How Difficult Is the CPA Exam?

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Is it hard to become a CPA? If you want to become a Certified Public Accountant (CPA), one of the biggest obstacles you will face in the pursuit of your CPA license is passing the professional credentialing exam. The four-part Uniform CPA Examination, developed and scored by the American Institute of Certified Public Accountants (AICPA), is notoriously difficult. Only around half of first-time test-takers, most of whom have more college studies than required for a bachelor’s degree, earn a passing score. However, overcoming the challenges of the CPA exam is possible with plenty of preparation and education.

how hard is it to become a CPA

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How Difficult Is the CPA Exam?

When many prospective students ask, “Is it hard to be a CPA?” they’re often referring to the certification exam itself, among other aspects of the career. A passing score on the Uniform CPA Examination is required to attain licensure as a CPA in any state in the U.S. This exam consists of four parts and has a reputation for being so difficult that, even among experienced well-educated accountants, exam pass rates are often in the range of just 50 percent.

What to Expect From the CPA Exam

The four parts of the Uniform CPA Exam are Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR) and Regulation (REG).

how difficult is the CPA exam

The AUD Section of the CPA Exam

The Auditing and Attestation section of the exam begins with a focus on ethics, the professional responsibilities of Certified Public Accountants and general principles of accounting. This section makes up 15 to 25 percent of the exam.

The next area of the AUD section of the exam, which accounts for 25 to 35 percent of the test content, emphasizes assessing risk and developing a planned response. Another 30 to 40 percent of the test covers performing further procedures in financial reporting auditing and obtaining evidence. Finally, questions in the area of forming audit conclusions and reporting these conclusions make up 10 to 20 percent of the Auditing and Attestation exam section.

Broken down by skills, the test-taker’s abilities in evaluation are weighted at 5 to 15 percent, with skills in analysis weighted at 20 to 30 percent. Skills in application of principles and procedures are weighted at 30 to 40 percent, and skills in remembering and understanding concepts are weighted at 25 to 35 percent.

The BEC Section of the CPA Exam

In the Business Environment and Concepts section of the CPA Exam, test-takers are asked to complete questions in five content areas. Questions on enterprise risk management, internal controls and business processes make up 20 to 30 percent of this exam section. Between 15 and 25 percent of the questions fit into the category of economics, including economic and business cycles, market influences on business and financial risk management.

Questions in the area of financial management make up 10 to 20 percent of the BEC exam section. This content area includes questions pertaining to capital structure, working capital, financial valuation methods and decision models. Two areas, information technology and operations management, both account for 15 to 25 percent of the exam section. The former section focuses on the test-taker’s understanding of IT, the risk associated with IT and controls used to manage these risks and data management and relationships. The operations management section encompasses questions pertaining to cost accounting, financial and non-financial measures of performance management, process management and planning techniques for budgeting, analysis, forecasting and projection.

Evaluation skills don’t factor into a test-taker’s performance on this part of the CPA Exam. Application skills are the most important for this exam section and are weighted at 50 to 60 percent of skills allocation scoring. Analysis skills are weighted at 20 to 30 percent, and skills in remembering and understanding were weighted at 15 to 25 percent.

The FAR Section of the CPA Exam

Between 25 and 35 percent of the Financial Accounting and Reporting section of the CPA Exam is in the area of conceptual framework, standard-setting and financial reporting, which includes balance sheets, income statements, profit-loss statements, cashflow statements and public company reporting statements.

Another 30 to 40 percent of questions fit into the area of select financial statement accounts, and 20 t0 30 percent are part of the select transactions area. A small proportion of the questions in this section are in the content area – 5 to 15 percent – of state and local governments.

As skills allocation goes, skills in analysis were weighted at 25 to 35 percent, and skills in remembering and understanding were weighted at 10 to 20 percent. Again, skills in application were weighted at 25 to 35 percent of the exam.

The REG Section of the CPA Exam

The final section of the CPA Exam is the Regulation section. Ethics, professional responsibilities and federal tax procedures make up 10 to 20 percent of the questions on this exam section. This area includes content on federal tax procedures, ethics and responsibilities in tax practice, legal duties and responsibilities to clients and third parties and licensing and disciplinary systems, particularly state boards of accountancy.

Another 10 to 20 percent of content fits into the area of business law. Federal taxation of property transactions accounts for 12 to 22 percent of the REG section questions, and federal taxation of individuals is a topic that makes up 15 to 25 percent of the test. The largest area of questions on this section of the exam is federal taxation of entities, which comprises 28 to 38 percent of the test.

Skills in both analysis and remembering and understanding are weighted at 25 percent to 35 percent on the REG section of the CPA exam, while skills in application are weighted at 35 to 45 percent.

The Difficulty of CPA Exam Questions and Formats

Each part of the CPA Exam includes a combination of medium-difficulty and difficult multiple-choice questions and task-based simulations, or case studies, candidates must respond to in order to pass the exam. The Business Environment and Concepts section is unique in that it also includes written communication tasks.

Each section of the CPA exam allows test-takers four hours, putting the overall time to complete the exam at 16 hours. Once a candidate begins the process of taking the exam, he or she must complete all four sections in 18 months, the BLS reported.

In 2017, the CPA Exam became “more difficult,” as the time to complete the exam increased from 14 hours to 16 hours and the number of multiple-choice questions was reduced in favor of more task-based simulations that require higher-level problem-solving skills. A stronger focus on the test-taker’s depth of understanding of accounting concepts and practices and their ability to apply them meant that rote memorization alone would no longer be sufficient to perform well on the CPA Exam.

