Tackling the CPA Exam is a huge step, one that’s going to boost your confidence and your career. And while the path to becoming a Certified Public Accountant isn’t easy (you’re going to be an elite professional after all!), with a little organization and preparation, it’s absolutely possible to pass the CPA Exam on the first try.
There are plenty of things I did when I was taking the CPA Exam that I wish I would have done differently, but there are also plenty of things I know I did right. Ideally, you would walk away from the CPA Exam feeling like you did everything correctly, which is what we’re here for. We’re going to walk you through all the steps to take the CPA Exam and give you pointers along the way, so you’re organized and prepared to sit and pass on all four exam days.
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Before You Do Anything Else
A huge part of passing the CPA Exam on the first try is being organized and reducing stress, both of which go hand-in-hand. Preparation is one of the biggest keys to getting a passing score on all four CPA sections, and while that does include preparation for the concepts and testing material for each individual exam, it also includes the administrative preparations, like applying for the CPA Exam, getting your Notice to Schedule (NTS), and scheduling each exam.
So before you do anything else to prepare for the CPA Exam, I suggest you get your application in right away. Get in touch with your college’s transcript office before you graduate, and see when final transcripts will be available. You’ll need this in almost every state (unless you live in a state that lets you apply before you graduate), so knowing the exact date you can call and request transcripts to send to your state board of accountancy is very important.
The application process is usually fairly quick, but it can take four weeks or more for you to receive your Notice to Schedule after you select your exams and pay your exam fees. If you’re graduating at the beginning of May, that means you won’t be able to apply for individual exams until June. Getting your application into your state board of accountancy or NASBA as soon as possible after you graduate is crucial. Make sure you review your state’s eligibility for testing and then send in all the exam application materials ASAP.
A quick note on the CPA Exam application process:
Your NTS is only valid for 6 months. That means, if you sign up for all four exams during the initial application process, you have to take all four of them within the 6 month period or risk having to pay for the expired exam sections again. I wasn’t aware of this rule when I first applied for the exam and had to rush to pass all four sections before the NTS expiration date. If you feel you can finish all the exams in 6 months, then feel free to sign up for all four at once. If not, I suggest doing one or two at a time. Check out our guide below that helps you determine which exam section you should take first.
Determine When to Take Each Exam
There’s no one-size-fits-all order, but deciding when you’re going to take each section can help ease some of the stress around the exam. This will also help you plan for and schedule each of your four exams, so you don’t end up purchasing more than one NTS per exam. Let’s discuss each of the four exams and their content, and help you decide which order you should take each of the four sections of the CPA Exam.
Financial Accounting and Reporting (FAR)
Financial Accounting and Reporting has the following sections:
- Standard-Setting, Conceptual Framework, and Financial Reporting
- Financial Statement Accounts
- Local and State Governments
Financial Accounting and Reporting is the exam with the most content, but it’s also the exam with the most familiar concepts. You probably took at least four semesters of financial accounting courses, from beginner accounting to intermediate accounting. On top of that, you’ve probably taken cost accounting, managerial accounting, taxes, and audit. You may have even taken an International Financial Reporting Standards (IFRS) class, which will come in handy on FAR.
Even though the content for FAR can be overwhelming, it may be a good exam to start with because you’re already familiar with the concepts, and there are several topics tested on FAR that will crop up in AUD, REG and BEC. Alternatively, if you’ve been out of college for a while and aren’t as familiar with all of the content in FAR, it may be a good exam to end with this exam. The other exams will be a good base and review for FAR concepts.
Auditing and Attestation has the following sections:
- Professional Responsibilities, Ethics, and General Principles
- Assessing Risk and Developing a Planned Response
- Performing Further Procedures and Obtaining Evidence
- Forming Conclusions and Reporting
Auditing and Attestation pulls a fair amount of information from FAR, so taking it before or after FAR is a good choice. You’ll be able to cross-reference the information and easily apply FAR concepts to AUD. Also, Auditing was probably one of the courses you took toward the end of your college career, so can apply concepts from what you learned in class to the exam.
