By Penne Ainsworth |Chair, Department of Accounting
My name is Penne Ainsworth and I am the current Chair, Department of Accounting at UW. Prior to this appointment, I was Associate Dean for the College for 4 years (before that I was Department Chair for 6 years). I came to UW in 1997 after a 10-year career at Kansas State University (after receiving my Ph.D. from the University of Nebraska). So, if you are doing the math, you know that I have been in academia for a few years now. Why? I chose this career because I love teaching. My passion is helping people achieve their goals. And, thus, that is the subject of this blog.
I believe that passing the Certified Public Accounting (CPA) Exam is comprised of three components: (1) content, (2) preparation, and (3) attitude, i.e. (CPA). You will be successful if you address each of these components in a systematic and rational manner.
The CPA exam is a 4-part examination covering all aspects of content knowledge, skills, and analytical abilities expected of an entry-level professional. The law in Wyoming (and most other jurisdictions) requires candidates to have 150 credit hours of post-secondary education including 24 hours of upper-division accounting coursework and 24 hours of business (non-accounting) coursework.
The Business Environment and Concepts (BEC) section assesses knowledge and skills of the general business environment including cost accounting, finance, communications, and strategic planning. Financial Accounting and Reporting (FAR) tests knowledge and analysis of U.S. and International financial reporting for businesses, not-for-profits, and governmental entities. The Regulation (REG) section appraises knowledge and analysis of ethics, professional, and legal responsibilities in business law and federal taxation. Finally, Auditing and Attestation (AUD) examines U.S. and International ethics and auditing standards as well as standards related to attestation, assurance, accounting, and review services. Together, these four sections total 14 hours of testing.
As you can see from the brief descriptions above, knowledge of cost accounting, financial accounting, tax, information systems, and auditing is crucial. But that is not sufficient. A candidate must also understand finance, marketing, management, and how to research and communicate.
The CPA examination is an exam like no other so preparation is a must. First, it is taken one part at a time in any order the candidate choses. But, and this is really important, you must plan in advance. The exam is only available the first two months of every quarter and it must be applied for, paid for, and scheduled in advance. The exam is actually taken at a Prometric center of your selection.
Second, the exam is very difficult—it is long, each part is intense (breadth and depth), and the first-time pass rates are below 50% nationwide. So you must allow plenty of advance study and preparation time. And this needs to be quality, effective study time. Research indicates that people do not multitask nearly as well as they think they do. So if you find yourself “studying” while you are still “connected” to half-a-dozen devices, you probably are not studying effectively (if at all).
Third, you must understand the exam structure. It is important to study the Content Specification Outlines published by the AICPA and to understand how the exam questions are written. The exam is based on Bloom’s taxonomy of learning which, in brief, is a hierarchy meaning that you must remember basic terminology and concepts before you can understand their meaning. Then and only then, you can apply those concepts to different situations and analyze them. Finally, once you have achieved those abilities, you can evaluate and create. If you approach exam preparation in this manner, you are more likely to be successful. Trying to apply a concept that you don’t understand is a futile exercise!
I also recommend that you invest in review materials and/or a review course. While UW accounting students have had coursework in all areas covered by the exam (assuming that student completes the Masters’ in Accounting); the nature and structure of the exam warrant this additional investment. There are many great vendors who provide CPA review materials so you should find the package that fits both your learning style and wallet. Using review materials will help you structure preparation time, focus on areas of weakness, and learn how the exam is formatted. Review materials are truly an investment with a high ROI.
Finally, an important but often overlooked, component of success is attitude. The CPA exam is passable. Candidates pass it every time it is offered; candidates pass all four parts the first time; you can be one of those! But you must study. You must practice, practice, and practice some more.
Complete the multiple-choice questions provided in your review materials and see how you score. Remember, getting everything right does not get you a CPA+ license. No one will ever ask you what your score was—you either passed or you didn’t—and passing is a 75. So if you are hitting 80-85 in a particular section go on to something else and briefly review this area right before the exam.
Learn from your mistakes. If you miss some of the multiple-choice, don’t throw your hands up in despair. Look at the correct solution. What did you do wrong? Are you consistently making the same mistake? Is it little words you are missing in the questions? Figure out the areas where you are weak and do extra study—beyond the review materials. Depending on your learning style, write note cards or prepare audio/visual materials for yourself to use for later review. Just the act of engaging in preparing these materials will aid your study time.
Finally, keep some perspective. This is an exam, not a life. Make sure you keep yourself healthy as you pursue this objective. Get plenty of sleep, eat well, and exercise. Your brain needs fuel and oxygen to work. And remember to celebrate (appropriately) when you pass!
Feel free to comment below for any questions!