Before you dive into your CPA Exam studies, you need to strategize your plan to pass! Gear up for the new, more challenging CPA Exam with this 24-minute video in which Roger Philipp, CPA, CGMA, helps you create your CPA Exam Game Plan.
Get your game face on and watch this quick video, which includes:
Roger Philipp, CPA, CGMA presents:
CPA Exam Game Plan
Hello, and welcome. My name is Roger Philipp of Roger CPA Review. Today we're gonna talk about the CPA Exam Game Plan, how to officially and effectively pass the CPA exam. We're gonna look at the roadmap to success, and there are several steps to accomplishing your goal.
Step one, plan your CPA exam journey. Step two, learn the CPA exam structure. Step three, focus on higher order skills. And step four, apply for the CPA exam.
Now step one, plan your CPA exam journey. And I guess the first thing you need to do is say, okay, what is my situation? Who are you? Are you a first-time candidate, someone who's never sat for the exam before? Or you've already passed a part or you're a seasoned candidate where maybe you've studied quite a bit and haven't passed, or you're on your way to passing all four parts.
For the first-time candidate, the strategy is to sit down and say, okay, what order should I sit for the exam in? Now there's different schools of thought. FAR generally takes the longest time to prepare for, and it has the most amount of material. So we recommend starting with FAR first.
Then between REG and Audit, I would say if you're just graduating school or just got out of school and you had an amazing tax teacher or an amazing audit teacher and you feel like, hey, I feel pretty comfortable with that, then you may wanna start with Audit or with REG depending on that.
No matter what part you take, there's always gonna be topics that you haven't seen in school or you don't remember, but don't worry about it. That's our job to teach you what you need to know.
BEC I would say prepare last because first of all, it has the least amount of material. You still have four hours for that part of the exam, but also time is not of the essence as far as taking the exam because there are fewer multiple choice and fewer task-based problems. Plus the content in BEC is very general, very broad, so a lot of it you'll see as you're going through FAR, Audit, and REG.
Now keep in mind, once you pass a part, you keep that for 18 months. So that means you've got 18 months once you've passed the first part to pass the rest of it.
Now for a seasoned candidate, the strategy would be which part am I already in process of. Let's say, for example, I took a part. Darn, I got a 72, just missed it by that much. I would suggest jump back in and finish that part as well.
So let's say you're starting with FAR, that's great. Same kind of thing, maybe go to Audit and REG, and then finish up with BEC. But again, if you took a part and you came close, what I always tell people is you seem so close, you just need a little bit more information, and you too will get through that part.
Now what are the study time estimates? Generally per section we have lecture time, and then we have study and practice time. We also suggest that you finish up with sample exams.
Now as far as the lecture time, for all of our lectures, it's over 120 hours of lecture. So for example, it's about 20 hours for BEC, up to 44 hours or so for FAR. Now we generally suggest that the average successful candidate will spend about two to three hours of study time for every hour of lecture time. So let's say you've got 20 hours of lecture in BEC. That means times two, you've got about 40 hours of study time, so now we're up to 20 and 40 are 60 hours.
Plus we want you to go through some sample exams just like the exam pressure where you're sitting down working through the exam with a 15 minute actual break, which you now get on the exam. That we suggest doing twice, which is another eight hours.
So you can see where we suggest about 300 to 400 hours of prep time. Woo, that's a lot of time. That's not a number we come up with. That's what the AICPA says the average successful candidate will spend in properly preparing in order to pass the CPA exam.
Now what are some good study strategies? First of all we suggest you build a plan and you stick to it. Now that means you kinda gotta look at your life and say, okay, where am I in life? What's going on in my life? What is my personal situation, my family, do I have a family, my work, how many hours, is it busy season, is it slow time? What is my financial situation? Do I have travel plans, family vacations?
And so you wanna kinda look at the schedule accordingly and say what's gonna work better. Then you wanna incorporate that into the study planner. So the study planners will set up a study schedule, whether it's three, six, nine, or 12 months. So you wanna look at that.
