In 2024, the CPA exam saw big changes with the CPA Evolution. The current CPA exam sections are split into two parts: Core and Discipline. The Core sections include:
- Auditing & Attestation (AUD)
- Financial Accounting & Reporting (FAR)
- Taxation and Regulation (REG)
Candidates who did not pass the BEC (no longer a CPA exam section) must choose one of the following Disciplines to take: Business Analysis & Reporting (BAR), Information Systems and Controls (ISC), and Tax Compliance and Planning (TCP).
Let’s look at how the CPA exam is formatted, structured, and scored.
Key Takeaways
- Core and Discipline Structure: The CPA exam is now divided into Core sections (AUD, FAR, REG) and Discipline sections (BAR, ISC, TCP), allowing candidates to focus on areas relevant to their career goals.
- Content and Skill Assessment: Each section of the exam covers specific content areas and skills, ranging from financial statement audits and compliance to data and technology concepts and applied research.
- Question Format: The exam includes multiple-choice questions (MCQs) and task-based simulations (TBSs) with varying difficulty levels that impact scoring. TBS questions are now equally weighted with MCQs, except for ISC, where they count for 40%.
- Specialization Options: Candidates who did not pass the BEC section must choose from BAR, ISC, or TCP disciplines, each tailored to different aspects of accounting and finance.
- Exam Preparation: Investing in a CPA review course can significantly enhance your preparation, offering practice questions and simulations that mirror the actual exam format.
CPA Exam Section Content
Each of the Core CPA exam sections encompasses different broad topics that are broken down as follows:
Auditing (AUD)
The AUD section of the CPA exam evaluates a CPA’s ability to conduct various audit and attestation engagements. These include financial statement audits, compliance audits, internal control audits, and audits of entities receiving federal funds or under ERISA. It also covers assertion-based examinations, direct examinations, and agreed-upon procedures. The assessment focuses on planning, risk assessment, evidence gathering and reporting, integrating data and technology concepts, professional skepticism, and applied research.
Content is organized into areas, groups, and topics, each with representative tasks that CPAs might perform during engagements. These tasks are examples, not exhaustive lists, and include using auditing standards, verifying data accuracy, and making informed decisions based on evidence.
Content Allocation
- 15–25% – Ethics, Professional Responsibilities and General Principles
- 25–35% – Assessing Risk and Developing a Planned Response
- 30–40% – Performing Further Procedures and Obtaining Evidence
- 10–20% – Forming Conclusions and Reporting
Financial Accounting and Reporting (FAR)
The FAR section of the CPA exam evaluates a CPA’s knowledge and skills in financial accounting and reporting for both for-profit and not-for-profit entities.
The exam covers standards and regulations from:
- Financial Accounting Standards Board (FASB)
- U.S. Securities and Exchange Commission (SEC)
- American Institute of Certified Public Accountants (AICPA)
Key Focus Areas
- Preparation and Review of Financial Statements: Ensuring compliance with applicable frameworks.
- Data and Technology Concepts: Verify data accuracy and prepare supporting schedules for account balances.
- Applied Research: Using resources like the FASB Accounting Standards Codification to identify issues and determine responses.
- Government Accounting: Foundational concepts related to state and local government accounting from the Governmental Accounting Standards Board (GASB).
Content Allocation
- 30–40% – Financial Reporting
- 30–40% – Select Balance Sheet Accounts
- 25–35% – Select Transactions
Taxation and Regulation (REG)
REG is tests a CPA’s knowledge and skills in several key areas:
Key Areas
- U.S. Ethics and Professional Responsibilities: Focus on tax practice.
- U.S. Business Law
- U.S. Federal Tax Compliance: Concentrating on recurring and routine transactions for individuals and entities.
Federal Tax Compliance
- Preparation and Review of Tax Returns: Evaluate a CPA’s role in preparing and reviewing tax returns.
- Data and Technology Concepts: Verify the completeness and accuracy of data used in tax returns and utilize automated validation checks and diagnostic tools to identify potential errors.
- Applied Research: Using resources like the Internal Revenue Code and Treasury Regulations to identify issues, analyze facts, and determine appropriate responses.
Content Allocation
- 10–20% – Ethics, Professional Responsibilities and Federal Tax Procedures
- 15–25% – Business Law
- 5–15% – Federal Taxation of Property Transactions
- 22–32% – Federal Taxation of Individuals
- 23–33% – Federal Taxation of Entities (including tax preparation
Business Analysis and Reporting (BAR)
If you’re a CPA candidate eyeing roles in assurance or advisory services, financial statement analysis, or financial and operations management, the BAR discipline might be your best bet. This area covers:
- Data analytics
- Financial risk management
- Financial planning techniques
You’ll also explore advanced topics such as revenue recognition, leases, business combinations, derivatives, hedge accounting, and employee benefit plan financial statements.
Content Allocation
- 40–50% – Business Analysis
- 35–45% – Technical Accounting and Reporting
- 10–20% – State and Local Governments
Information Systems and Controls (ISC)
For those interested in technology and business controls, the ISC discipline is a great fit. It’s geared toward CPA candidates focusing on:
- Business processes
- Information systems
- Information security and governance
- IT audits
Key areas include IT and data governance, internal control testing, and information system security, such as network security, software access, and endpoint security.
Content Allocation
- 35–45% – Information Systems and Data Management
- 35–45% – Security, Confidentiality, and Privacy
- 15–25% – Considerations for System and Organization Controls (SOC) Engagements
Tax Compliance and Planning (TCP)
If taxation piques your interest, the TCP discipline is tailored for you. This focuses on advanced individual and entity tax compliance, including:
- Personal financial planning
- Entity planning
- Inclusions and exclusions to gross income
- Gift taxation compliance and planning
Advanced topics may cover consolidated tax returns, multijurisdictional tax issues, and transactions between entities and their owners. You’ll also explore the tax treatments of forming and liquidating business entities.
