The CPA exam journey is a marathon, not a sprint. With four distinct sections to complete, many candidates wonder, “Which section of the CPA exam should I take first?” The choice of what CPA Exam to take first is crucial; the right starting point can set a strong foundation, boost confidence, and build momentum. Generally speaking, most recommend that you take the most difficult section first. This article will guide you through key considerations and offer a personalized approach to help you determine the best CPA exam section to tackle first, ensuring you start on the right foot in your CPA journey.
Overview of the Four CPA Exam Sections
The uniform CPA exam has four CPA exam sections, each testing a unique set of skills, with its own CPA exam blueprints, which are developed by the AICPA. Understanding what each exam section entails is essential for planning your exams and study strategy:
Financial Accounting and Reporting (FAR)
FAR, known as the most difficult section, covers a vast range of topics, including financial accounting, financial reporting, governmental accounting, and various standards such as GAAP and IFRS. FAR is challenging due to its comprehensive content, testing your grasp of general principles, financial statement preparation, revenue recognition, and complex topics like pensions and leases. Many candidates see FAR as foundational because it establishes foundational knowledge referenced in other sections. The FAR CPA exam section requires a strong understanding of accounting and reporting across multiple industries, making it both extensive and detail-heavy. Test takers who are organized and can absorb information efficiently may find FAR a rewarding, though demanding, first exam.
Auditing and Attestation (AUD)
AUD emphasizes auditing standards, ethics, and procedures, focusing on risk assessment, audit reports, and professional ethics. Candidates with a background in auditing or an audit class often find AUD manageable, as it aligns closely with real-world audit processes, including tasks like identifying control risks and assessing financial integrity. If you’re familiar with audit tasks, this section may feel less daunting. AUD covers standards from governing bodies such as the PCAOB, AICPA, and GAO, requiring candidates to understand the importance of ethics and professional responsibilities. AUD’s content is often relevant to roles where CPA candidates help ensure financial transparency.
Regulation (REG)
REG dives into federal tax procedures, tax compliance, business law, and ethics, making it popular among those with a background in tax or law. REG covers individual, corporate, and partnership taxation, business ethics, and regulatory compliance. Candidates in tax-related fields may find REG’s focus on tax laws, strategy, and legal implications relevant, as it requires applying complex tax codes and understanding legal principles that affect financial reporting. REG is an excellent choice for candidates interested in careers involving tax advisory, compliance, or corporate law, providing practical, in-depth knowledge for immediate use.
Discipline Sections
With the CPA evolution, candidates choose one of three new discipline sections based on career goals, allowing for specialization:
- Business Analysis and Reporting (BAR): Suited for those interested in business analysis, financial analysis, and data management, BAR is ideal for roles in financial planning and analysis. It includes advanced concepts, often involving financial modeling and quantitative analysis. If you enjoy working with data, BAR is a good fit.
- Information Systems and Controls (ISC): Perfect for candidates focused on IT, cybersecurity, and information systems, ISC emphasizes risk management and systems control. ISC suits candidates interested in IT audit or cybersecurity, covering cybersecurity frameworks and digital controls.
- Tax Compliance and Planning (TCP): TCP covers tax compliance and planning, ideal for candidates specializing in tax advisory or compliance. It includes tax planning and optimization with topics like entity formation, retirement planning, and corporate tax strategies.
Each chosen discipline aligns with specific career paths, helping candidates build expertise that directly impacts their chosen field.
Factors to Consider When Choosing Your First CPA Exam
Background Knowledge
Starting with core sections that align closely with your education or professional experience is beneficial. Candidates with a finance or accounting background may find the FAR section more manageable, while those with tax experience may prefer REG or TCP. Leveraging your background can make each section of the CPA exam feel more accessible and increase your confidence.
Difficulty Level
Many candidates find FAR the hardest section, while tax compliance and planning (TCP) may be more straightforward for those with tax experience. The FAR section, being extensive, can be intimidating, but it also builds a foundation for other sections. Candidates who enjoy analysis might find BAR engaging, while those passionate about IT may prefer ISC. Choosing a section you feel confident in can reinforce your commitment.
Testing Windows and CPA Exam Timeline
With continuous testing, you can sit for each section when prepared. If you aim to pass all sections within a year, a manageable first section is essential. Starting with FAR may allow more flexibility later, while a simpler first section can boost morale. Aligning your study schedule with personal goals and commitments, like work or family, is critical.
Personal Study Preferences
Each section has unique study requirements. FAR may need long study sessions, while REG and AUD allow shorter, targeted ones. Candidates who thrive in structured, long-term study may find FAR manageable, while those who prefer concise topics may start with REG or TCP. For example, if you prefer straightforward, segmented topics, REG might be a good fit, while financial accounting and reporting (FAR) might appeal to those who excel with comprehensive material.
Types of Questions on the CPA Exam
The CPA exam uses various question types to assess knowledge across cognitive levels, from recall to analysis:
- Multiple-Choice Questions (MCQs): FAR MCQs may include select transactions, REG may feature tax calculations, AUD covers audit standards, and ISC addresses cybersecurity. These questions comprise a significant portion of each section.
- Task-Based Simulations (TBSs): TBSs require applying concepts to real-world scenarios. FAR TBSs might involve financial statement adjustments, while AUD TBSs cover obtaining evidence or assessing risk. They simulate tasks a certified public accountant might encounter.
- Written Communication Tasks (WCTs): Unique to BAR, WCTs assess the ability to draft professional responses on topics like analysis and reporting. WCTs are important for roles needing clear, concise written communication.
Knowing these question types helps prepare effectively by practicing each format. Familiarity with each type enhances efficiency and confidence, helping you approach each question with a clear strategy.
Reasons to Take Each CPA Exam Section First
- FAR First: FAR provides a broad accounting foundation and establishes foundational knowledge. Starting with FAR requires a structured study plan but can simplify future studying.
- AUD First: Candidates with auditing experience may find AUD accessible due to its overlap with real-world tasks and professional responsibilities.
- REG First: Candidates with a tax background may start with REG, covering tax and federal taxation. It’s ideal for those with tax advisory or compliance aspirations.
- Discipline First: Starting with a discipline section—BAR, ISC, or TCP—can benefit those with specialized backgrounds, aligning the exam with existing skills for a smoother start.
Best CPA Exam Order Based on Different Candidate Profiles
- Recent College Graduate: Many new graduates choose FAR for its foundational content, then proceed to REG or a discipline section.
- Working Professional in Accounting: Experienced accountants often start with FAR or AUD, while ISC appeals to IT-focused professionals.
- Career Changer: Candidates from other fields may prefer REG or a discipline aligned with their background.
CPA Exam Scores
CPA exam scores range from 0 to 99, with a passing score set at 75 for each section. This doesn’t represent a percentage but rather a scaled score based on the difficulty and quality of answers across multiple-choice questions, task-based simulations, and written communication tasks where applicable. Scoring combines your ability to demonstrate foundational knowledge, application, and higher-order thinking skills. Since the exam is adaptive in nature, questions may vary in difficulty based on prior responses, meaning scoring reflects both accuracy and the level of difficulty successfully managed. Candidates typically receive their scores within a few weeks, and passing all four sections is necessary to earn the CPA license.
Final Recommendations: What CPA Exam to Take First
No single exam order suits everyone. Aligning your journey with your strengths, experiences, and study preferences is essential. While starting with FAR can build a foundation, beginning with a manageable section may boost confidence. Flexibility and a willingness to adapt your strategy are key.