And studies have shown that if you start studying every day, that you're gonna study at the same time, that it takes less time to kinda get into it. So let's say I'm gonna work all day, get home, have a little dinner, and start studying at seven o'clock at night. Well, the first night it takes 7:30 you get going, and then 7:20, and then all of a sudden by 7:03, boom, you're being efficient and effective at your studying.
Now as far as studying and choosing a study plan, as I said, we've got a three, six, nine, and 12-month schedule. You can also see that in a three-month schedule, you're studying like every day to get through all four parts 'cause you've gotta squeeze 300 to 400 hours in three months.
If you're gonna do the 12-month schedule, for example, you've got some time off, because now I've got 300 to 400 hours spread among 12 months. So that's something to consider. That would be the first step to accomplishing your studying goals.
Step two, let's learn the CPA exam structure. Now on the exam there are four parts. The four parts are Auditing, FAR, BEC, and Regulation. Each part is four hours in length. This is as of April 1st, 2017. When I took the exam way back in the day, when I was your age, it was a 19 1/2 hour three day exam twice a year, six days a year. Now you can take it like 270 days a year, six days a week, you can take it one part at a time.
Auditing has your planning, internal control, substantive testing, IT, audit reports, reviews, compilations, and so forth. That is the audit portion for four hours.
FAR, that is intermediate one, intermediate two, advance government, nonprofit squeezed into a fun-filled four hour adventure. That's leases, bonds, pensions, deferred taxes, contingent liabilities, consolidations, foreign currency, translates and remeasurement and so on. Governmental accounting, nonprofit accounting all in FAR.
BEC, we've got corporate governance, we've got micro, macro economics, we've got IT, we've got operations management, our favorite area, cost managerial, it's back, good old variances.
And then finally Regulation, that would be tax, corporate tax, individual tax, S-Corps, partnerships, estate, trust, gift, exempt organizations. It would be business law, and then also professional responsibility and ethics. So that is how your 16 hour fun-filled adventure is set up.
As far as the exam structure, it is now broken down into five different testlets. Testlet one and testlet two are multiple choice questions. Testlet three are task-based simulations.
Then you get a 15 minute break, which is really cool. Back in our day, you weren't allowed to take, oh, you could take a break, but the clock kept running. Now they give you a standardized break between testlet three and testlet four.
We suggest you take that break, get up, go to the restroom, wash your face, you know, go to your locker if you need to. Come back in, but allow enough time to check back in. You gotta get fingerprinted back in so you can sit back down and finish the exam. If you're out longer than 15 minutes, the clock will start after 15. If you wanna get back and take only a 10 minute break, you're allowed to, you can start up.
Let me also mention, you are allowed to take breaks between the other testlets, however, the clock will still continue counting. Also they're gonna do a write-up because they're gonna review all the video footage to make sure you didn't cheat, you didn't go to your locker, look at books, look at a cell phone, things like that. So you are allowed, like you gotta go, you gotta go. Then you go between testlets one and two let's say, but the clock will keep running.
So the exam itself, multiple choice, testlet one, multiple choice, testlet two, then testlet three would be two task-based simulations, 15 minute break, then testlet four and five. That would be three task-based simulations for Audit, FAR, and REG, only two for BEC.
Testlet five would be three TBS for Audit, FAR, and REG, and three written communication or essays for BEC.
So you can see how the exams are different. They each have different numbers of multiple choice, anywhere from 31 up to 38 for, for example, Regulation, so there's, you know, 76 questions on there.
Also you'll notice that your scoring, 50% of your score for Audit, FAR, and REG come out of the multiple choice, testlets one and two. The other 50% come out of the other three. For BEC, 50% are multiple choice, 35% are gonna be testlets three and four, which would be task-based simulations, four of 'em. And then 15% would be testlet five, which is written communication.
One of the things, too, we suggest, is knowing exactly what your countdown clock should look like, because when you take the exam, you can't wear a watch, there's no clocks on the wall, it's you against the countdown clock.
