You cannot become as a certified public accountant unless you have passed the requisite exams for the CPA course. The CPA exam is subdivided into four sections which usually cover different topics and subtopics. The exams are usually prepared by the American Institute of Certified Public Accountants (AICPA). If you are doing the tests consecutively, you can complete all four sections within a period of eighteen months. To have passed the exam, you must attain a score of at least 75.
Which Are The Four Parts of CPA exam?
1. Auditing and Attestation (AUD)
This section of the exam usually covers areas that touch assurance and audits in public accountancy. This part is divided into four topics that are meant to measure your knowledge on issues such as reviews, audits, attest engagements and the code of conduct followed by the AICPA.
Below is a breakdown of four the topics covered under this section.
• Topic one covers the general principles of accounting, ethics and the professional responsibilities for accounting professionals.
• Topic two covers areas on how to develop planned resources and how to assess risks.
• Topic three covers how to perform in-depth accounting procedures and how to obtain evidence.
• The last part of this section covers matters on how an accounting professional draws conclusion from the data at hand and reports the findings.
2. Business Environment and Concepts (BEC)
This is a wide topic that delves into the environment that enterprises thrive in. It covers a wide range of topics such as management accounting and cost accounting, micro economics and macroeconomics and business information systems.
The topics covered in this section include:
• Operations management
• Economics: Economic concepts and analysis
• Information technology
• Financial management
• Corporate governance
3. Financial Accounting and Reporting (FAR)
This is section is the backbone of an accounting course. The topics covered in this section touch on how financial accounting is carried out and reported.
The topics in this section cover the Generally Accepted Accounting Procedures (GAAP) used in the US, the frame work of the Financial Accounting Standards Board (FASB) and the rules covered in the International Financial Reporting Standards (IFRS).
The topics covered under this section are:
• Conceptual accounting framework, financial reporting and financial reporting
• Financial statement accounts
• Financial transactions
• Accounting in relation to local and state governments
4. Regulation (REG)
This section is broad and covers matters on business growth and entrepreneurship, business law, ethics in accounting and taxation.
The topics covered in this section include:
• Business law
• Ethics and personal responsibilities and taxation procedures used by the federal government
• Federal taxation for individual persons
• Federal taxation for properties
• Federal taxation for corporations and entities
Though the AICPA sets the exams for these sections, it is not in charge of administering them. Instead, each individual state usually administers the exams to candidates and accredits those who pass to act as certified public accountants.
According to the set rules, an individual can take as many exam sections as they wish within one testing window.
Each of the topics covered by the Four Parts of CPA exam usually has its own grading. However, this grading usually varies from time to time depending on the guidelines passed by the AICPA.