If you’ve been out of school for a while and don’t work in audit, it may be a good idea to save AUD until the end so you can benefit from the content you already learned while studying for the other exams. If you work in auditing currently, you can play with your AUD timing. Taking it first may give you a confidence boost and you may spend less time studying; however, if you’re like me and one of your exams falls during busy season, it may be good to make it AUD since you’ll actually be working with the exam concepts in real life.
Business Environments and Concepts (BEC)
Business Environment and Concepts has the following sections:
- Corporate Governance
- Economic Concepts and Analysis
- Financial Management
- Information Technology
- Operations Management
Business Environment and Concepts is going to pull mostly from your Operations Management, Managerial Accounting and Cost Accounting classes which you likely had sprinkled throughout your last three semesters. It does pull some information from FAR and AUD, so taking it before, after, or between these exams may be a good choice.
Regulation has the following sections:
- Professional Responsibilities, Ethics, and Federal Tax Procedures
- Business Law
- Property Transaction Federal Taxation
- Individual Federal Taxation
- Entity Federal Taxation
Of the four exam sections, Regulation is the one that is mostly its own entity. It does pull from other exams but is generally more focused on the tax and business law side, which aren’t as prevalent in the other exams. The majority of the exam is tax-based, so you’ll want to make sure you’re really solid on these concepts before you go into the exam and are comfortable navigating tax related simulations. Since REG’s concepts mostly stand on their own, it’s a good exam to take first or last.
So now that you know more about each CPA Exam and how they relate to one another, what order should you take them in? Like we mentioned before, it really depends. Do you like to do harder exams earlier and easier ones last? And which one would be considered a “hard” exam for you? Someone may do really well on FAR but struggle with REG. Doing your research early and deciding your exam order will help you smoothly transition from exam to exam without having to go through the vetting process each time you move on to a new section.
Find A CPA Review Course Conducive to Your Learning Style
Just because you can’t take the exam yet doesn’t mean you can’t start studying. I got my exam materials before I graduated from college, and started studying immediately after graduation in early May even though I didn’t receive my NTS until mid-June. This allowed me to be prepared to sit for my first exam at the beginning of the third quarter testing window of the year that started July 1st. This gave me a huge head start because I was finished with one exam with six months left in the year, and three months before I started my first public accounting job.
Passing all four parts of the CPA Exam on the first try is made possible by finding a CPA Review course that truly fits you. Believe me, this isn’t an exam you want to tackle without a prep course. Having said that, not all review courses are created equal, and there aren’t any regulated standards that a CPA Review course has to meet. Mostly, CPA Review courses gain their credibility through pass rates and reviews.
Before you decide on any one review course, it’s important you do research into not only the review courses themselves but what works for you when it comes to studying. We’ve broken down what you should think about as you look through review courses into seven key points.
This is the backbone of your exam prep course; you want to make sure whatever the technology is, it works for you. So what exactly do we mean when we say technology? Learning has changed significantly over the years, and we want to see how CPA Review companies have stepped up. Traditional learning gives us information and has us review it, memorize it, and regurgitate it when necessary. And while this does sometimes work, it’s a one-size-fits all model that has been proven to be less efficient than an individual approach.
When we talk about technology in a CPA Review course, we’re talking about how the course has taken new insights into learning and coupled them with the growing use of technology to create the best learning experience possible for CPA candidates. There are a few specific things you should look for when you’re reviewing the technology of your review course:
Adaptive Learning Technology
Adaptive learning technology has taken over the CPA Exam marketplace. The idea behind adaptive learning is it’s an individual approach. You start out with a wide array of concepts you have to learn. But instead of visiting each one and learning it, your initial knowledge is assessed, and the technology determines what you need to study and how long.
Since you’re different than any other student, and you’re stronger in some areas and weaker in others, the adaptive learning technology should tailor a study plan specifically to your knowledge areas. You also want to make sure the technology continuously adapts. Your learning should be based on how you develop in each concept over time instead of your original knowledge base. You may find some concepts are easier to learn than others; you want to make sure the technology takes this into account and helps you focus on areas you really need to practice while concurrently reinforcing ideas you’re becoming more proficient in.
