t always easy to get yourself motivated to study.

You have entire CPA exam strategies laid out on the CPAnet forums here, here, and look, you even have a hoo-rah. Not everyone is an Elijah Watt-Sells so get that out of your head and worry about what works for you.


That strategy – finding a perfect fit for your own needs as a CPA exam candidate – also goes for motivation.

So how do you force yourself to study? Here are a few ideas:

Bribe yourself – Sock away $xxx for a new toy and reward a passing score with whatever your bribe is. If you’re cheap/laid off/sinking $1000s into failed exam fees and broke, it could be a decent dinner or a movie. Define splurge for yourself and make that the carrot you dangle in front of your face to get you to study.

Commiserate – You can find plenty of miserable accountants taking (and not always succeeding at) the CPA exam. You can also find support and encouragement if you’re actually trying to pass, so use resources like CPAnet and Twitter to find other candidates to speak to. If you’re taking a live review, sign up with someone else from your firm and go to class together. It helps to have someone else keeping you in check.

Visualize your goal – This might be the most, um, cheesy of methods but it absolutely works. Write CPA after your name on business cards and put them up where you will see them frequently (but don’t hand them out, that’d be illegal); though this tactic isn’t meant as a substitute for actually preparing (sorry to break it to you), a little positive thinking takes the anxious edge off.

Plan – Sometimes knowing there is a clearly defined schedule takes some of the panic out of the CPA exam, and if you’re disciplined enough, you won’t need motivation. Sure, it’s robotic, but that’s what studying for the CPA exam is. The exam doesn’t ask you to think critically outside of the parameters of financial reporting and accounting, nor do you get bonus points for creativity. So maybe you just need to have a plan, stick to it, suck it up, and move on until you’re done. It’s the most miserable of the options but sometimes all that works.

So? What worked for you?