Written by Joe Hoyle, based on 27 years of experience in preparing candidates for success on the CPA Exam.

Question from candidate: How can I obtain information about the types of topics that are covered on each of these four parts of the CPA Exam?

Joe: Official information about the coverage can be found by going to www.cpa-exam.org and then clicking on "Learning Resources" and then on "How to Prepare." A list of topics will appear including one titled "Uniform CPA Exam Content Specification Outlines." This provides a very general idea of the coverage although it is not as detailed as you might like. Do note that these outlines will likely change a bit over the next few years as the exam continues to evolve.

One way to think about the coverage is to link it to the coverage you saw in college. Not surprisingly, Auditing and Attestation covers the material usually found in Auditing classes. The topics in Financial Accounting and Reporting come from Intermediate Accounting, Advanced Accounting, and Governmental and Not-for-Profit Accounting. Regulation is divided between taxation (50-70 percent) and business law and ethics (35-45 percent). The final part of the CPA Exam is Business Environment and Concepts which covers an assortment of subject matter:

• business structures which are usually covered in business law classes (17-23 percent),
• economic concepts from a basic-level economics class (8-12 percent),
• financial management from an introduction to finance course (17-23 percent),
• information technology from an accounting or management information systems course (22-28 percent), and
• planning and measurement from a cost or managerial accounting course (22-28 percent).

Q: I have heard that the CPA Exam is primarily made up of multiple-choice questions. Is that true?

Joe: All of the parts except BEC are made up of three testlets of multiple-choice questions followed by two simulations. Although this may change in the future, BEC only has three testlets of multiple-choice questions and no simulations.

Q: What is a testlet of multiple-choice questions?

Joe: A testlet is an entire group of multiple-choice questions that must be answered and submitted before the candidate can proceed to the next testlet or simulation. Each exam starts with Testlet One which must be completed and submitted before beginning Testlet Two.

Q: How many questions are in each testlet?

Joe: For all of the parts except Regulation, there are 30 multiple-choice questions in each testlet. Regulation only has 24 multiple-choice questions in each testlet. Because there are always three testlets, all of the parts except Regulation have a total of 90 multiple-choice questions. Regulation only has 72 multiple-choice questions.

Q: Are all of the multiple-choice questions used in determining the candidate’s final grade?

Joe: No, when there are 30 questions in a testlet, then five of them are only being pretested to check their validity and are not graded. In Regulation, where only 24 multiple-choice questions are provided in each testlet, four of them are for pretesting purposes. Unfortunately, candidates cannot tell which questions count and which questions are being pretested so energy and time must be invested on all.

Q: Except in BEC, after finishing all three testlets, the candidate receives one simulation. After it is submitted, a second simulation is received. What does a simulation look like?

Joe: A simulation is a type of mini-case study where a paragraph or two of basic information is provided and then several different types of questions are asked about various aspects of that information. As part of these questions, one research question is included as well as one written communications question.

Q: I fully understand the format of a multiple-choice question but how do I get more information on simulations, especially on the research question and the written communications question?

Joe: Information is readily available to help you envision the types of questions you will face. Go to www.cpa-exam.org and click on "Tutorial and Sample Tests" to see examples of exam questions.

For information on the research question found in the simulations, go to www.cpa-exam.org and click on "Learning Resources" and then on "How to Prepare." Finally, click on "Using the Authoritative Literature Database." Read that information carefully to understand how the research question is to be answered. If you have ever done an Internet search, you will probably find this portion of the exam to be rather straightforward. However, it is a good idea to make sure you know how to identify the answer you have found. Also notice at this site that after you qualify to take the exam, you can obtain a free six-month subscription to use the authoritative literature for practice purposes. That is not a bad idea.

For information on the written communications question, follow the same path at www.cpa-exam.org and click, once again, on "How to Prepare." Another one of the topics listed there is "Written Communications Skills." This document will provide you with an overview of what they are looking for on this part of the exam. They basically want to see that you can write a memo, letter, footnote, or the like using standard English.

