Business Environment & Concepts (BEC) CPA Exam Section

BEC CPA Exam Content & Structure

BEC CPA Exam Content & Structure

 

BEC Exam Overview & Insights

The Business Environment and Concepts (BEC) section of the CPA Exam tests CPA candidates’ understanding of business concepts and the significance of a CPA’s professional duties and responsibilities within the larger context of the business environment. Areas covered on the BEC Exam are corporate governance, economic concepts and analysis, financial management, information systems and communications, strategic planning and operations management. One unique aspect of the BEC exam is that it requires the candidate to prepare and submit three Written Communication responses.

Many CPA candidates consider BEC to be the easiest section of the CPA Exam. However, BEC pass rates have historically been only slightly higher than those for other sections, and the exam still requires a serious study effort.

BEC Exam Content

17-27% Corporate Governance

  • Internal control and enterprise risk management frameworks
  • Other regulatory frameworks and provisions

17-27% Economic Concepts and Analysis

  • Economic and business cycles
  • Market influences on business
  • Financial risk management

11-21% Financial Management

  • Capital structure
  • Working capital
  • Financial valuation methods and decision models

15-25% Information Technology (IT)

  • IT governance
  • Role of IT in business
  • Information security/availability
  • Processing integrity (input/processing/output controls)
  • Systems development and maintenance

15-25% Operations Management

  • Cost measurement concepts, methods and techniques
  • Variance analysis
  • Process management
  • Planning techniques

BEC Exam Structure & Format

The BEC Exam is 4 hours long, though the candidate is not required to use all the allotted time, and consists of 62 Multiple Choice Questions (MCQs), 4 Task-Based Simulations (TBSs) and 3 Written Communication Tasks (WCs).

Of the 62 MCQs, 50 are operational, meaning they count toward the exam score, while 12 are pretested and do not count toward the exam score. Of the 4 TBSs, 3 are operational and 1 is pretested. Of the 3 WCs, 2 are operational and 1 is pretested. Other than scoring, there is no functional difference between operational and pretested questions and no sure way for the candidate to tell the difference between an operational and pretested question.

The BEC Exam is organized into four testlets – two 31-question MCQ testlets followed by a 2-question TBS testlet, then an optional 15-minute break that does not count against the 4-hour test time, then an additional 2-question TBS testlet, then one 3-task WC testlet. The candidate proceeds at his or her own pace through the testlets. Once a testlet has been submitted, it cannot be revisited. 

BEC Exam Structure & Format

The operational MCQs count 50% toward a candidate’s exam score. The operational TBSs count 35% toward a candidate’s exam score. The operational WCs count 15% toward a candidate’s exam score. 

By default the first MCQ testlet is of ‘Medium’ difficulty. The difficulty level the next MCQ testlet depends on the candidate’s performance on the first testlet. The candidate will therefore experience one of the following MCQ testlet difficulty sequences:

  • Medium – Difficult (candidate performed well on first testlet)
  • Medium – Medium (candidate did not perform well on first testlet)

Characterizing a testlet as ‘medium’ or ‘difficult’ refers to the average difficulty of the questions in an MCQ testlet. There is not a binary ‘medium’ or ‘difficult’ value assigned to each MCQ. Rather, the difficulty level of each question exists on a numeric scale.

Credit awarded for MCQs is weighted by difficulty level, meaning more credit is awarded for getting a more difficult question correct than for getting a less difficult question correct. Therefore, a candidate with a Difficult testlet is not penalized for having harder questions, nor is there any advantage in having two Medium testlets.

It is still possible to pass the exam even with a Medium-Medium MCQ testlet sequence. In these cases, good-to-excellent performance on the second MCQ testlet, the TBS testlet and the WC testlet is key to passing.

The assigned TBS testlet and the assigned WC testlet are pre-selected and have nothing to do with the candidate’s performance on the preceding MCQ testlets, nor do the TBSs and WCs within a TBS testlet or within the WC testlet  proceed according to performance on the previous item.

WCs are graded according to three general criteria: organization, development, and expression.

Organization refers to structure, ordering of ideas, and connections between ideas. An overview or thesis statement is expected, along with unified paragraphs and well-chosen transitions and connecting elements.

Development refers to supporting evidence or information to clarify the candidate’s assertions. It includes details, definitions, examples, and rephrasing.

Expression refers to the quality of the business English used. Grammar, punctuation, word usage, capitalization and spelling are all considered.

Operational WCs are graded via software, but are automatically reviewed and re-graded by human scorers if the candidate is ‘on the bubble’ or close to a passing score on the BEC exam. If more than one person re-grades a candidate’s WC responses, the average of the human graders’ scores will be the candidate’s final WC score. 

BEC EXAM LENGTH

4 Hours

BEC SAMPLE QUESTIONS

The BEC section of the CPA Exam tests CPA candidates’ understanding of business concepts and the significance of a CPA’s professional duties and responsibilities within the larger context of the business environment. Practice your BEC knowledge now, using the Interactive Practice Questions, which contains 5,000+ Questions and Task-Based Simulations, including AICPA-Released Questions.

BEC EXAM SCORING

CPA candidates are given 4 hours to complete the BEC Exam and are required to receive an overall scale score of 75 or higher in order to pass. Download our infographic for an easy guide on how the BEC section of the CPA Exam’s structure and test administration play key factors in how the exam is scored overall.

Multiple-Choice Questions (MCQs)
Testlets 2
Operational 50
Pretest 12
Total MCQs 62
Task-Based Simulations (TBS)
Testlets 2
Operational 3
Pretest 1
Total TBS 4
Written Communications (WC)
Operational 2
Pretest 1
Total WC 3

BEC EXAM HISTORICAL PASS RATES

BEC EXAM HISTORICAL PASS RATES

BEC EXAM STUDY TIPS

  • Commit to truly understanding the material.
  • Make a plan and stick to it – our Study Planners can help.
  • Consider eliminating distractions during your designated study times – block Internet access, turn off notifications, tell family, friends and colleagues you will be completely unavailable.
  • The BEC exam requires a candidate to know a little bit about a lot of topics – but be sure you really know that little bit!
  • Practice the mnemonics not merely to memorize, but to understand – recite them while explaining, in your own words, what each element means and how it fits into the big picture.
  • Learn, understand, and memorize the various formulas and ratios. Practice explaining their meaning in your own words.
  • When you find yourself stuck on a problem or concept, post in our Homework Help Center for additional guidance.
  • Eat well, exercise, and get plenty of rest.

BEC EXAM FAQS

I don’t have any business experience. Am I at a disadvantage?

No, the Roger CPA Review BEC course assumes no prior business experience on the part of the candidate, and our pass rate speaks for itself. Roger teaches the material from the ground up, and many of our students report finally being able to ‘get’ tricky subjects such as Cost Accounting after using our course in order to pass the exam.

How many hours must I study for BEC in order to pass?

We estimate approximately 51-68 hours of study are required in order to pass BEC, but each student is unique and has their own time requirements.

In which order should I take BEC among the four sections of the CPA Exam?

The order in which a candidate takes the four sections of the CPA Exam will vary depending on several individual factors, but because there is some overlap between BEC and both FAR and AUD, we designed three of our four Study Planners to direct the candidate to take BEC after both FAR and AUD.