And when you log in and say I accept, I accept, I accept, and the exam starts, you see four hours, three-59, three-58, three-50, and your heart starts beating like oh, my gosh, I should've started studying sooner. So knowing what the clock should look like makes it much easier.
You're gonna get two like yellow boards or white boards where you can write on both sides. We suggest you write down the time you expect to finish each testlet.
So testlet one, for example, an Audit, I'm gonna start at four hours, 45 minutes in or three hours and 15 minutes left, I should be done with the first group of 36 multiple choice. Then another 45 minutes in, the second group. And then another 30 minutes in, I'm right at the two-hour mark, that's when your break should hit.
So the AICPA suggests that the halfway point is right at the end of testlet three. So when you take your break, you should be at about two hours, now in some cases, you may be a little early, an hour 40, some cases, you may be later at 2:20. But you don't wanna go too much beyond 2:30 or 1:30 'cause it means you're going too quickly or too slowly in order to get through it.
Then as you hit the task-based simulations for testlet four, you've got three there at about 60 minutes, and then another three at about 60 minutes. So that's saying roughly about 20 minutes a task-based simulation.
So the way we break it out here is again, you write down your times, figure out where you need to be. Again, you wanna be at about halfway point by the time you hit your break. But looking at the multiple choice and saying, okay, I've got 45 minutes for 31 questions, or 45 minutes for 38 questions, you've gotta figure about a minute and a quarter per multiple choice.
We suggest about 15 to 25 minutes for a task-based simulation. Some of 'em are easier, figure about 15. Some might be like a document review, more detailed simulation. You might need up to 25 minutes for that. Research, one of the task-based for Audit, FAR, and REG will be at least one will be research, figure about 10 minutes.
In BEC you have three written communications. We figure about 45 to 55 minutes for all three, or about 15 minutes each. So that is kind of the time strategy we suggest.
Now we have full-length practice exams, and these are the things we suggest you do. That's why in our study schedule we said allow at least eight hours for each part before you take the exam so you can sit down in the exam-like environment, where you're going through the four-hour exam with a 15 minute break after testlet three, so that way you kinda get that feel just before you actually go in and sit for the exam.
For step three, focus on the higher order skills. Now this is something that came out where the, went out and they talked to the firms and they said what are newly licensed two year, second year, the end of their second year, CPAs missing? And it said they're missing critical thinking, higher order skills set, the ability to really analyze the information.
So what they said is they said, okay, let's look at Blooms Taxonomy of Educational Objectives. And there's different levels, the bottom is remembering and understanding, and then application, analysis, and evaluation.
They said let's look at these. Up until 2017, the exam was mainly testing remembering and understanding and application, which are the two bottom ones. Then they added, you know what, analysis, and for Audit only, evaluation.
So as you're going through it says, okay, what are the requirements for a basic lease? Here they are, boom, remembering and understanding. What is the calculation to come up with the journal entry? That would be application.
Analysis might say, hey, here are some variances for BEC cost accounting, are they favorable or unfavorable? That might be analysis. And then evaluation would say using your judgment to draw conclusions about account receivable confirmations, that would be evaluation.
Each exam has a different breakdown of remembering and understanding, application, and analysis. But again, to emphasize, evaluation is only on the Audit portion.
Now approaching higher order skill questions. What we suggest you do is skim through the blueprints, and the blueprints are great, they replace the old CSOs, Content Specification Outlines. And what they do is they tell you how an area's gonna get tested, but it also shows you what skill level they're looking for.
And as a general rule, if it's remembering and understanding it's multiple choice. If it's application, it could be either multiple choice or a task-based simulation. If it is analysis or evaluation, it's gonna be in the form of a task-based simulation.
So what's nice about the blueprint other than over the CSOs is it'll show you how the area might be tested, so you might have analytical procedures and auditing, and it might be tested more as an analysis level, which means that's probably part of a task-based simulation. If you see the check mark in remembering and understanding like IT and Audit, you can pretty much be assured that it's gonna be more of a multiple choice type question.
So look through, use your Roger CPA Review Course where we go through the step-by-step guidance of the higher order skills, and how we go through and talk about how it ties to Blooms Taxonomy of Educational Objectives.
