Tips on Preparing and Passing the CPA Erika Gomez, CPA, MBA

The Uniform Certified Public Accountant (CPA) Examination Developed by the AICPA with significant input and assistance by NASBA and state boards of accountancy. Designed to assess the knowledge and skills entry-level CPAs need to practice public accountancy.

CPA Licensure The CPA Exam is one of the “Three Es”  (Education, Examination and Experience), that is required for licensure as a CPA in the U.S. The successful completion of the Uniform CPA Exam is a requirement in all 55 jurisdictions. Education and Experience requirements may vary for each state or jurisdiction. Many jurisdictions also require an additional exam in ethics in order to obtain a license (sometimes referred to as the fourth “E”).

Education Conferral of a baccalaureate degree or higher, with:  150 semester units of education 24 semester units in accounting subjects 24 semester units in business-related subjects 20 semester units of accounting study (See tip sheet) https://www.dca.ca.gov/cba/applicants/tip_sheet.pdf 10 semester units of ethics study

Education Assessment Master of Accounting Master of Taxation Master of Law in Taxation If you completed one of these three master’s degrees you are deemed to have met the 20 semester units of accounting study. The CBA does not pre-approve any courses. Review the CBA's Tip Sheet for assistance in determining whether a particular course may qualify. https://www.dca.ca.gov/cba/applicants/self-assess-wrksheet.pdf

Graduate Degree The MSA program at CSUSB requires 48 quarter units. Business bachelor’s degrees require 180 quarter units. 180*2/3 = 120 48*2/3= 32 152 Units

Exam Details The CPA Exam is a 16-hour, computer-based test comprised of four sections: Auditing and Attestation (AUD) Business Environment and Concepts (BEC) – used to be 3 hours Financial Accounting and Reporting (FAR) Regulation (REG) – used to be 3 hours

CBA Exam Application https://www.cba.ca.gov/cbt_public/portal_url Create an online Application Mail Fees ($100) and application remittance form Transcripts mailed directly from school to the CBA CPA Exam section fees are paid directly to the National Association of State Boards of Accountancy (NASBA) after the CBA has approved your application.

Authorization to Test (ATT) Once application is approved, CPA Exam section(s) are selected using your online Client Account. At least one CPA Exam section must be selected within one-year from the date of application approval. Once NASBA processes the ATT, it will send you a Payment Coupon. Payment Coupon is valid for 90 days.

Notice to Schedule After NASBA receives your payment, you will receive your NTS (approximately 1 week). You will have nine months to take the exam sections for which you paid. The exams are currently $208.40 each.

What’s the point? Save your time and money! Understand this process. Do not select more sections than you intend to actually take within 9 months. For me it was six months For others, all sections needed to be taken at once and at least two needed to be passed to get credit at all. Accept that you will likely need to reapply at least once during this process (reapplication fee is $50)

Testing Windows The Uniform CPA Examination is available during specific periods called testing windows: There is no minimum number of sections that must be completed in a testing window. Sections may be taken in any order, and you do not have to pass one section prior to applying for another. However, you cannot take the same test more than once in a single testing window! Testing Windows January 1 - March 10 April 1 - June 10 July 1 - September 10 October 1 - December 10

Examination Content The AICPA publishes CPA Exam Blueprints that outline the content and skills tested on each section of the CPA Exam. AUD covers knowledge of generally accepted auditing standards and procedures and the skills needed to apply them in auditing and other attestation engagements. BEC assesses candidates’ knowledge of a CPA’s professional responsibilities and the legal implications of business transactions, particularly as they relate to accounting and auditing. REG evaluates knowledge of principles and procedures for federal income, estate, and gift taxation, managerial accounting, and accounting for governmental and not-for-profit organizations. FAR section appraises knowledge of generally accepted accounting principles for business enterprises, including financial accounting concepts and standards and their application in public accounting engagements.

Perceived Difficulty 1. FAR – Volume of content and complexity 2. REG – Volume of content 3. BEC – Variety of content (economics, IT) 4. AUD – Limited, basic content

Examination Administration The examination is administered at Prometric test centers. I took my exams at a test center in Rancho Cucamonga on Carnelian.

Exam Preparation Determine how you learn best (visual, audio, in person, self-study). Research the various programs available with your learning style in mind. Make the investment. Quality study programs will likely cost between $1,000 and $3,000. Find a study environment that works for you. Stick to a schedule.

My Study Materials BEC – Wiley CPAexcel Exam Review (500 page book) $100 REG – Yaeger (video, audio, study guide, Wiley CPAexcel book, question bank) $300 FAR – Roger (video, book, online question bank) $600 AUD – Yaeger (video, audio, study guide) $300 $1,300 spent on materials.

Study Hours The AICPA recommends that candidates spend between 300-400 hours to study for the entire exam CPA exam.

My Study Schedule Average of 2 hours/day, 4 or 5 days/week, for about 2 months leading up to an exam. Likely spent around 300 hours in total preparing for the comprehensive exam. Most time spent on FAR. Least time spent on AUD.

Study Tip Don’t focus on study hours, focus on content mastery. Stick to the schedule. Many times the materials you purchase will include a study schedule. You may have to decline attending various social and/or family gatherings.

Am I Ready? Gauging your knowledge. You do have the ability to postpone your test within the notice to schedule. 30 days or more – no fee 5-30 days in advance - $35 1-5 days in advance – $208.40 Less than 24 hours – not permitted

Exam Day Be prepared for anything. Be punctual. Eat a nutritious meal and get a good night’s rest. Don’t forget your identification or notice to schedule. Don’t stress.

Other Exam Information Exam scores are posted online. All four sections must be passed within 18 months. Exam scores range from 0 to 99. Minimum score to pass is 75. The exam is administered in blocks called testlets (5 on each exam). The exam is scored based on the difficulty of testlets received. Testlets received are based on performance on prior testlets. The first testlet received is always “medium” difficulty. https://www.aicpa.org/becomeacpa/cpaexam/psychometricsandscoring/scoringinformation/do wnloadabledocuments/how_the_cpa_exam_is_scored.pdf

Exam Support Get to know other people who are also going through the examination process. Draw on their experience. Find out information you otherwise may not have known. www.Another71.com

Experience General Attest Academia

General Accounting Experience Minimum of 12 months Providing any type of service or advice involving the use of accounting, attest, compilation, management advisory, financial advisory, tax, or consulting skills. General accounting experience must be be supervised and signed by an individual who holds a valid active license.

Attest Experience Minimum of 12 months of general accounting experience which includes a minimum of 500 hours of attest experience. Applicants submitting attest experience may be required to appear before the CBA Qualifications Committee to present audit work papers or other evidence substantiating that their experience meets the requirements of BPC section 5095.

Application for Licensure Application - This is entirely different than your examination application Fingerprints Experience Forms Ethics Exam - $150 Application Fee - $250

Ethics Exam 50 multiple-choice questions; no time limit. Three attempts to pass the exam with a grade of 90 percent or better (no more than five missed questions). All self-study and PETH exam questions are random. If you have to take the test more than once, you may receive new questions and in a different order. The exam must be completed within one year from the date of purchase. CalCPA notifies the California Board of Accountancy on a weekly basis of all successfully completed exam scores. Test results are valid for two years while all licensing requirements are completed.

Ethics Exam Tips Don’t take this lightly. Take your time. Take advantage of Control + F. Print the exam out and mark it up – make reference to where you find your answers.

CPE/Initial Licensing Fee $120 renewal fee due biennially (prorated for initial licensing fee) CPE: 80 hrs. biennially

Questions