These days, many CPA Review providers claim that their courses are adaptive, but once you take a closer look at specific features and capabilities, you’ll find that many fall short. Learn how the top CPA Review courses stack up here.
Hours of Study
Generally, courses with a more traditional study method and approach have longer study times. Why? Because you have to study everything, and you usually are encouraged to study it for the same amount of time as everyone else. But, for example, if you’re already really good at leases, why should you spend hours watching lease lectures and going through tons of multiple choice questions on leases? Adaptive learning is a more individual approach and will reduce your study time by having you focus on what you really need to enforce. Now, this doesn’t mean you’ll never see topics you’re already good at. The idea is to reinforce concepts you’re familiar with without making you spend more time on them than you have to and to build your knowledge in topics you aren’t as solid. This helps lay a great knowledge base as you go into the exam.
In the past, whether you were going to pass or not was largely based on how many hours you studied. If you put in 200 hours for each exam, there was a higher likelihood you would pass. But this isn’t a great estimator of pass rates for two reasons. One, not everyone needs to study for the same amount of time. We’re all different, and someone may be able to pass REG on 75 hours of study while another candidate will take 120. Either way, we need to understand that’s totally okay. There is no one size fits all model. Second, saying 200 hours is the cutoff to pass is completely subjective. There may be some evidence to support this theory, but we want concrete, individual, objective numbers that are going to tell us whether or not we’re going to pass.
That’s where CPA Review material insights should come in. Finding a course that gives you an objective idea of whether you’re not you’re going to pass the exam is HUGE in terms of reducing your stress and helping you feel ready for the exam. Look for a CPA Review course that has some marker of how your performance stacks up to the actual CPA Exam. If you can find one that gives you an actual score estimate, even better.
The Pass Rates
It may sound obvious, but you want to buy exam materials with high pass rates. After all, you’re likely going to be spending at least $1,000 on exam materials, so you want to make sure you’re getting the best value for your money. Most CPA Exam Review course websites will have pass rates, but you can also look up independent companies that review CPA Review courses to see their thoughts on pass rates. Bottom line, you want a review course that has pass rates above the average pass rates released by the AICPA every quarter, which usually hover around 50%. Ideally, the pass rates for your review course would be significantly higher than 50%.
CPA Exam Review course companies should have honest reviews on their website. However, you can always look at independent reviewers of CPA Review courses to see what they think of each course. There are also plenty of forums out there that will have feedback about review courses. Keep in mind though that feedback is highly individual, so look for people who have a similar learning style to you and read their reviews.
The Course Material Types
Your review course should have materials that work with your learning style. When I was studying for the CPA Exam, I made sure my CPA study materials came with physical books I could read and refer to, because I enjoyed taking notes and highlighting actual materials. Audible learning wasn’t my style, and I eventually learned I could skip the lectures and just use physical books and still pass the exam.
You’ve had four years of college to learn your specific learning style. Think about what worked for you and what didn’t work for you while you were studying, and look for exam materials that are conducive to that learning style.
For some candidates, passing the CPA Exam on the first try may mean taking the entire 18-month window. For others, it may take only a few months. Again, that’s totally okay. Doing what you’re comfortable with and aligning your learning with your learning style is the secret sauce to passing. However, surprisingly, not all review courses give you access for however long it takes you to pass the exam. As you look through review courses, take note of how long you have access to the materials, and remember that even the most well-laid plans can go awry. Finding a review course that gives you access until you pass the exam may come in handy down the road.
Here’s the thing about the accounting field: it’s constantly changing, especially with new technologies being introduced every year. Along with changes in the accounting field come changes in standards, which are eventually reflected on the CPA Exam. This means that the topics on the CPA Exam may change from year to year depending on updates within the field. Ideally, your Exam Review materials will update automatically with these exam updates, but this isn’t always the case. As you look through materials, especially if you’ll be taking some exams one year and others the next, make sure the course you select automatically updates their materials to reflect CPA Exam changes.