We also have special dedicated lessons where we're gonna focus you in on how to approach the higher order skills, how to approach these things called document review simulations. Then again, we wanna practice this higher order skill set by going through the actual problems.
Now you'll see in these things called Document Review Simulations, they have a resource tab, and in the resource tab, it'll give you like three to maybe six or seven different exhibits. And these exhibits could be a letter from the attorney, an invoice, a working trial balance, a depreciation schedule, an income statement, balance sheet, and so, so support documents.
They're gonna give you more information than you need. You have to discern between what is or isn't important. It's kinda like you're doing someone's taxes, and they show up with their shoebox, and they go, "Here, here's a shoebox of receipt. Have a lovely day, do my taxes."
You've gotta go through and discern what is deductible and what isn't, what is useful information, what is useless information. That is the purpose of the DRS.
Then as you work through the problem, you'll see in the blue, the different questions they're asking, as you click on that, it opens different options. And you may have four, five, six different choices. It could be keep the original tax or delete the tax. Or one of the other choices.
Now how am I gonna figure out which choice is correct? It's based on the exhibits in the resource tab. The support documents that help you to discern what is or isn't important, what's gonna help me answer the question, by looking at the support, by looking at the resources.
And then when you mark it, boom, it comes back with a check mark saying yes, I've addressed this issue, I've addressed this question, I've answered it completely.
We also have, which is great, a Homework Help Center, HHC, so while you're doing your studying, you go, I don't understand why A is right and B is wrong, you're not on your own, it's not a self-study, it's a full-study course.
Hey, we have CPAs on staff that are here to help you answer that question, so you can go, oh, now I understand why A is right and B is wrong. So that's the Homework Help Center, which is an important way to help make sure that you're thoroughly understanding the concepts.
Step four, apply for for the CPA exam. Now when can I sit for this exam? As I said earlier, when I took the exam way back in the day, it was three days twice a year, six days a year.
You can now book it like a doctor's appointment. I'm gonna take FAR in downtown on Saturday in the morning, boom, you book the time, the place, the part, you show up and take it.
So the testing windows are generally January, February, and then up through March 10th. So that's kinda how it goes. So it goes through the different dates. Generally you can take it January, February, and then the third window through the 10th of that month, and that's how it goes, it ends up being about 9 1/2 months a year, like 270, 280 days a year.
For the 2017 window only, because it's a new exam that has some changes, April, May, they're giving the exam, but the window shuts May 31st. There is no exam in June of 2017. Then July, August, September, back to the 10th, but here's the big catch. If you take it in April, May, you won't get your results until August, they won't release scores till August, I believe, 15, 16, 17 of 2017, because they wanna collect all the exams to make sure that they wrote a fair exam.
So because of that, it's important to realize that if I take it in April or May of '17, I may not get those results until August. So if your 18 months is, you know, you're at the risk of expiring, you need to call your State Board and find out if they're gonna give you more time.
Because if I take it in April, I'm not gonna know till August if I passed. Well, had I known I didn't pass, I could've taken it in July. So you need to contact your State Board if your 18 month is expiring right around that time. If not, you don't have to worry about it, just know you're not gonna hear from the April, May exam until the middle of August.
Again, once you pass a part, you have 18 months to pass the rest, so for those of us that have already passed a part and our 18 months is expiring soon, you need to talk to your State Board.
Where do we take the CPA exam? We go to a testing center called Prometrics, and they're located all over the country, all over the world as well. So that's why they're giving the exam globally. You can also take the exam globally.
When you go to Prometrics, couple of things. You've gotta bring your Notice to Schedule with you. If you don't have it, they won't let you in. You need two forms of ID, a photo ID and maybe a credit card, the names all have to match on all three documents, your NTS, your photo ID, and your valid ID. The other thing is make sure they haven't expired. If they've expired, they will not let you in.
Now you do have an on-screen calculator. They give you headphones, they give you a yellow or white board, double sided, two of 'em, where you can write all over it. If you fill it up, you raise it up, they'll come over and swap it out for you.
