How Hard Is The CPA Exam?

Is The CPA Exam Hard?

Short answer: the CPA exam is extremely hard. Sorry, I don’t want to hide the ball or disillusion you.

The CPA exam tests concepts and working knowledge in a wide variety of fields, and requires quite a large undertaking of planning, studying, and preparing. Each of the four main exam portions requires demonstrated knowledge of a wide range of accounting topics.

What Makes The CPA Exam Difficult?

There are several factors that make the CPA exam one of the most challenging credentialing examinations. Most test takers have identified the vast amount of information covered on the exam to be the primary reason for its difficulty, which in turn requires a substantial amount of study and preparation.

Each section uses a variety of question types, it is time-limited, and it utilizes multi-stage difficulties.

Question Types

All four test sections utilize multiple-choice questions and task-based simulations. In other words, not only is there a lot of information tested, but it’s also tested in different formats.

The multiple-choice questions are also tricky. Often, there is more than one correct answer, and you are tasked with selecting only the best of the provided choices. The task-based simulations questions are in their own portions of the test, called “testlets.”

Time Limitations

Each of the four sections has a time limit of 4 hours, so by the time you pass the CPA, you will have taken at least 16 hours of tests. You are given an 18-month window, starting from the date you pass your first section, in which you are able to take the remaining three sections of the test in any order you prefer.

Many applicants choose to take the perceived most difficult exam first, and then the others. There are significant registration fees involved which must be paid again if an exam portion is taken and failed.

A common testing track is to begin with FAR, then do AUD and REG (in any order), followed by either Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP) last. This will allow a more natural progression that builds on knowledge previously attained.

Hardest Section of The CPA Exam – AUD, FAR, or REG?

As mentioned, the CPA is comprised of four sections broken down into testlets. These sections test your knowledge of Auditing and Attestation (AUD), Financial Auditing and Reporting (FAR), Regulation (REG), and either Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP).

Most CPA students have said the FAR section was the most difficult. We’ll take a look at each section and what it tests on, so you can be better prepared overall.

• AUD is the section that will cover all auditing and assurance public accounting services. Here, your knowledge of the professional code of conduct (AICPA), audit processes, reviews, compilations, and attestations.
• FAR is often considered the most difficult section. Many people feel this is purely due to the volume of information covered. This section covers the entirety of financial accounting and reporting. You will be tested on the FASB framework, statement preparation, US GAAP rules, and IFRS rules.
• REG is the only section of the CPA exam that does not deal explicitly with accounting content. The REG section focuses on the taxation of businesses and individuals, business law, and ethics.
• BAR (optional) evaluates a candidate’s ability to analyze financial statements, interpret data, and provide insights based on financial reporting frameworks. It tests competencies in financial planning, analysis, and reporting, including the application of accounting standards and regulatory guidelines.
• ISC (optional) assesses a candidate’s understanding of information technology, systems controls, and the safeguarding of data. It tests knowledge in areas such as IT governance, risk management, security, and the implementation of internal controls to ensure the integrity and reliability of financial information.
• TCP (optional) evaluates a candidate’s knowledge of tax regulations and their ability to apply tax laws in compliance and planning scenarios. It tests competencies in areas such as individual and corporate taxation, tax planning strategies, and ethical considerations in tax practice.

What Is The Hardest Part of The CPA Exam?

The numbers do not lie, the hardest section of the CPA exam is most definitely FAR. With a 2022 Q4 pass rate of under 45%, it is a brutal section. When this is compared to the Q4 pass rate for BEC, which was a healthy 60%, it is clear that people are less successful with FAR.

One last factor is of course the price. You must pay for, and have been issued, an NTS for each section, and those can take several weeks to months to arrive. If you fail a section, you must wait to retake until you have another NTS. This cost and scheduling can often be a large hurdle to finishing within the 18-month timeframe you are given.