The following tips are from You Can Pass the CPA Exam: Get Motivated, 2nd Edition. Hopkins, the director of Northern Illinois University's top-notch CPA exam preparation program, also provides checklists to help determine strengths and weaknesses, which are excerpted below.
Physical Well-Being
While you don't need to be a bodybuilder to pass the exam, you do need to consider your physical well-being when preparing and sitting for it:
- Quit smoking -- not just because it's bad for you, but because it's against the rules. Smoking is not allowed during the CPA exam. For the entire 14 hours of the CPA exam experience, you must be smoke-free. Is this going to bother you? If it is, begin dealing with the problem now, as you prepare for the exam.
- Seek professional help for chemical dependencies. Don't study under the influence of alcohol or other drugs.
- Check your eyesight. You want to be sure you're reading the numbers right. Contact lenses are not recommended because they can dry out your eyes. You're not allowed to bring eye drops into the exam room (such items must be left in a locker and used only during breaks).
- Prepare prescriptions. If you're trying a new prescription, do it well in advance of the exam just in case you have an allergic reaction.
- Watch your weight. Overeating can make you drowsy. Eat assorted fruits and vegetables and drink plenty of water.
Mental state
Mental preparedness involves clearing your mind by resolving as much conflict in your life as you possibly can. Think about the distractions in your life and how you can minimize or eliminate them before beginning exam preparation. Proper preparation requires focus. Keep in mind the 18-month limitation -- you must successfully complete all sections within 18 months of the day you sat for the first section that you passed.
Technical abilities
There is no doubt that your technical ability is the most important element in passing the exam. The required technical knowledge encompasses many areas. Take some time to think back to your college days. Ask yourself if you remember a discussion of these areas. Use the checklist below to evaluate how much you remember. Admit that if you can't recall anything about the area, you must be weak. If you took the course many years ago, more than likely you are weak for two reasons:
- The longer the time between the coursework and the CPA exam, the more you are likely to forget.
- The content probably has changed greatly over time.
Evaluate your technical strengths and weaknesses individually by exam section. The checklists for AUDIT, FAR, REG and BEC are below. Review the checklists, then read on to learn how to correct your weaknesses and employ your strengths.
Auditing and Attestation (AUDIT)
4.5 hours in length
| Topical Area |
Yes |
No |
| Did you take at least one semester of auditing? |
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| Did your auditing course include coverage of audit sampling? |
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| Did your auditing course include coverage of reviews and compilations of nonpublic entities? |
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| Did your auditing course require you to understand the various types of audit reports? |
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Were you responsible for knowing the key elements of internal control for the major systems areas of
- Revenue recognition and accounts receivable
- Purchasing and accounts payable
- Investment purchases and dispositions
- Payroll accounting
- Production and inventory systems
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| Were you required to prepare audit working papers to document the audit procedures performed? |
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| Did you learn to compute and analyze various ratios and trends? |
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| Did you learn how to use the AICPA Professional Standards database research tool? |
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Financial Accounting and Reporting (FAR)
4.0 hours in length
| Topical Area |
Yes |
No |
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Were you required to prepare the following financial statements?
- Balance sheet
- Income statement
- Statement of Cash flows
- Statement of Changes in Stockholders' Equity
- Statement of Other Comprehensive Income
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| Were you required to prepare journal entries? |
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| Did you learn about derivatives and other forms of financial instruments? |
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| Were you required to compute the present and future value of money using table factors and formulas instead of using a financial calculator? |
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Did you study deferred taxes? |
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| Do you know how to account for capital lease transactions? |
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| Did your financial accounting class include coverage of pension accounting? |
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| Do you remember how to compute earnings per share? |
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| Did your professor provide complete coverage by teaching all of the material included in the textbook? |
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| Did you spend time learning the accounting methods for both bonds payable and bonds receivable? |
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| Do you know how to compute, analyze, and compare certain financial ratios? |
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| Did you learn how to account for governmental entities? |
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| Did you learn how to account for not-for-profit entities? |
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| Were you taught how to use the financial accounting and research system (FARS) database research tool? |
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Regulation (REG)
3.0 hours in length
| Topical Area |
Yes |
No |
| Did you study corporation taxation issues? |
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| Did you study partnership taxation? |
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| Did you study taxation issues for trusts and estates? |
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| Did you study taxpayer responsibilities? |
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Did you learn how to use a tax research database tool? |
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| Did you write tax memos to clients? |
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| Did you complete tax returns and forms online? |
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| Did you study the AICPA Code of Professional Conduct in your auditing or business law class? |
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| Did your business law class contain coverage of commercial paper? |
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| Did you study bankruptcy laws? |
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| Did you learn about real estate and property laws? |
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Business Environment and Concepts (BEC)
2.5 hours in length
| Topical Area |
Yes |
No |
| Did you study microeconomics? |
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| Did you study macroeconomics? |
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| Did you study how to legally form, operate, and dissolve both a partnership and the corporate form of business entity? |
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| Did you study accounting information systems? |
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Did you take a finance or a managerial course that included coverage of
- Balanced scorecard
- Capital budgeting
- Cost volume profit analysis
- Regression analysis
- Activity-based costing
- Variances
- Cost of capital
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Overall changes by section
Things to consider:
- The Sarbanes-Oxley Act of 2002 is scheduled for testing beginning in 2005. This is a huge addition to both the Audit and Regulation law area.
- Candidates may be weak in the Financial Accounting and Report section if they have never studied governmental and not-for-profit accounting. Skipping this area could cost you over 20 points.
- The Financial Accounting Standards Board is not shy about changing accounting principles. Recent years have brought a new financial statement, the statement of other comprehensive income, a change in segment reporting, and many changes dealing with investments and financial instruments.
- Candidates who take only one income tax class probably have learned only individual taxes. Estate and trust taxation concepts are most often taught in the corporate tax class.
- Knowledge of corporate and partnership taxation issues is a must-know.
- For business law issues, the government regulation of business has been expanded to include environmental and employment laws. Federal-securities acts are a must-know. Property issues now deal with the rights to computer technology.
- The newest exam section, Business Environment and Concepts, should only require one semester of managerial accounting. A solid understanding of basic issues such as variances, process costing, and activity-based costing is sufficient. Two semesters of economics -- one finance principles course and one accounting systems course -- is enough.
Knowledge preview
Thumb through a few different CPA exam prep manuals -- at the local bookstore or the library -- and answer some questions in specific areas (e.g. bonds). Find the manual that you like best. If your review materials contain 40 questions on bond accounting, you might work every fourth question. (Don't write in the books, of course.) The more detailed the answer explanations are, the more effective and efficient your studies will be. Don't let your knowledge preview scare you. Admit your weaknesses and begin correcting them. Don't fear them.
Correcting weaknesses and using your strengths
Candidates tend to like to study their strong areas and continue to study material even when they know it -- a major mistake. To adequately conquer the exam, you must move outside of your comfort zone. Have confidence in yourself. Don't give up too early -- even if that means studying a complex concept the day before the exam. Some weaknesses take minutes to fix, others take hours. Follow a detailed study plan to correct your weaknesses, not to reinforce your strengths. Study to be your best, not to be perfect.
