Uniform Certified Public Accountant Examination

Uniform Certified Public Accountant Examination

The Uniform Certified Public Accountant Examination (Uniform CPA Exam) is the examination administered to people who wish to become Certified Public Accountants in the United States.

The Uniform CPA Exam is developed and maintained by the American Institute of Certified Public Accountants (AICPA), and is administered by the National Association of State Boards of Accountancy (NASBA). The CPA exam is used by the regulatory bodies of all fifty states plus the District of Columbia, Guam, Puerto Rico, the U.S. Virgin Islands and the Northern Mariana Islands.



Until the 1990s, the Uniform CPA Exam was 19½ hours in duration, administered over two and one-half days. It consisted of four subject areas (sections) which were tested in five sittings: Auditing (3.5 hours); Business Law (3.5 hours); Accounting Theory (3.5 hours); and Accounting Practice (Part I & Part II; 4.5 hours each). Although Accounting Practice Parts I and II were given in separate sittings, the two scores were combined for grading purposes. The exam was administered twice per year: on the first consecutive Wednesday, Thursday and Friday in May and November of each year. Test takers were allowed to use only paper and pencil (no electronic calculators or computers of any kind).

In 1994, the exam was restructured into a four-section, two-day exam. The subject matter was reorganized and redundant material was eliminated, primarily between Accounting Theory and Accounting Practice (Parts I and II). In addition, innovative machine-scorable test questions were incorporated to better assess the skills needed by CPAs to protect the public. For the first time, proprietary electronic calculators were provided to CPA candidates for the two new accounting sections. The four new sections were:

Until 1996, completely new versions of the CPA Exam were prepared every six months, and after each administration all questions and the keyed responses (correct answers) were published and available for purchase. Beginning with the May 1996 administration, almost all exam material was kept secure so that many high-quality questions could be reused. Though this is common practice in the world of large-scale testing, it was a policy decision that was momentous at the time, and made only after extensive comments were elicited from all key stakeholders, such as the 54 Boards of Accountancy, members of the CPA profession, accounting educators, CPA candidates, and testing professionals. By deciding to release only a small portion of each exam--to help candidates prepare for the examination experience--high quality exam material could be reused in the future. It also became possible for the first time to use statistical techniques for test equating and to use criterion-referenced passing scores.

Computer-Based Examination

Since April 5, 2004, the exam has been administered only by computer in secure testing centers. In addition to the knowledge CPAs require, the CPA Exam assesses important skills CPAs are expected to have such as the ability to use authoritative database software and electronic applications such as word processing and spreadsheets. Professional writing skills are also assessed. In July 2009, the one millionth administration of the computerized CPA exam occurred.

Currently, the testing year is divided into four "windows". During each three-month window the candidates may take one or more sections, but may only take each section once.[1]

Credit earned for passing a section is valid for 18 months. If a CPA candidate fails to pass all four sections within an 18-month period, credit is lost for any section passed more than 18 months earlier and must be retaken.

Exam Content

The sections have been reorganized as follows:

  • Auditing and Attestation (4.0 hours): (AUD) – This section covers knowledge of planning the engagement, internal controls, obtaining and documenting information, reviewing engagements and evaluating information, and preparing communications.
  • Financial Accounting and Reporting (4.0 hours): (FAR) – This section covers knowledge of concepts and standards for financial statements, typical items in financial statements, specific types of transactions and events, accounting and reporting for governmental agencies, and accounting and reporting for non-governmental and not-for-profit organizations.
  • Regulation (3.0 hours): (REG) – This section covers knowledge of ethics and professional responsibility, business law, Federal tax procedures and accounting issues, Federal taxation of property transactions, Federal taxation – individuals, and Federal taxation – entities.
  • Business Environment and Concepts (3.0 hours): (BEC) – This section covers knowledge of business structures, economic concepts, financial management, information technology, and planning and measurement.

The Uniform CPA Exam tests primarily understanding and the ability to apply authoritative literature—such as auditing and accounting standards, the Uniform Commercial Code, and the Internal Revenue Code—that are universally adopted by all US jurisdictions or are federal in nature. Every effort is made to avoid asking about subject matter that may have different correct answers in different jurisdictions.[2]

Here is a summary of the topics which are tested in each section of the examination:[3]

Auditing and attestation

  • 12-16% engagement acceptance and planning
  • 16-20% entity and internal control
  • 16-20% procedures and evidence
  • 16-20% reports
  • 12-16% accounting and review services
  • 16-20% professional responsibilities

Financial accounting and reporting

  • 17-23% concepts
  • 27-33% accounts and disclosures
  • 27-33% transactions
  • 8-12% governmental
  • 8-12% not-for-profits