Q: What is a passing grade on the CPA Exam?

Joe: Passing each part of the CPA Exam requires that you earn a grade of 75. However, this does not mean that you managed to get 75 percent of the questions correct. The CPA Exam is graded through a very complex process that awards individual weights to each question based on the level of difficulty. An easy question has a low value; a complicated question has a higher value.

Q: In the parts that have simulations, how are the point values divided between the multiple-choice questions and the simulations?

Joe: Three separate grades are determined. The first is for the multiple-choice questions, the second is for the written communications questions, and the third is for the remainder of the simulations other than the written communications questions. After these three grades are computed, they are weighted: 70 percent for the multiple-choice questions, 10 percent for the written communications questions, and 20 percent for the simulations other than the written communications questions. The weighted average forms the candidate’s grade.

Q: How is the written communications question graded?

Joe: There are actually two levels of grading used for the written communications questions. First, the question is reviewed to see if it is on-topic. If the question concerns deferred income taxes then the memo, letter, footnote, or whatever must be about deferred income taxes. Writing a beautiful answer about leases or bonds is not appropriate. If the answer is not on-topic, no credit is received regardless of how well written the answer might be. If the answer is on-topic, then it is graded a second time solely for its use of the English language. According to the official website, "scores will be based on three general writing criteria: Organization, Development, and Expression." Notice that this answer does not have to be correct in order to get credit; it only has to be on-topic. So, even if you do not know the answer or do not know the answer completely, you should still write a clear, organized response.

I usually tell candidates to keep sentences short and simple. Do not get fancy. Make sure that you address the question and that the sentences flow in a logical fashion so that a reader can follow the information that you are providing. Jot down ideas and then present them in a logical order. Do not include bullet points or an outline. They want clear and understandable sentences and paragraphs.

The word processing program to be used resembles Word (although it is not Word) and has a spell-checker. Do not include misspelled words.

If the candidate’s final grade is within a few points of 75, the written communications answer is graded again automatically to ensure the accuracy of the points that were awarded.

Q: Do all of the multiple-choice questions have about the same level of difficulty?

Joe: In all of the parts of the exam except for BEC, the questions can actually become more difficult. The first testlet is always viewed by the examiners as being of moderate difficulty. When the answers to Testlet One are submitted, the computer automatically grades the responses. If the candidate did well, the next testlet will be slightly more difficult. If the candidate did not do well enough, the second testlet remains at the moderately difficult level. A similar comparison is made between Testlet Two and Testlet Three. In BEC, this change of difficulty levels is not present. There is no equivalent increase or decrease in difficulty in the simulations.

Q: I do not understand this increased level of difficulty. The candidate seems to be getting punished for doing well. How is this fair?

Joe: Keep in mind that each question is worth a weighted value based on its difficulty. Yes, the questions can be more demanding but the value for getting them right is higher. On the exam, you want the questions to get more difficult because that indicates that you are doing well.

Q: There are a lot of questions on the exam. Assume that I read a multiple-choice or simulation question and just do not have any idea as to the answer. Should I guess or leave the question blank?

Joe: You should always eliminate as many possibilities as you can and then make your best guess. Grading is based on the number of correct responses so a wrong answer and a blank answer have the same impact. Never leave any question blank. If you start to run out of time, guess at them.

Q: Given all of these complications that exist with the computerized exam, does anyone ever pass?

Joe: Actually, the pass rate has gone up rather dramatically since the CPA Exam became computerized. It was a paper and pencil exam until 2004. Under that previous format, the pass rate for each of the four parts was in the range of 32 to 36 percent normally. The pass rates for 2008 were:

• 49.21 percent for Financial Accounting and Reporting,
• 49.10 percent for Auditing and Attestation,
• 48.74 percent for Regulation, and
• 47.49 percent for Business Environment and Concepts.