Content Allocation
- 30–40% – Tax Compliance and Planning for Individuals and Personal Financial Planning
- 30–40% – Entity Tax Compliance
- 10–20% – Entity Tax Planning
- 10–20% – Property Transactions (disposition of assets)
CPA Exam Sections Structure and Format
Each exam part is formatted into question blocks called testlets. These testlets contain either multiple-choice questions or task-based simulations. Additionally, each test starts out with several MCQ testlets followed by several Task-Based Simulation (TBS) testlets.
Multiple-Choice Question Testlets
Previously, the CPA Exam used a multistage adaptive testing format for multiple-choice questions, where difficulty levels were adjusted based on performance. Each exam section would begin with a medium-difficulty MCQ testlet; a high score on this testlet would lead to a more challenging set of questions in the next. Conversely, if a candidate performed poorly, they would receive easier questions. This adaptive approach encouraged high performance, as correctly answering difficult questions contributed more to the overall score than easier ones. Here’s what it looked like:
However, this format changed with the launch of CPA Evolution in January 2024. Multistage adaptive testing is no longer used in the CPA Exam, meaning MCQs are now fixed in difficulty rather than adjusting according to performance.
Additionally, operational questions still contain pretest questions, which are indistinguishable from scored questions and do not affect the candidate’s final score. These pretest questions allow the AICPA to evaluate potential new content for future exams.
Task-Based Simulation Testlets
Task-based simulations (TBS) on the CPA Exam are problem sets designed to assess a candidate’s ability to apply concepts across various scenarios, which are tested at four skill levels, including analysis and evaluation. Although TBS testlets vary slightly across exam sections, they generally include a range of interactive formats tailored to the content of each section. This often includes exercises that require detailed responses, beyond matching or filling in blanks.
Notably, as of the CPA Evolution launch in January 2024, TBS no longer includes the previously required research component where candidates would cite authoritative literature. The format now focuses solely on demonstrating applied knowledge relevant to each section’s core topics, without an explicit research task.
In the exam scoring structure, TBS questions have consistently comprised around 50% of the score allocation for most sections; this is not a recent shift. Candidates should expect a four-hour window per exam section, allowing sufficient time to navigate multiple TBS and MCQ testlets.
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CPA Exam Scoring
The AICPA keeps changing the way it grades and weights the multiple-choice questions on the exam. It wasn’t that long ago that the questions were worth more than 70 percent of the total points on the test. That’s crazy. Each question was worth a ton.
In recent years, they have been backing off the value of MCQs and putting more importance on task-based simulations. The MCQs are weighted evenly with the simulations. Thus, the MCQs are only worth 50 percent of your points and the simulations are worth the other 50 percent. The only exception for this is the ISC Discipline, in which TBS only counts for 40%
Here’s a breakdown of how the CPA exam is graded and weighted.
Practical Study Tips for CPA Exam Success
No matter which section you tackle first, a solid study plan is your ticket to passing the CPA exam. Here are some tips to keep you focused and on track.
- Use Trusted Study Materials: Invest in reputable CPA review courses like Becker, Surgent, or Gleim. These platforms excel at providing task-based simulations and multiple-choice questions that mirror the CPA exam format. Their alignment with the AICPA blueprints ensures you’re studying the right stuff.
- Stick to a Study Schedule: Consistency is key. Aim for 2-3 hours of daily study time. For most sections, plan for 80-100 hours of prep, but be ready to put in up to 120 hours for FAR—it’s a beast.
- Master Task-Based Simulations: TBSs aren’t just important—they’re critical. These simulations make up a significant portion of the exam, so practice them under timed conditions. This will improve your speed, accuracy, and overall confidence.
- Review the CPA Exam Blueprints: The AICPA blueprints are your cheat sheet for success. They outline every topic and objective the exam will cover. Build your study plan around these blueprints to avoid wasting time on irrelevant material.
By combining a CPA prep course, disciplined study habits, and a focus on what matters most, you’ll be ready to take the CPA exam with confidence.
Conclusion
In 2024, the CPA exam underwent significant changes with the introduction of the CPA Evolution. The exam now consists of Core and Discipline sections, providing candidates with a more focused and specialized approach to testing. Understanding these changes and the structure of the exam is crucial for effective preparation and success.
FAQ
In 2024, the CPA exam was restructured into the Core and Discipline sections. The Core sections are Auditing & Attestation (AUD), Financial Accounting & Reporting (FAR), and Taxation and Regulation (REG). Candidates who did not pass the Business Environment and Concepts (BEC) section must now choose from Business Analysis & Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP).
Each section of the CPA Exam lasts four hours and includes multiple-choice questions (MCQs) and task-based simulations (TBSs).
The AUD section focuses on audit and attestation engagements. FAR covers financial accounting and reporting standards for both for-profit and not-for-profit entities. REG assesses knowledge of U.S. ethics, business law, and federal tax compliance for individuals and entities.
BAR includes data analytics, financial risk management, and advanced accounting topics. ISC focuses on business processes, information systems, and IT audits. TCP covers advanced tax compliance for individuals and entities, personal financial planning, and entity tax planning.
Task-based simulations test the practical application of knowledge. Getting a CPA review course that offers practice simulations can help familiarize you with the exam format and improve your ability to apply concepts in real-world scenarios.