  • 15-19% ethical and legal responsibilities
  • 17-21% business law
  • 11-15% federal tax process
  • 12-16% gain and loss taxation
  • 13-19% individual tax
  • 18-24% taxation of entities

Business environment and concepts

  • 16-20% corporate governance
  • 16-20% economics
  • 19-23% finance
  • 15-19% IT
  • 10-14% strategic planning
  • 12-16% operations management

Testing Method

Multiple-choice questions represent 60% of the total score for three of the four exam sections, with the exception of Business Environment and Concepts (BEC), while the other 40% consists of simulations. Accounting knowledge is tested in simulations through a variety of tasks, some of which require searching databases, completing written communication exercises, and working with spreadsheets and forms. The skills that simulations are intended to measure are: analysis, judgment, communication, and research.

As of 2011, BEC is the only section that contains written communication task simulations. Prior to 2011, written communication tasks were contained in all four sections of the exam.

Written communication responses are scored on the basis of three criteria:

  • Organization – structure, ordering of ideas, linking of ideas one to another.
  • Development – presentation of supporting evidence.
  • Expression – use of standard business English.

Responses that do not address the assigned topic are not scored.

In Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Regulation (REG), multiple-choice testlets account for 60%, and simulations (case studies) 40% of the score. In Business Environment and Concepts (BEC), multiple-choice questions account for 85% of the score and three written communication task simulations account for 15% of the score (which changed in 2011).

During the examination, candidates may take a break after completing a "testlet" (either a set of multiple choice questions or a simulation). Once a testlet is completed, however, the candidate is not allowed to return to it, so it is not possible to use the "break time" to improve one's score by looking up answers. The clock continues to run during breaks.

The "bank" of questions is much larger than the set presented to each candidate. Different candidates (even taking the examination at the same time) may therefore receive a completely different examination. This variance is accounted for in the scoring.

Adaptive testing

The Uniform CPA exam is administered using a modified adaptive testing model. Each CPA candidate begins the exam with a multiple-choice item testlet of moderate difficulty, after which an ability estimate based on item response theory is made. If the candidate's ability estimate is sufficiently high, the second testlet administered is more difficult. If the estimate fails to meet that threshold, another moderately difficult testlet is administered. After completing the second testlet, a new ability estimate is computed. If that estimate exceeds a predetermined threshold, a difficult testlet is administered as the third testlet. If not, a moderately difficult testlet is administered. On sections that contain simulations, these are administered after the third multiple-choice testlets. The simulations are not administered adaptively. That is, there is no relationship between a candidate's ability estimate and the simulations administered to the candidate.

A candidate is free to review and change any answers within a testlet or simulation until the candidate submits the work as completed. From that point on, the candidate may not review or change answers in a completed testlet or simulation.

The AICPA takes the position that adaptive testing allows the ability of a candidate to be assessed with fewer questions than would be required for a static, or non-adaptive, testing methodology.


The score represents the candidate's overall performance on the identified examination section. Scores are reported on a numeric scale of 0 to 99, with 75 as the passing score. The scale does not represent "percent correct." A score of 75 indicates examination performance that hypothetically reflects a level of knowledge and skill required for the protection of the public.

Per NASBA's website, completed tests are sent to the AICPA for scoring. The Examination Section ID only is used for identification. When the candidates performance has been scored NASBA receives the scores for processing. The scores are subsequently forwarded to Boards of Accountancy for their approval and release. Each Board of Accountancy maintains its own process and schedule of releasing the scores to candidates.

Eligibility to Sit for the Uniform CPA Exam

In order to sit for the Uniform CPA Exam, a person must be declared eligible to do so by one of the 55 U.S. State Boards of Accountancy.

Requirements of state boards vary, but usually consist of a U.S. bachelors degree with a concentration in accounting (not necessarily an accounting degree) plus an extra year's study (which can be either at undergraduate or graduate level). The requirement for 5 years full time equivalent study is known as the "150 hour rule" and has been adopted by the majority of state boards. An important distinction should be made between requirements to sit for the exam, and requirements for certification. In some states, such as Minnesota, the "150-hour rule" only applies to certification; anyone with a bachelors degree (from a qualifying institution) in Accounting may sit for the exam. However, certification requires 150 credit hours.

NASBA 2008 Update: 120 Versus 150-Credit Hour Requirement to Sit for the CPA Examination There are now only two states that do not have laws that will require 150 credits for CPA licensure; however, an increasing number allow CPA candidates to take the CPA Exam after earning a bachelors degree (120 credit hours). NASBA has issued a draft discussion paper outlining the history of, and issues surrounding, the 150-hour education requirement, as well as presenting the arguments, pro and con, for requiring either 120 or 150 credit hours before allowing CPA candidates to take the Exam.