Passing Scores on the CPA Exam

In the CPA exam, what counts as a passing score is any score of 75 or higher on each section of the exam. Though this score is out of a possible 99 points, it doesn’t refer to either a percentage or a percentile point but instead to a scaled – but, it’s important to note, not “curved” – score based on the difficulty of the questions, according to the AICPA. The CPA exam uses a testing process known as multistage testing (MST), in which test-takers who do not perform well on their first, medium-difficulty testlet within a testing section get a second medium testlet rather than a difficult testlet next. While it may not seem fair that some test-takers receive harder questions than others, the scoring of this exam takes the difficulty of the questions into account.

You must pass all four sections of the CPA exam to pass the test as a whole and move forward with attaining your CPA license. This is no easy task. The pass rate for each section of the exam is typically only in the 40s and 50s. In 2021, 61.94 passed the BEC portion of the test, 59.88 passed the REG section and 47.98 passed the AUD section. Only 44.54 percent of test-takers earned a passing score on the FAR section of the exam.

Only getting the multiple-choice questions right is not enough to pass the CPA Exam. You must correctly answer task-based simulations, and the written communication component of the BEC section, as well as the multiple-choice questions to get a passing score.

Achieving Success on the CPA Exam

Just because the test is difficult and exam pass rates are somewhat discouraging doesn’t mean that you should give up. More than 669,130 American accountants have passed the exam and attained their CPA licenses already, the National Association of State Boards of Accountancy reported in 2021. There are plenty of ways you can help yourself succeed.

First, choose wisely when finishing your last 30 semester hours of college. Taking courses that will help you succeed on the CPA Exam – or better yet, choosing a certificate or master’s degree program intended for aspiring CPAs – can make a big difference in your readiness to take the exam and your ability to succeed.

Don’t make the mistake of thinking that since you earned a degree, you don’t really need to study for the CPA exam. Using reliable exam preparation materials can improve your chances of doing well enough to pass the exam. The AICPA offers Exam Blueprintssample tests and tutorial topics, but students typically purchase expensive but effective CPA review course study materials to help them pass the exam, as well.

Earning a passing score on all four parts of the CPA exam isn’t easy, but the rewards of a career as a CPA are well worth the time, cost and hard work. CPAs can advance to senior management and partner roles, and they earn wages 10 to 15 percent above what accountants without the license would earn, according to the AICPA.

Between the application fee, exam fees and study materials, the cost of the exam adds up. You could easily spend between $1,200 and $3,000 on preparation and study materials for the CPA Exam, but many employers pay for part of the cost of their accountants attaining their CPA license.

How Hard Is It to Become a CPA?

Of course, the CPA exam itself is not the only challenging part of becoming a Certified Public Accountant. Just meeting the requirements for licensure and for exam eligibility requires a great deal of work both in the classroom and in the accounting industry. Each state sets its own requirements for CPA licensure. Generally, candidates need to meet the following criteria to be eligible to pursue licensure.

  • A bachelor’s degree: A four-year undergraduate degree is the minimum level of formal education required to become a CPA. An accredited bachelor’s degree from a reputable school can help you fulfill this and other eligibility requirements.
  • Formal studies in accounting content: Technically, your degree doesn’t have to be in accounting to qualify for licensure as a CPA. However, you do need to complete a minimum number of credits – established by the state in which you’re seeking CPA licensure – in accounting and in business more generally.
  • 150 semester hours of study: Even though a bachelor’s degree is the minimum formal education you need to attain this certification, a typical bachelor’s curriculum consists of just 120 semester hours. Under the updated CPA requirements, students must acquire an additional 30 college credits, or another year of full-time study. Some students use a master’s degree program to meet the 150-credit requirement, but going to graduate school isn’t necessary.
  • Accounting experience: Although different states may establish different experience requirements for CPA licensure, you typically need at least two years of accounting work experience to be eligible for licensure.

Once you meet these requirements, you need to apply for the exam and pay the fees before you get a Notice to Schedule (NTS) and can reserve your seat at your first exam.

From applying to sitting for your first exam, the process can take a few to several months.

How Hard Is It to Become an Accountant?

What if you’re not committed to becoming a CPA specifically – how hard is it, then, to work as an accountant? You should still plan to go to college, since most accountants and auditors hold a minimum of a bachelor’s degree. However, if you’re not seeking specific credentials like the CPA designation, you can skip the extra year of study and the four-part CPA Exam. It’s still beneficial to major in accounting, of course, and to take advantage of internship opportunities that can help you gain real-world experience in the field.

The CPA credential and the difficult exam required to attain it may not be right for every accountant, but for those willing to undertake these additional challenges, the rewards – like greater earning potential and increased job opportunities – are worthwhile.

You can also start your accounting career working in an accounting clerk role, which you may acquire with either an associate’s degree in accounting or even just a high school diploma.

Additional Resources

How Do I Prepare for the CPA Exam?

How Do I Become a CPA?

What Degree Does a CPA Need?

What Are the Benefits of Becoming a CPA?

How Long Do You Have to Go to School to Become a CPA?

How Advanced Does My Degree in Accounting Need to Be to Become a CPA?

What Is the Salary Potential for a Certified Public Accountant (CPA)?

What Should You Know When You Interview for a Job as a CPA?

How Long Does It Take to Become an Accountant?