If you ask past CPA exam candidates which part of the CPA exam is the most difficult, you’re likely to get a range of different answers. In reality, the section of the exam that you find the most challenging depends on your personal strengths, weaknesses, experience, and prior education. Candidates usually want to know which are the most difficult sections so that they can plan the order in which they write the exam. Some candidates might want to get the hardest part out of the way, while others may prefer to save it for last.
In this article we offer a detailed description of what each section of the exam entails. Hopefully this will give you a better idea of what to expect and help you to make informed decisions about when to apply for each section.
What Types of Questions are in the CPA Examinations?
As you probably know, the CPA exam contains 4 sections: AUD, FAR, BEC, and REG. Each section effectively acts like a stand-alone exam. They are scheduled separately and written over their own 4 hour exam periods. Each of the 4 sections contain a unique combination of multiple choice questions, task-based simulations, and written communication tasks.
1. Multiple-Choice Questions (MCQ):
All 4 sections of the CPA exam contain multiple choice questions. These questions are based on the topics covered in the Content Specification Outlines (CSOs). Each exam section has three MCQ testlets (groups of questions).
2. Task-Based Simulations (TBS):
Task-based simulations are designed to test the practical application of your knowledge and skills by immersing you in real-life work situations. The TBS are part of all 4 of the CPA exam sections, and feature just after the MCQ testlets in the exams.
3. Written Communications Tasks:
The written communications tasks are only found in the Business Environment and Concepts (BEC) part of the exam. These questions ask that you respond in a written format (like a memo or a letter) to a given scenario. Candidates will be given access to word processing tools to present your answer.
What are the 4 Sections of the CPA Examination?
Now that you know what types of questions are asked in the CPA exam, let’s get into the 4 exam sections.
Out of the 4 sections, FAR has a reputation for being the most difficult. It also has the lowest pass rate. BEC, on the other hand, is usually considered the easiest section. It has the highest pass rate. The remaining sections, AUD and REG, are thought to be a medium level of difficulty.
At the end of the day, all 4 sections of the CPA exam are going to be challenging. This is largely because the CPA examination is designed to test candidates at an advanced level of skill. The four levels of skill tested in the CPA exam include:
- Remembering and understanding
Each section relies more or less heavily on testing different skill levels. For example, FAR and BEC place more emphasis on application. AUD, on the other hand, tests remembering and understanding more than other sections. AUD is also the only section that tests your evaluation skills. Finally, REG tests remembering, application, understanding, analysis skills evenly.
As you already know, the section that others find the most challenging may be the part of the exam you find the easiest. It all depends on your unique skills, experience, and what style of questions you prefer. Below, we’ve given you a more detailed explanation of each of the 4 parts of the exam. Hopefully this will give you a better idea of what to expect.
Auditing & Attestation (AUD)
Pass rate (2021): 47.98%
This section covers the entire audit process. It also includes questions regarding compilations, reviews, attestation engagements, and the AICPA Code of Professional Conduct. If you have experience working in auditing, or have recently taken a course in auditing, you might want to take this section while the information is fresh in your head. Most people like to take this section after the FAR part of the exam is complete, but there is no rule. Choose an order that makes most sense for you.
- AUD is a 4-hour examination
- This section consists of 50% MCQs and 50% TBSs
- This amounts to 72 MCQs and 8 TBSs
A more detailed look at what goes into the AUD section of the exam:
- 15-25% – Ethics, Professional Responsibilities and General Principles
- 20-30% – Assessing Risk and Developing a Planned Responses
- 30-40% – Performing Further Procedures and Obtaining Evidences
- 15-25% – Forming Conclusions and Reporting
Financial Accounting & Reporting (FAR)
Pass rate (2021): 44.54%
One of the reasons why FAR is sometimes considered the hardest part of the CPA exam is that it tests the highest volume of information. However, a lot of the content it encompasses is also tested by other sections of the exam. This is why some people like to take FAR first – by studying all that information they will be preparing for the AUD, BEC, and REG in advance. If you are a CPA exam candidate who has done some financial courses prior to qualifying for the exam, you will be well prepared for FAR. In this case, it may suit you to take FAR first, while the information is still fresh in your mind. On the other hand, some choose to save it for last since it can be the most challenging.
CPA exam veterans have suggested that candidates prepare by focusing on key differences between financial statements prepared on a U.S GAAP vs IFRS. Taking courses in non-profit or government accounting could also give you an advantage in this section.
- FAR is a 4-hour examination
- The section consists of 50% MCQs and 50% TBSs
- This amounts to 66 MCQs and 8 TBSs
A more detailed look at what goes into the FAR section of the exam:
- 25-35% – Conceptual Framework, Standard-Setting and Financial Reporting
- 30-40% – Select Financial Statement Accounts
- 20-30% – Select Transactions
- 5-15% – State and Local Governments
Business Environment & Concepts (BEC)
Pass rate (2021): 61.94%
The BEC section of the exam is like a lucky packet. It contains a mixture of information from many of your core business classes (like managerial accounting, strategic management, information systems and technology, economics, etc). But because BEC tests such a broad variety of information, it can be a little trickier than it seems. Candidates tend to underestimate BEC because it is less dense than other sections. Make sure you’re well studied for this section so it doesn’t catch you off guard.
The BEC section also has a unique weighting, since it is the only part of the exam that contains written communications tasks (WCTs). The WCTs are not difficult, but it might be worthwhile brushing up on your writing skills. If you’re a decent writer, you can score well in this testlet.
- BEC is a 4-hour examination
- The section consists of 50% MCQs, 35% TBSs, and 15% WCTs
- This amounts to 62 MCQs, 4 TBSs, and 3 WCTs
A more detailed look at what goes into the BEC section of the exam:
- 17-27% – Corporate Governance
- 17-27% – Economic Concepts and Analysis
- 11-21% – Financial Management
- 15-25% – Information Technology
- 15-25% – Operations Management
Pass rate (2021): 59.88%
The REG section of the exam tests a combination of business law and federal taxation. There is also some emphasis on ethics and professional responsibilities. The business law portions of the exam cover content that you can find in most core business law curriculums. Most candidates find this section quite easy, especially compared to the taxation portion of the exam. For the taxation questions, you will be required to apply your knowledge to challenging questions and simulations. Conversely, you can get by relying on rote memorisation for the business law content.
- REG is a 4-hour examination
- This section consists of 50% MCQs and 50% TBSs
- This amounts to 76 MCQs and 8 TBSs
A more detailed look at what goes into the REG section of the exam:
- 10-20% – Ethics, Professional Responsibilities and Federal Tax Procedures
- 10-20% – Business Law
- 12-22% – Federal Taxation of Property Transactions
- 15-25% – Federal Taxation of Individuals
- 28-38% – Federal Taxation of Entities
In light of the new curriculum and exam models coming into effect in January 2024, AICPA and NASBA have provided an updated copy of their Uniform CPA Examination Blueprints here.