Keep in mind that the chief reason for failure is the lack of adequate preparation. Therefore, the percentage of candidates who prepare seriously and then pass is quite high. That should be very encouraging to every candidate. If you use our free questions and answers and can put in the 250-400 hours that we recommend, you should have an excellent chance to pass. There is a very good reason to go into the CPA Exam with a great deal of optimism.

Q: I have heard rumors that the CPA Exam questions are quite difficult. Is that true?

Joe: Most experts agree that the difficulty of the CPA Exam does not come from the depth of the questions but rather from the extraordinary breadth of the exam. During these four exams, the candidate is facing questions from courses taken in college over several years. It is that broad range of questions that makes the exam such a challenge. Most candidates say that any one question is probably easier than what they faced in college. However, in college, you were usually taking each exam on two or three specifically identified chapters. The CPA Exam requires the candidate to know something about almost every possible topic.

The most common description of the CPA Exam is that it is a mile wide and an inch deep. Thus, there is no reason to dwell for long on any topic. It is much more important to cover all of the possible areas. In writing our free questions and answers, we have tried to anticipate the depth of coverage as you might expect to see on the exam itself.

Q: Will I need to bring my calculator to the exam to use in making computations?

Joe: No, a four-function (add, subtract, multiple, and divide) calculator is available to the candidate on the computer screen. In addition, spreadsheets that resemble Excel are also included. Present value tables (like those that are found at the back of Intermediate Accounting textbooks) are available if needed.

Q: Do you have any advice that I might otherwise have overlooked?

Joe: There are two keys to success on the CPA Exam.

The first is to invest an adequate amount of time using good quality review materials and make certain to cover all of the topics. You do not need to be perfect; you just need to gain enough knowledge to pass.

The second is the proper management of time during the exam. You can have sufficient information in your head but you still have to get the questions right. It is very important that to stay calm and focused. Read every question carefully to avoid making careless mistakes. Think about what the question is asking and what your note cards have listed as the most important elements of that topic. Tie the questions into what you have covered. At the same time, watch the time. Some candidates finish the exam much too early and make poor use of their allotted time. Others fail to complete the exam and leave questions blank even though they actually knew the material.

Q: Since time management is so important, how much time should I be spending on each question?

Joe: BEC is the easiest part to determine a time allocation. In that exam, there are 90 multiple choice questions that must be completed in 2.5 hours (or 150 minutes). Therefore, you need to average one minute and forty seconds per question. As you practice using our free questions, keep a watch handy and try to answer questions in that time just to get used to the proper pace.

Regulation has 72 multiple choice questions and two simulations to be completed in three hours. The AICPA has recommended spending 35 minutes on each of the two simulations in Regulation. That leaves 110 minutes (180 minutes – 35 minutes and 35 minutes) for the multiple choice questions or an average of just over one minute and thirty seconds per question.

Financial Accounting and Reporting has 90 multiple choice questions and two simulations to be completed in four hours. The AICPA has recommended spending 45 minutes on each of the two simulations in FAR. That leaves 150 minutes (240 minutes – 45 minutes and 45 minutes) for the multiple choice questions or an average of one minute and forty seconds per question.

Finally, Auditing and Attestation also has 90 multiple choice questions and two simulations to be completed but in four and a half hours. The AICPA has recommended spending 45 minutes on each of the two simulations in Auditing and Attestation. That leaves 180 minutes (270 minutes – 45 minutes and 45 minutes) for the multiple choice questions or an average of two minutes per question.

As you move through any of these exams, if you come across a question that is going to take much more than the average time, you may want to skip it and come back later. However, if it is obvious that it is going to take you significantly more time than the above averages, you may just have to make a guess so you can move on. Remember, you are not seeking perfection; you are looking for enough questions that you know so that you can get 75 points and pass.

Use your time wisely. Learn the material; use your notes to keep it fresh in your mind until exam time, and then manage your time well throughout the exam. Always stay confident. If you believe in yourself, then you can do it.