CPA Exam Sections Explained (All Four Parts)

What Are the 4 CPA Exam Sections?

The content you’ll need to learn to pass the CPA Exam is divided into four parts: Audit & Attestation, Business Environment & Concepts, Regulation, and Financial Accounting & Reporting.

  • Each part of the CPA Exam is 4 hours long
  • You can schedule and take the parts in any order.
  • You do not have to take all parts on the same day (in fact, that’s not a good idea). But you do need to complete them all within 18 months.

Which CPA Exam Part Is the Hardest?

Most candidates agree that Financial Accounting & Reporting (FAR) is the hardest section of the CPA exam. Backing this up with data, FAR also has the lowest pass rate of all the CPA Exam parts. It’s hard because it’s a long test that covers a lot of different topics.

Audit & Attestation (AUD)

Audit & Attestation (AUD) covers the most common skills a new CPA needs to professionally perform Audit and Attestation engagements, including Engagement Planning, Professional Skepticism, Ethics, and Generally Accepted Auditing Standards (GAAS).

  • Ethics, Professional Responsibilities and General Principles: 15–25%
  • Assessing Risk and Developing a Planned Response: 20–30%
  • Performing Further Procedures and Obtaining Evidence: 30–40%
  • Forming Conclusions and Reporting: 15–25%

Difficulty – Low

AUD is generally considered one of the easiest parts of the CPA exam. Public accountants already working in Audit have an easier time with this section. But auditors who think they can pass AUD without studying are often unpleasantly surprised.

Pass Rate

52.8%

Question Types

Multiple Choice (MCQ): 50%
Task Based Simulations (TBS): 50%

Business Environments & Concepts (BEC)

Business Environments & Concepts (BEC) covers a variety of knowledge and skills that don’t fall into AUD, FAR, or REG. You’ll be expected to know the basic concepts of Corporate Governance, the COSO Framework, Economics, Financial Management, Information Technology, and Business Operations.

  • Corporate Governance: 17–27%
  • Economic Concepts and Analysis: 17–27%
  • Financial Management: 11–21%
  • Information Technology: 15-25%
  • Operations Management: 15-25%

Difficulty – Low

BEC is generally considered to be one of the easiest parts of the CPA exam. CPA candidates are split on whether it’s better to take this section first to get a quick win, or save it to last to make the home-stretch easier. Stick to your study plan and you can’t go wrong either way.

Pass Rate

65.6%

Question Types

Multiple Choice (MCQ): 50%
Task Based Simulations (TBS): 35%
Written Communications: 15%

Regulation (REG)

Regulation (REG) covers all things Tax. Including Personal, Business entity, and Property tax laws. Study hard, because once you become a CPA your friends and family will be asking you for tax advice for the rest of your life. Then keep studying because REG also covers tax ethics and general business law concepts like contracts and negotiable instruments.

  • Ethics, Professional Responsibilities and Federal Tax Procedures: 10–20%
  • Business Law: 10–20%
  • Federal Taxation of Property Transactions: 12–22%
  • Federal Taxation of Individuals: 15-25%
  • Federal Taxation of Entities: 28-38%

Difficulty – Hard

REG is generally considered to be the most difficult part of the CPA exam. The material is boring, and tax laws can be complex and counter-intuitive. Business law concepts are interesting, but you’ll see new topics your undergrad courses didn’t cover.

Pass Rate

62.2%

Question Types

Multiple Choice (MCQ): 50%
Task Based Simulations (TBS): 50%

Financial Accounting & Reporting (FAR)

Financial Accounting & Reporting (FAR) covers Public company, Private company, Non-profit, and government Financial Reporting and Accounting. Demonstrate knowledge of the FASB standard setting process, Financial statement presentation, SEC reporting, and specific financial statement line items.

  • Conceptual Framework, Standard-Setting and Financial Reporting: 25–35%
  • Select Financial Statement Accounts: 30–40%
  • Select Transactions: 20–30%
  • State and Local Governments: 5–15%

Difficulty – Hardest

FAR is generally considered to be one of the hardest parts of the CPA exam. While less technically difficult than REG, the amount of topics covered makes FAR harder to pass. It’s a long test that takes the longest to prepare and study for.

Pass Rate

49.9%

Question Types

Multiple Choice (MCQ): 50%
Task Based Simulations (TBS): 50%