The Certified Public Accountant (CPA) Examination is the exam that an individual must pass in order to qualify for licensure as a certified public accountant in any of the 55 U.S. jurisdictions (the 50 states, the District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, and the Commonwealth of Northern Mariana Islands). According to the CPA Examination Mission Statement, the purpose of the exam is “To admit individuals into the accounting profession only after they have demonstrated the entry-level knowledge and skills necessary to protect the public interest in a rapidly changing business and financial environment.”
The CPA exam is set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. The CPA exam is available only in a computer-based format.
The CPA Exam consists of four sections:
- Auditing and Attestation (AUD) – This section covers knowledge of auditing procedures, generally accepted auditing standards and other standards, and the skills needed to apply that knowledge.
- Business Environment and Concepts (BEC) – This section covers knowledge of general business environment and business concepts that candidates should know in order to understand the underlying business reasons. It also covers accounting implications of business transactions, and the skills needed to apply that knowledge.
- Financial Accounting and Reporting (FAR) – This section covers knowledge of generally accepted accounting principles for business enterprises, not-for-profit organizations, and governmental entities, and skills needed to apply that knowledge.
- Regulation (REG) – This section covers knowledge of federal taxation, ethics, professional and legal responsibilities, and business law, and the skills needed to apply that knowledge.
Individual state boards of accountancy determines the eligibility to sit for the CPA Exam. Eligibility requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one year study.