When you go to Prometrics, you've gotta check in, you gotta empty your pockets. Someone said it reminded 'em of going to prison. Not that I've been. But the point is, they check to make sure you don't have cell phones on you, written notes on your hand, anything like that.
Everything you bring has to go in a locker. If you're gonna wear a sweater, you cannot take it off during the exam, you have to wear it the entire time, you can't hang it over your chair. So dress comfortably knowing that you can't take stuff off, you gotta keep all those clothing on, which is probably good for everybody around you.
But the point is, when you go into the exam, be as prepared as possible, know what to expect. You can also go to Prometrics in advance, and they could walk you through and show you what the area looks like and so forth.
When you check in, you're on camera, there are people that walk around to make sure you're not cheating, cameras everywhere, on surveillance, and so on. So realize you gotta get fingerprinted, photoed, all of that stuff.
Allow about an hour extra when you show up so you have plenty of time to check in, sit down, and take your 4 1/2 hours. It's 4 1/2 because you've got about five minutes to check in on the screens, then you've got the exam, plus the 15 minute break, plus a five minute exit survey that they want you to take.
How do I apply for the exam? In many states, you can go through NASBA. In some states, you go through the State Board of Accountancy to apply, it's usually about 100 to $200 for the first time, and about 25 to 75 for a repeat.
Now we suggest, don't sign up for all four right away, but maybe sign up for two parts, and they're about $200 a piece, let's say. So you sign up, pay your 100 to $200 in application fee, then you have your transcript sent in, they match 'em up and say yes you qualify to sit. Then send the transcripts, get an ATT authorization to test, which means you have 90 days to pay for the parts you wanna sit for, you select the parts.
Then you get your Notice to Schedule. Now an NTS is good in most states for about six months. Some states, three months, some states, nine months, like California, and there's I think a state that is 12 months. But in most states it's about six months.
Now this is important, you only pay for the parts you plan to sit for within that window of your NTS, Notice to Schedule. So if it's six months and you only plan to sit for two parts, pay for two parts. Because if you pay 400 bucks for two parts, great. If you pay 600 but only sit for two, you forfeited the 200 bucks. But if you wanna add a part, you can do a new Notice to Schedule for the repeat fee of 25 to 75 bucks, depending on the state.
And you'll get your Notice to Schedule usually in about three or four days. So the first time you apply, it takes about four weeks because they gotta check out your transcripts and everything. Once they've approved you, to reapply takes a couple of days.
So my suggestion, first time, sign up for maybe two parts, repeat, sign up for one or two parts. That takes about a week. Then you schedule your exam with Prometrics, then you take the exam, and then you receive your scores, and you receive the scores based on the Score Release Schedule.
Now the Score Release Schedule generally is the first 20 days they collect, so January 1st through January 20th, they collect those, grade 'em for about 10 days, and then release 'em. Then they take the next 20 days, six days later, and so on. So that, they kinda release 'em three, four times in a window, that's normally how it happens.
As I mentioned earlier, for April, May 2017, you will not get your scores until August, the middle of August, August, I think, 16, 17, 18, something like that. For quarter two, score release September 22nd.
And quarter four, score release December, so you'll see here that they're kinda holding off on the release because they wanna make sure that they wrote a proper exam. So those are the proposed dates for the score release for 2017, you could also look on a website, you can also call our office.
Now what does it take to get licensed? Most states, you need 150 units, not to sit necessarily, but to get certified. So generally you need 150 units, 225 quarter units. You need to pass the exam, in a lot of states, you need to pass an ethics exam, which is a take-home exam.
And then you need one to two years of experience. In most states you need a year, with anywhere from 1,800 to 2,000 hours, and that's what you need in order to qualify, that's what you need in order to sit for the exam.
That, my friends, is your game plan for preparing for the exam, for studying for the exam, for taking the exam, for getting the results, passing the exam, and getting your experience in order to qualify to become a CPA.
As we always say, if you study, you will pass with the Roger Method. Study hard and have a great career in accounting, and thank you very much for your time.