Accounting is one of the highest-paying bachelor’s degrees, but to truly tap into your full earning potential, you’re going to want more than just an education. Attaining the professional designation of certified public accountant (CPA) can significantly increase your earning power. In fact, CPAs earn an average wage of $70,000 annually, according to the Journal of Accountancy, and the average salary of senior CPAs with 20 years of experience is $150,000 per year. Passing the CPA Exam isn’t easy and requires a great deal of study and preparation. In fact, you could say that the CPA Exam is to accountants what the Bar Exam is to lawyers.
IMAGE SOURCE: Pixabay, public domain
Before the Exams
There are a couple of big differences between the CPA Exam and the Bar Exam. For one thing, you can be an accountant without being a CPA, but you can’t be a licensed attorney until you pass the Bar Exam. In fact, most states in the U.S. require candidates to have a minimum of two years of professional work experience before they are qualified to sit for the exam, according to the American Institute of CPAs. This requirement means that you couldn’t possibly get certified as a CPA before you start working in the field.
Overall, though, the Bar Exam has a much higher barrier to entry than the CPA Exam does. As formal educational requirements go, aspiring CPAs technically need only a bachelor’s degree to sit for the exam, but they must have completed a total of 150 credit hours of college study – an additional 30 credit hours beyond what’s typically required for a bachelor’s degree. All in all, you should expect to spend five years in school if you want to be a CPA. Attorneys need at least seven years of college studies to first earn a bachelor’s degree and then go to law school to complete their Juris Doctor degree.
Did you know that you don’t always need to major in accounting to become a CPA? Each state sets eligibility requirements. Depending on where you live, your state’s requirements may be as little as a general bachelor’s degree and five to six college accounting courses.
The Content and Format of the CPA and Bar Exams
Other factors that separate the CPA Exam from the Bar Exam are the test format and the nature of the content. Obviously, the questions on the CPA Exam assess test-takers knowledge of accounting and the Bar Exam focuses on knowledge of the law. However, the nature of the test content, format and scoring procedures means that the CPA Exam is more rigid than the Bar Exam. In the CPA Exam, there are clear right and wrong answers for the questions asked of you, while much of the Bar Exam consists of questions that test your skills in using logic and applying your legal knowledge to unique situations. These questions don’t always have a right or wrong answer, because your performance on them is determined by the strength of the logical and legal arguments you make.
The format of these two tests is different. The CPA is a four-part exam that you take over the course of up to 18 months, while the Bar Exam consists of three parts that are usually taken over three consecutive days. The questions on the CPA Exam include multiple-choice questions, task-based simulations and, on one portion of the exam, a written communication task. One part of the Bar Exam consists of multiple-choice questions, while the other parts are writing prompts.
There’s much more to memorize for the CPA Exam than for the Bar Exam, but you need to have stronger skills in applying the knowledge you have to problems and scenarios presented in the Bar Exam. Both tests are challenging in different ways.
Pass Rates for the CPA Exam and the Bar Exam
One way to compare the CPA Exam and the Bar Exam is to look at the percentage of test-takers who pass their respective exams. The AICPA breaks down exam pass rates for each of the four test portions that comprise the CPA exam. In the first quarter of 2020, the last quarter for which the AICPA has data available, the Business Environment and Concepts had the highest pass rate, with 61.76 percent of exam takers passing this test. More than half of test-takers (55.42) also got a passing score on the Regulation test. Test-takers found the Auditing and Attestation and the Financial Accounting and Reporting sections of the exam harder. These two tests have a 47.97 percent and a 46.37 percent pass rate, respectively.
Bar exam pass rates are considerably higher than those for the CPA Exam, and passing rates are rising, according to the American Bar Association. The aggregate first-time pass rate for the Bar Exam in jumped from 75 percent in 2018 to 80 percent in 2019, Law.com reported.
If you looked at purely the pass rates to judge the difficulty of these two exams, you would think the CPA Exam was way harder than the bar exam. However, passing rates aren’t a completely objective measure of the difficulty of the tests themselves, because they also evaluate how well test-takers are prepared for the exams. For both exams, the school you attended has a big impact on the likelihood of you passing the exam. In 2020, the students of two law schools achieved 100 percent pass rates on the Bar Exam, according to U.S. News & World Report. All of the law schools ranked in the top 10 for first-time bar passage rates had more than 95 percent of their students pass the exam.
Pass rates at top-performing schools were somewhat lower for the CPA Exam than for the Bar Exam, but they still illustrate the difference having the right education can make. For the most recent year for which the National Association of State Boards of Accountancy has data available, more than 89 percent of students from the school with the highest first-time CPA Exam pass rate achieved a successful score on the exam, according to Accounting Today. The CPA Exam pass rate for students from all of the top 10 schools was above 80 percent, while the average pass rate for students from all schools was just 51.9 percent.
Your school isn’t the only factor that determines your success on a professional exam. Carefully selecting exam preparation materials, starting your study routine early and choosing study methods that fit your learning style can all help you succeed.