The following information may be of historical interest, but as of December 2008 it is out of date. Noteworthy exceptions (before 2008) to the "150 hour rule" include:

As of October 1, 2007, CT may now require only 120 hours to sit. However 150 hrs are still required for the certificate.

  • As of May 14, 2009, Virginia requires only 120 hours to sit. However 150 hours are still required for the certificate.

IL state allowed in Progress Course Work: Candidates will receive "provisional" approval to take the CPA exam while completing educational requirements. Candidates will have 120 days from the time they take the exam to submit final transcripts to clear their "provisional status."

Examination Process

The steps involved in sitting for the Uniform CPA Examination are as follows:

First time applicants

  • Apply to one of the 55 state boards to determine eligibility. Some state boards delegate this to NASBA. It is not necessary to apply to sit all four sections of the Uniform CPA Exam (at least one section must be applied for).
  • State Board notifies NASBA of eligible candidate
  • NASBA places candidate on the National Candidate Database and issues a 'Notice to Schedule (NTS). The validity of the NTS is normally 6 months, however a few states issue NTS with a validity of 3, 9, 12 or 18 months.
  • Candidate contacts Prometric to arrange to sit the examination section within the validity of the NTS. This can be done through the Prometric website.
  • On the day of the examination, the Prometric test center receives electronic data from the American Institute of Certified Public Accountants to allow the exam to be set.
  • The exam responses of the candidate are sent back to AICPA, identified only by a section ID number which NASBA has provided to the candidate.
  • AICPA scores the examination and sends the result to NASBA
  • NASBA matches up the score (from the section ID) to the candidate details on the National Candidate Database
  • NASBA forwards the score to the candidate's State Board (some state boards allow NASBA to report the scores direct to the candidate)
  • State Board forwards the scores to candidates, after conducting its own review.

Re-Examination Applicants

A candidate who has previously taken a section of the Uniform CPA Exam is a re-examination applicant. The registration process for re-examination candidates with state boards is normally simpler than that for first-time candidates, and does not usually require new proof of ID or qualifications. Some state boards allow online registration for re-examination candidates. Additionally the candidate's record is already in the National Candidate Database, which allows quicker processing by NASBA. Otherwise the process is similar.


Fees to sit for the Uniform CPA Exam vary by state; however, for first time applicants sitting for all four sections, a fee between USD $550 and USD $850 is typical. The equivalent re-examination fee is normally about USD $70 less.

Fingerprint Collection & Sharing Controversy

AICPA/NASBA now mandates that exam candidates submit to a fingerprinting prior to each exam "for identification purposes." According to published AICPA and NASBA reports, all fingerprints collected are immediately transmitted over the internet to the foreign owned data-mining firm ChoicePoint/ReedElsevier (Identico Systems) for storage[2]. ChoicePoint combines personal data sourced from multiple public and private databases for sale to the US Dept of Homeland Security and to the private sector, and maintains more than 17 billion records of individuals and businesses, which it sells to an estimated 100,000 clients ChoicePoint.

Under the fingerprinting program, a US passport, even when combined with a driver's license is considered "insufficient for identification" causing critics to assert that this clearly more about biometric data collection than exam security. Industry insiders (Accounting Today, WebCPA) report that the fingerprint collection program has sparked significant opposition due to the risks to candidates' privacy and possible identity theft (WebCPA Journal, "CPA Exam Fingerprinting Provokes Controversy" [3]. Mary-Jo Krancher, Editor-in-Chief of the influential NY CPA Society (CPA Journal) has also published and editorial critical of the fingerprinting program (October 2008, p.82) [4]

ChoicePoint has had significant privacy and legal violations in its recent past, including being assessed the largest fine in the history of the US Federal Trade Commission for "making false and misleading statements about its privacy policies" and for "its security and record-handling procedures violating consumers’ privacy rights and federal laws." [5] A similar exam fingerprinting-as-ID practice has been ruled to be illegal under Canadian privacy law (PIPEDA) by the Office of the Privacy Commissioner of Canada. [6]

Score Reporting Timescale

The timescale for score reporting depends on:

  • when AICPA forward results to NASBA
  • NASBA processing time
  • state board processing time (unless the state board delegates this to NASBA)

As of July 2006, scores of some applicants who sit for the exam in the first month of a testing window are reported by AICPA sooner, usually in the third week of the second month of that window. For example, some scores of persons who sat for the Uniform CPA Exam in April 2006 were reported in the third week of May 2006. The remaining scores from April 2006, plus the scores from May 2006 attendees, were reported in the last two weeks of June 2006.

