Unfortunately, the state of the CPA exam has been somewhat turbulent over the last several months, with many proposed changes and alterations. Much of this stems from falling candidate numbers, with fewer applicants year after year. Whether a new generation of accountants values this certification aside, the fact is the CPA exam process needs to evolve.
However, this also means potential candidates might not fully recognize the path to licensure. And if you’re in that demographic, you need to make sure that you understand the specifics. Because if you don’t, then you might end up wasting a lot of money for no return.
So, if you’re somewhere along the way already or looking to start the path to the CPA exam, make sure you know what that entails. That way, you have a clear shot to your goals.
Key Facts About the CPA Exam
It’s difficult to prepare for a test when you don’t know much about it. So, before you sit for the licensure exam, you should know some things about the structure and what to expect.
Ultimately, the exam itself is broken up into four key sections. These include:
- Auditing and Attestation
- Financial Accounting and Reporting
- Taxation and Regulation
- A chosen discipline section
- Business Analysis and Reporting
- Information Systems and Control
- Tax Compliance and Planning
- Some jurisdictions also include an ethics section
While each of the first three sections are required for every sitting candidate, the final section is up to individual discretion. Furthermore, it’s worth noting that an ethics section will likely be included for many jurisdictions. However, others instead require candidates to complete the a CPA ethics course as a prerequisite for the exam.
Each section of the exam includes a multiple-choice section as well as task-based simulation.
The exam itself lasts a total of 16 hours, which naturally sounds overwhelming. However, candidates generally don’t take multiple sections during the same sitting. Instead, new NASBA rules as of 2024 have opened up a 30-month testing window, determinable by state. This means that from the time candidates receive their first passing score on a section, they have two and a half years to complete the other sections.
In order to pass the CPA exam, candidates must score a minimum of 75% on each individual section. And while you may apply to retake any portion of the CPA exam after failure, it cannot happen within the same testing window. Typically, these windows correspond to annual quarters.
How Much Does the Exam Cost?
Naturally, you might wonder how expensive the entire process will be – and we don’t have good news for you there. Every state sets its own prices for the CPA exam, so there’s no hard-and-fast answer to the question. However, on average, you can expect several different fees, including application, registration and section fees.
NASBA recommends a price around $344 for each section of the exam. So, when you add in an application fee of around $100-$200 and registration of $100-$400, it easily adds up.
In short, you can expect to spend somewhere in the neighborhood of $2,000+ for your CPA exam from start to finish.
Requirements for the CPA Exam
One current point of contention with the CPA exam as it’s generally stood regards the prerequisite amount of necessary education and experience. Although this varies by state, the typical rule followed is the “150-hour rule”. In short, this requires candidates to have completed 150 education hours, accomplishable by several paths.
- Undergraduate degree in accounting with a Master’s
- Undergraduate degree with a Master’s in accounting (or MBA with accounting focus)
- Integrated five-year professional accounting school or program that leads to a Master’s in accounting
First introduced in 1988, the 150-hour rule has largely been cited as the cause for the drop in candidates over the past several years. As a result, some jurisdictions have proposed additional paths to licensure, including a Bachelor’s degree, competency-based experience pathway, and 1 year of experience.
Beyond the educational requirements, individual states have various other prerequisites for potential candidates. For example, individuals must be at least 18 years old, though they can begin studying before that age.
U.S. citizens are able to schedule their test sections at any testing site. However, non-citizens may have to complete sections at specific centers and complete additional requirements beforehand. Most states also require candidates to have a social security number, though several will allow testing without it.
Additionally, most states will require a candidate to possess an accounting degree, whether undergraduate or Master’s. When it comes to work experience, some states might not require it for the actual exam. However, most require it in order to apply for a license following successful completion of the testing phase.
How to Schedule Your Exam
Once you’ve met the prerequisites, you can apply to sit for a section of the CPA exam. In order to do so, you’ll need to visit your specific state’s board of accountancy website. If your application is accepted, you will receive a Notice to Schedule. From that point, you will have six months to schedule your first exam. Then, after successful completion, you will be able to schedule the next section. In the case of a failure, you must wait 24-hours, and then you may reschedule the failed section.
Once you’ve passed every section successfully, you will be able to submit an application for your CPA license.
Next Steps
Of course, the fun doesn’t end after you’ve completed the CPA exam. Because in order to keep your license, you must complete regular continuing education. Much like the exam itself, the actual requirements differ by state. So, make sure you know your jurisdiction’s specific expectations with our guide to CPA CPE requirements by state.
Then, once you’ve figured out your options based on location, check back with us for online continuing education courses. We’ll even give you a free course to get started! We cover dozens of different accounting topics in partnership with industry experts. So, make sure you check out our full catalog to take advantage of their knowledge today!
Article written by Braden Norwood
Last updated October 10, 2024