Preparing for CPA Exams: A Step-by-Step Guide

Last updated on September 20th, 2024 at 11:56 am

The Certified Public Accountant (CPA) credential is a hallmark of excellence in finance, accounting, and taxation. It symbolises a high level of expertise and dedication. Achieving the CPA credential opens doors to diverse career opportunities like business consultants, financial advisors, accountants, auditors, and tax experts. It increases earning potential, making it highly sought after by accounting professionals. The journey to becoming a CPA, however, involves passing a rigorous exam that tests a wide range of knowledge and skills.

Preparing for the CPA exam can be daunting without a strategic approach. This step-by-step guide to CPA exam prep offers a structured CPA study plan to help you tackle the vast content efficiently. With practical tips and effective strategies, this guide will transform the challenging task of CPA exam preparation into a manageable and rewarding journey. Rest assured, it’ll set you on the path to success in the accounting field. 

Let’s get started! 

Step 1 - Understanding the CPA Exam Format

Before starting your CPA journey, it's crucial to familiarise yourself with the CPA exam requirements. The CPA exam has four main sections:

1. Auditing and Attestation (AUD): This area covers audit procedures, attestation services, and professional responsibilities.
2. Business Environment and Concepts (BEC): This section includes topics like business concepts, economics, financial management, information technology, and operations management.
3. Financial Accounting and Reporting (FAR): FAR focuses on financial accounting standards, reporting, and analysis.
4. Regulation (REG): REG addresses federal taxation, ethics, professional responsibilities, and business law.

Each part of the exam features multiple-choice questions, task-based simulations, and written communication tasks. Knowing the content and format of each section is essential for thorough CPA exam preparation.

Step 2 - Meet the Eligibility Requirements

Before taking the CPA exam, you need to fulfill certain eligibility criteria, which can differ by state. To be eligible for the CPA exam, you generally need:

1. A bachelor's degree or equivalent from an accredited institution.
2. Coursework in accounting and business subjects.
3. Additional educational credits if your degree falls short.
4. English language skills if you are not a native speaker.
5. Transcript evaluation for degrees earned outside the U.S.

It's important to verify the specific eligibility requirements with your state board of accountancy.

Step 3 - Select Your State Board of Accountancy

To begin your CPA journey, select the state board of accountancy where you will register. Each state has unique CPA exam requirements and associated fees for the CPA exam. 

Make sure to carefully review the requirements of your chosen state to ensure they fit your qualifications and goals. Remember, you can only start the US CPA application process once the appropriate state board has verified your eligibility.

Step 4 - Apply for the CPA Exam

Once you have met your state's CPA exam requirements, you can apply to take the exam by applying either to the National Association of State Boards of Accountancy (NASBA) or directly to your State Board of Accountancy, depending on your chosen state. Make sure to enroll only in the sections you plan to pay for within a 90-day timeframe.

Here are the requirements:

• Submit your transcripts and, if required, a transcript evaluation report.
• Pay the application and exam fees.
• Wait for the state board to grant you the Authorization to Test (ATT).

Step 5 - Select and Schedule your Exam

Once you obtain your Notice to Schedule (NTS), you can arrange your exam date, time, and location according to your preferences. You can schedule and take the exam in any state, regardless of your eligibility verification method on the Prometric website.

It’s best to book your exam as soon as you get your NTS or at least five days before the test. Ensure you bring the NTS with you to the test center, as not having it will prevent you from taking the exam.

Step 6 - Start Preparing for the CPA Exam

To effectively prepare for the CPA Exam, follow these key steps:

• Gather CPA exam study materials: Obtain comprehensive study materials, including textbooks, video lectures, and practice question papers. These resources will cover all exam sections and help you understand key concepts.
• Develop a CPA study plan: Create a study plan that outlines your daily and weekly study goals. Aim for 1-2 hours of study per day and adjust based on your schedule. Include time for review sessions and practice exams.
• Use a structured CPA study plan: Enroll in a CPA course that provides structured lessons, practice tests, and simulations. This will help you stay organised and track your progress.
• Schedule regular study sessions: Allocate specific times for study each week and stick to your schedule. Consistency is key to retaining information and mastering exam content.
• Practice with mock exams: Regularly take practice exams to assess your understanding and readiness. This will help you become familiar with the exam format and improve your test-taking skills.
• Adjust your plan as needed: Review your progress periodically and adjust your CPA study plan if necessary. Focus more on areas where you need improvement and ensure all topics are covered.

Step 7 - Take the CPA Exam

On the day of your exam, to ensure optimal performance, follow these strategies: 

• Carefully read and understand all the instructions before starting, without rushing. 
• Effectively manage your time by setting and adhering to specific limits for each section or question. 
• If you encounter difficult questions, mark them and proceed. You can revisit them if time permits. 

Keep a positive mindset throughout the exam, focusing on answering each question to the best of your ability. 