Candidates who do not receive a score by the end of the first month after the testing window in which they sat for the exam are advised to contact their state board. For example, all scores of candidates from the April/May 2006 test window should be reported by 30 June 2006. It is however, unusual for a result to be received so late.

Failed Sections

Where a candidate fails a section, it may be re-done without any penalty other than a re-examination fee and the risk of credits for other sections expiring under the "18 month rule". Re-sitting for a failed section in the same testing window is not permitted.

Rescoring and Appeals

A candidate who fails a section may request that the exam be rescored. As of July 2006, the fee for a rescore is USD150 for the Business Environment and Concepts section (BEC) and USD200 for the other sections. Application for a re-score must be made by a particular deadline, usually around the end of the first month after the testing window in which the examination was taken. For example, for the April/June test window, an application for a rescore must be made before the end of July.

Some but not all state boards allow a failed candidate to file a score appeal where the candidate can review the examination section and challenge the response. This involves paying a fee of USD500 and traveling to the NASBA offices in Nashville, TN. Under secure conditions, the examination can be reviewed and specific questions can be challenged for a fee of USD100 each. In addition, no material is allowed to be brought in as reference. The deadline for filing an appeal is the same as that for a rescore.

Results of either process take about 8 weeks and are sent by NASBA to the candidate's state board of accountancy. It is unusual for either rescores or appeals to result in a changed score for the candidate. Filing a rescore or appeal application does not prevent the candidate from applying to retake the examination.

Changes to the Exam as of January 1, 2011

Significant changes will be made to the Uniform Certified Public Accounting Exam as of January 1, 2011. These changes will affect the content of the exam, the exam structure, the time allocations applied to each section of the exam, and the scoring and weighting processes.


The following content will be removed from the current CPA Exam[5]:

  1. The testing of written communication in the Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Regulation (REG) sections of the exam.
  2. 18 multiple choice questions from the Business Environment and Concepts (BEC) and REG sections.
  3. Some IT-based testing content

The following content will be added to the current CPA Exam:

  1. The testing of written communication in the BEC section of the exam
  2. Project-management-based content
  3. Content based on the International Financial Reporting Standards (IFRS)
The content of the exam that revolves around IFRS is very important to note because of the ongoing debates as to whether or not the United States should adopt the international standards, or if it should continue to follow the Generally Accepted Accounting Principles (GAAP) being practiced in the United States. IFRS provides fewer reported details than U.S. GAAP, especially in its practice of revenue recognition. Some major differences between IFRS and GAAP are:
  1. In regards to inventory, U.S. GAAP permits First-In, First-Out, or FIFO (a method in which the Cost of Goods Sold is recorded at the price of the inventory purchased first), and also Last-In, First-Out, or LIFO (a method in which the Cost of Goods Sold is recorded at the price of the most recently purchased inventory).[6] IFRS does not permit LIFO.
  2. In regard to impairment write-downs, which reduce overstated book values to fair value[7], GAAP permits a two-step write-down, while IFRS employs a single step write-down. This causes write-downs to occur more frequently in IFRS.
  3. Classification of debt also varies between the international and U.S. standards.[8]
In addition to these changes, long simulations in the Auditing and Attestation, Financial Accounting and Reporting, and Regulation sections of the

exam will be replaced with shorter “Task-Based Simulations” (TBS). Task-Based Simulations normally contain 6 or 7 tasks, one of which is usually is research problem.

Exam Structure

The structure of the new exam distributed in 2011 will be as follows[9]

  1. Auditing and Attestation
a. 3 Multiple Choice Question (MCQ) testlets (30 questions each)
b. 7 short task-based simulations, including one research question
  1. Business Environment and Concepts
a. 3 MCQ testlets (24 questions each)
b. 3 written communication tasks based on current topics
  1. Financial Accounting and Reporting
a. MCQ testlets (30 questions each)
b. 7 task-based simulations, including one research question
  1. Regulation
a. 3 MCQ testlets (24 questions each)
b. 6 task-based simulations, including one research question

Time Allocations

The total hours allowed for the exam will remain at 14. However, the times associated with each section have been altered, and will be given as follows:

  • Auditing and Attestation: 4 hours (previously 4.5 hours)
  • Financial Accounting and Reporting: 4 hours
  • Regulation: 3 hours
  • Business Environment and Concepts: 3 hours (previously 2.5 hours)

Scoring & Weighting

The following is the approved scoring and weighting system of the 2011 CPA exam[10]

  1. Auditing and Attestation
a. Multiple Choice Questions - 60%
b. Simulations - 40%
  1. Business Environment and Concepts
a. Multiple Choice Questions - 85%
b. Written Communication - 15%
  1. Financial Accounting and Reporting
a. Multiple Choice Questions - 60%
b. Simulations - 40%
  1. Regulation
a. Multiple Choice Questions - 60%
b. Simulations - 40%

These changes will take place on January 1, 2011 and will affect those professionals taking the CPA exam from there forward[11].