If you want to pass the CPA Exam on the first time, it’s crucial you select exam materials that fit your learning style and are individualized to YOU. So start reviewing different materials early, make sure they satisfy the 7 tips above and get them purchased as soon as possible so you can start studying.
Get the Application and Registration Process Straight
Now that you’ve figured out when you’re going to take each exam, or at least which exam you’re going to start with, you’ll want to register to take your first exam. At this point, you should have applied with either NASBA or your state board of accountancy to take the exam, paid your exams fees, and started studying for your first exam.
Hopefully soon after, you’ll receive your Notice to Schedule that allows you to set a date for your first exam. Follow the steps below to schedule your first exam:
- Have your NTS handy
- Log on to Prometric’s website
- Use their “Locate a Test Center” tool to find a location that’s easily driveable/commutable
- Go back to the home screen and select “Schedule My Test”
- Select your country and state
- Review and agree to Prometric’s policies
- Use the Exam Section ID to sign up for your first exam
- Select a date and time that work for your study timeline and your commute time to the testing center
That’s it! You can always log on and reschedule an exam, but keep in mind that dates can fill up quickly, so scheduling as early as possible is your best option.
Create a Study Schedule
Believe it or not, this is the first step in our list where you have an actual exam date and are actively studying to pass the exam on that date. By going through all the items mentioned above first, you’ll be perfectly organized and poised to have a low-stress exam experience. But now, let’s jump into your study schedule and how you should set it up to pass the exam on the first try.
Line Up Studying With Your Exam Date
At this point, you know how many weeks you have to study until your exam. Create a study schedule that gets through the materials two weeks or so before your exam date so you can have a few weeks for a final review and practice exams. If you purchased CPA Exam study materials with a built-in study planner, ensure you put in your exact exam date and the software will create a study plan for you.
Determine What You’ll Study Each Day
If you have traditional learning materials, it’s a good idea to pencil in what you’ll study or how much you’ll study each day. You can do this with a physical pen and paper, or you can create a spreadsheet that walks you through each day. This will help you stay on track to finish all the materials on time with a review phase.
If you have learning materials that use adaptive learning technology, the algorithm in the technology should tell you what to study each day based on your strengths and weaknesses, as well as how you progress throughout the course. This is generally a better, more individualized option because it will show you what to study each day as opposed to you determining what you need to work on. It means you’ll spend less time studying and less time deciding what to study. When I was studying for the exam, I would have hours in the morning of analysis paralysis because I didn’t have adaptive materials that told me what to study. I would have to decide on my own, which cut into my valuable study time. Adaptive learning technology eliminates this time by telling you what you need to study and for how long.
Let Friends and Family Know What You’re Doing
Once you let your friends and family know you’re studying for the CPA Exam, and after you tell them how important it is to you to pass, studying will become much easier. If you don’t let your friends and family know what you’re doing, you may be bombarded with messages to participate in activities outside of studying. These can be hard to resist, especially if you’re in the middle of a particularly grueling or frustrating study session. Tell friends and family early to give you a little space to study, and that you’ll let them know when you have free time for activities outside of studying. It’s just one less distraction from your study time.
Build in Breaks Based on Your Best Study Habits
Having said that, keep in mind it shouldn’t be all studying all the time. Many of us need to have breaks when studying. Some of us are marathon studiers that can go hours without a break but need one at the end of the day, and some of us (me included) need to have frequent breaks throughout the day. Decide which type you are (or if you fall somewhere in the middle), and build in actual study breaks into your day. Then use them. Go for a walk, go to the gym, or let your friends and family know you’re free to be social.
I always think it’s a good idea to build in one day during the week where you don’t study at all, or you do a small amount of studying in the morning. These long study breaks can be used to decompress from a long study week and help you go back to your next session refreshed.