Remember, to pass the US CPA exam, you need a minimum score of 75 out of 99. You have 18 months to complete all four sections, starting from the day you pass the first section, although this timeframe may vary by jurisdiction.

Step 8 - Pass the CPA Ethics Exam 

The final requirement for becoming a US CPA is passing the ethics exam. While not all states mandate this, it is essential to verify with your state's CPA board. 

After successfully passing the four main CPA exam sections, you need to take the ethics exam within two years of applying for your license. You have three attempts to achieve a passing score of 90. Following a successful attempt, you can then apply for your CPA license.

Additionally, you must also meet the experience requirements set by your state's board of accountancy. This usually involves working in accounting under the supervision of a licensed CPA.

CPA Exam Schedule

The CPA exam is available throughout the year, and you can register as soon as you meet the eligibility requirements. If you are a student, aim to take the exam before graduating, if your state allows, or immediately after. 

Recent graduates often perform better, so use your fresh knowledge by establishing a study plan immediately. Each exam section demands 110 to 190 hours of preparation, so a steady CPA study plan is the key.

US CPA Exam Question Patterns and Types

The CPA Exam consists of three main types of questions:

1. Multiple-Choice Questions (MCQs): These questions present four answer choices, from which you must select the most accurate one. Effective CPA exam preparation involves memorising concepts and practicing with sample questions and flashcards to enhance your ability to choose the correct answers.
2. Task-Based Simulations (TBSs): These questions assess your ability to apply accounting concepts in practical scenarios. Formats can vary, including fill-in-the-blanks, matching tasks, research assignments, and journal entries. To excel, practice a wide range of simulations to become familiar with different formats and problem-solving approaches.
3. Written Communication Tasks (WCTs): Present only in the Business Environment and Concepts (BEC) section, WCTs require concise, well-organised responses. Ensure your answers are direct, include an introduction and conclusion, and adhere to proper grammar and structure. Timed practice will help you manage the allotted time effectively for all written tasks.

MCQs and TBSs are included in all four sections of the CPA Exam, whereas WCTs are exclusive to the BEC section.

US CPA Job Opportunities

A US CPA has a broad range of career opportunities across various industries. Here are some key areas where CPAs can find employment:

• Public Accounting: CPAs can work in public accounting firms, providing services such as auditing, tax preparation, and consulting. These roles often involve working with a variety of clients, including individuals, businesses, and government entities.
• Corporate Accounting: Many CPAs find roles within corporations, managing financial reporting, internal controls, budgeting, and compliance. Positions such as Financial Analyst, Controller, and Chief Financial Officer (CFO) are common.
• Government Accounting: CPAs in government roles can work at federal, state, or local levels, handling accounting functions,  government agencies, and ensuring compliance with regulations.
• Nonprofit Organisations: Nonprofits also require CPAs for managing finances, ensuring proper accounting practices, and assisting with audits and compliance requirements.
• Consulting and Advisory: CPAs can offer specialised services in areas like forensic accounting, risk management, and business consulting, helping organisations with strategic planning and problem-solving.
• Tax Services: CPAs specialising in tax services provide tax planning, preparation, and advice to individuals and businesses, ensuring tax compliance and optimising tax strategies.

Wrapping Up

Successful CPA exam preparation requires a structured and strategic approach. Start by understanding the exam’s format and content, and develop a personalised study plan that covers all four sections thoroughly. You can enrol yourself in high-rated US CPA courses for high-quality study materials and practice exams to gauge your progress and refine your skills. Staying consistent with your preparation and seeking support from expert resources can significantly enhance your chances of passing.

For those looking for a comprehensive solution, the US CPA course offered by Imarticus is an excellent choice. 

The program provides a robust curriculum, expert guidance, and ample practice resources designed to equip you with the knowledge and confidence needed to excel in the CPA exams. 

With Imarticus, you can benefit from a structured learning path and dedicated support, setting you on the right path toward becoming a certified public accountant.

FAQs

How long is the US CPA exam?

Each section of the CPA exam lasts 4 hours. Therefore, finishing all four sections of the exam will require a total of 16 hours.

Is CPA harder than CA?

The difficulty of the CPA (Certified Public Accountant) exam compared to the CA (Chartered Accountant) exam varies depending on perspective. The CPA exam is generally considered slightly easier due to its multiple-choice format and a focus on practical application, with each of its four sections lasting 4 hours. In contrast, the CA exam is often viewed as more challenging because it involves extensive theoretical knowledge, long-answer questions, and a more rigorous preparation process.

When should I opt for the US CPA exam?

Recent graduates tend to achieve the highest pass rates for the CPA exam, so it's advantageous to attempt the exam shortly after finishing your degree or even while still in school if permitted by your state's regulations.

How much does the US CPA Exam cost?

According to the latest reports, approximate CPA exam costs range from $1,579.20 - $1,979.20.