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Core contents of the CPA exam
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Core contents of the CPA exam
(1) Auditing & Attestation (AUAT)
The Auditing & Attestation part of the CPA exam requires knowledge about auditing procedures and auditing standards generally accepted in the United States of America US-GAAS) and other standards related to attest engagements as well as essential skills required for audit engagements and other attestation engagements. The five major content areas focus on the procedure of the auditing profession as regards the contents.
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| Plan the engagement, evaluate the prospective client and engagement, decide whether to accept or continue the client an the engagement, and enter into an agreement with the client (22 % - 28 %) |
| Consider internal control on both manual and computerized environments (12 % - 18 %) |
| Obtain an document information to form a basis for conclusions (32 % - 38 %) |
| Review the engagement to provide resonable assurance that objectives are achieved and evaluate information obtained to reach and to document engagement conclusions (8 % - 12 %) |
| Prepare communications to satisfy engagement objectives (12 % - 18 %) |
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| The emphasis of individual major content areas was partly altered. Moreover additional groups and topics were adopted in the CPA Examinations Content Specification. All in all, the scope of the examination contents has increased. Furthermore, comprising knowledge in auditing & attestation is particularly required from those CPA candidates, who plan to work in the field of auditing subsequent to the CPA examination. We assume that there is no doubt about it that auditing & attestation is likely to increasingly become the most important field of the CPA examination. |
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(2) Financial Accounting & Reporting (FARE)
Subsequent to the reformation the examination field financial accounting & reporting comprises knowledge of accounting principles generally accepted in the United States of America [US-GAAP] for business enterprises, not-for-profit organizations, and governmental entities. Moreover, there is an increasing interest in skills required for the application of these tools. As far as the content is concerned financial accounting & reporting is separated into the following five major content areas:
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| Concepts and standards for financial statements (17 % - 23 %) |
| Typical items: recgnition, measurement, valuation and presentation in financial statements in conformity with GAAP (27 % - 33 %) |
| Specific types of transactions and events: recognition, measurement, valuation, and presentation in financial statements in conformity with GAAP (27 % - 33 %) |
| Accounting and reporting for governmetal entities (8 % - 12 %) |
| Accounting and reporting for nongovernmental not-for-profit organizations (8 % - 12 %) |
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(3) Regulation (REG)
The newly defined examination area regulation is separated into the following two major areas:
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| Ethics, Professional and Legal Responsibilities, and Business Law |
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The first major area contains two major sub-content areas:
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| Ethics and professional and legal responsibilities (15 % - 20 %) |
| Business Law (20 % - 25 %) |
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This area includes knowledge of the basic aspects of the CPAs professional and legal responsibilities as well as of legal implications of business transactions, particularly as they relate to accounting and auditing. As it was in the past the relevant legal stipulations are principally federal and widely adopted uniform laws.
The second major area Federal Taxation contains the following four major sub-content areas:
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| Federal tax procedures and accounting issues (8 % - 12 %) |
| Federal taxation of property transactions (8 % - 12 %) |
| Federal taxation - individuals (12 % - 18 %) |
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(4) Business Environment & Concepts (BEC)
The AICPA words the requirements of this newly defined examination area as follows:
The Business Environment & Concepts section tests knowledge of general business environment and business concepts that candidates need to know in order to understand the underlying business reasons and accounting implications of transactions, and the skills needed to apply this knowledge in performing financial statement audit and attestation engagements and other functions regularly performed by CPAs affecting the public interest.
Business Environment & Concepts is separated in five major content areas: |
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| Business structure (17 % - 23 %) |
| Economic concepts essential to obtaining an understanding of an entity's business and industry (8 % - 12 %) |
| Financial management (17 % - 23 %) |
| Information technology (IT) implications in the business environment (22 % - 28 %) |
| Planning and measurement (22 % - 28 %) |
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The most important new aspect besides of the clear focus on IT knowledge for the implementation of the major content area economic concepts essential to obtain an understanding of an entitys business and industry is separated into the following four groups:
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| Business cycles and reasons for business fluctuations |
| Economic measures and reasons for changes in the economy, such as inflation, deflation and interest rate changes |
| Market influences on business strategies, including selling, supply chain, and customer management strategies |
| Implications to business of dealing in foreign currencies, hedging and exchange rate fluctuations |
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