Get Familiar With the Actual Exam
Even if you get the best CPA Exam review course and build out the perfect study schedule, if you start the exam on exam day and aren’t familiar with the format, you’re going to struggle. That’s why it’s really important to spend some time going over practice exams to not only see how your scores stack up, but to get familiar with how the exam works. Let’s talk about the five areas on the exam you need to be familiar with before you even walk in on exam day.
How the Testlets Work
There are five testlets on each exam: the first two are multiple choice and the last three are Task-Based Simulations or Written Communication (BEC) Tasks. You can move back and forth between questions on an individual testlet, flagging items you don’t know and coming back to them later. However, once you move on from one testlet, you cannot go back to change any answers; you have to move on to the next testlet. The testlets for the multiple choice questions use a multi-stage adaptive test delivery model. This means the first testlet you have will be of average difficulty. If you do well, the next testlet will be more difficult. If you do average, the next testlet will be the same difficulty. The software essentially “adapts” to how well you’re doing as you progress.
Multiple Choice Format
The format of each multiple choice questions is going to be the same across exams: one question followed by four possible answers. However, each of the four exams has a different number of multiple choice questions within the first two testlets, which we’ve listed below:
FAR – 66 total questions, 33 per testlet
AUD – 72 total, 36 per testlet
BEC – 62 total, 31 per testlet
REG – 76 total, 38 per testlet
Knowing what the exam breakdown is before taking the exam will help you better set your expectations and reactions on exam day, as well as help with timing, which we’ll discuss below.
Knowing how to work the Task-Based Simulations (TBS) using the tool provided, and knowing how to toggle back and forth between them is key. There are four main types of simulations: research, matching, fill-in-the-blank, and journal entries. Familiarize yourself with each of these types of sims as you work your way through the course and during your practice exam. Make sure you really take a stab at them as opposed to just guessing and looking up answers.
You also have Written Communication Tasks (WC) on BEC, where you will actually have to write a business memo, email, or other form of documentation. Again, make sure you’re giving these a genuine try on the practice exams. This will help you better prepare for the real thing on exam day. Here is a breakdown of the simulation on each exam:
FAR – 8 TBS over 3 Testlets: 2 in the first, 3 in the second, 3 in the third
AUD – 8 TBS over 3 Testlets: 2 in the first, 3 in the second, 3 in the third
BEC – 4 TBS over 2 Testlets: 2 in the first, 2 in the second; 3 WC in 1 testlet
REG – 8 TBS over 3 Testlets: 2 in the first, 3 in the second, 3 in the third
You also want to make sure you’re very familiar with the Authoritative Literature because you can use it on your sims to dig into questions you aren’t sure of. Again, knowing what to expect out of sims on exam day is crucial. Make sure you’re practicing lots of sims throughout your studies, as well as on the practice exams.
Timing on the CPA Exam can make or break whether or not you pass. Before you sit for the actual exam, you need to take a practice exam in a simulated environment and play with the timing. How much time should you take on each multiple choice section? What about on each sim testlet? Do you need extra time on the Written Communication Tasks or are you a really good writer? Breaking out your time so you have the time to answer every question can be the difference between a passing and failing score. Remember, the CPA Exam is positively graded, which means you get points for every answer you get right as opposed to losing points for every answer you get wrong. Make sure you have time to answer every question so you can get as many points as possible.
You’re going to be presented with a number of tools on the CPA Exam, from a calculator to Excel spreadsheets. Make sure you know how to utilize these tools to your advantage during the exam. Learning how to use functions in Excel is especially important, and will help you fly through questions that would otherwise take double the time on a calculator.
Keep Your Momentum
Probably the hardest part about passing the CPA Exam on your first try is continuing to push through the mental barriers that come up multiple times during each exam phase. As you get into the thick of studying and prepare to take exams, take a step back and ask yourself why you’re doing this. Putting a value on your CPA Exam will help you push through the difficult parts and continue to study and take exams until you pass. The stronger your “why” for taking the exam, the more motivated you’ll be to study, the more likely you’ll pass the CPA Exam on the first try.