The Uniform CPA Exam is a confidential examination. All persons involved with the Uniform CPA Exam, including candidates, must sign a confidentiality agreement not to disclose the contents of specific questions asked.

International Qualification Examination (IQEX)

Certain overseas qualified accountants may sit for the International Qualification Examination (IQEX) is an alternative to the Uniform CPA Exam. As of July 2006 this eligibility extends to most Canadian, Irish and Australian Chartered Accountants together with Australian CPAs and the Instituto Mexicano De Contadores Publicos (Mexican Institute of Public Accountants).

Non-U.S. candidates

There is no specific bar to non-U.S. candidates sitting for the Uniform CPA Examination, however:

  • It is now possible to sit for the CPA outside the USA but only in select country locations which currently include Japan, United Arab Emirates, Lebanon and Kuwait.
  • Most states will accept non-U.S. education credentials, however they must normally be evaluated by a member of the National Association of Credential Evaluators. Some states prefer specific evaluators, such as Foreign Academic Credential Services or World Education Services, while the Illinois State Board of Accountancy prefers to conduct credential evaluations itself.
  • Approximately one-third of the state boards require a candidate for the Uniform CPA Exam to be living or working in that state. However, the majority have no residence requirement.
  • A few U.S. states (such as the Alabama State Board of Public Accountancy) require the candidate to be a U.S. citizen


  1. ^ By contrast, each state formerly imposed varying requirements on whether a candidate was required to sit for the entire exam. For example, in the 1970s and early 1980s, Louisiana required that first-time candidates sit for all four examination sections. Under the Louisiana rules, the candidate was required to pass at least two sections (with a score of 75 or above) while scoring no less than 50 on any section (the Accounting Practice score was derived by averaging the scores on parts I and II). The rule was later changed to count Accounting Practice I and II as two separate scores for this purpose. Thus, a first time Louisiana candidate who scored a 75 or above on each of the "Auditing," Theory," and "Law" sections of the exam but who scored a 49 or less on "Practice" would have received no credit, and would have been required to re-take the entire exam.
  2. ^ Occasionally, questions may be asked that reflect the need for CPAs to understand that certain laws and authoritative pronouncements, while not federal in nature, are consistent across all US jurisdictions. Also, though most jurisdictions follow English common law, a few (e.g., Louisiana) have legal systems based primarily on French law. As a result, CPA candidates are warned that in some cases where answers may differ across jurisdictions, the majority rule will apply. In fact, such questions rarely occur, except when the purpose of the question is to assess whether candidates know the areas of law that may not be universal. See generally Uniform CPA Examination: Examination Content Specifications, American Inst. of Certified Public Accountants, p. 11-12 (orig. issued June 14, 2002; references updated Oct. 19, 2005) at [1]
  3. ^ http://www.ais-cpa.com/dates.html
  4. ^ As of July 2006, the "eligible jurisdictions" for Chartered Accountants seeking to sit for the Uniform CPA Exam as a Colorado candidate are: Australia *, Bangladesh, Bermuda *, Canada *, England & Wales, India, Ireland *, Pakistan, Scotland, South Africa, Sri Lanka, Zimbabwe. Hong Kong Certified Public Accountants are treated as "Chartered Accountants" for the purpose of this regulation and are also eligible. Those annotated with * may also be eligible for the International Qualification Examination. Details
  5. ^ http://www.financialnewsline.com/finance/changes-to-the-cpa-exam-in-january-2011
  6. ^ http://accountinginfo.com/study/inventory/inventory-121.htm
  7. ^ http://www.finance-lib.com/financial-term-impairment-loss.html
  8. ^ http://www.ifrs.com/ifrs_faqs.html#q10
  9. ^ http://www.financialnewsline.com/finance/changes-to-the-cpa-exam-in-january-2011
  10. ^ http://www.financialnewsline.com/finance/changes-to-the-cpa-exam-in-january-2011
  11. ^ http://www.aicpa.org/BecomeACPA/CPAExam/Pages/CPAExam.aspx

See also

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