CPA Exam Tips
The following tips are designed to be used as another tool to help you pass your CPA exam. If you have ideas for future CPA Review tips or comments to make about the above information please email us.
- Tip #1 - Know the Value of Becoming a CPA
- Tip #2 - The AICPA Ethics Exam - When should I take it?
- Tip #3 - AICPA newly released content changes
- Tip #4 - Are your study materials current?
- Tip #5 - Do I need to complete all 4 exam sections in 6-8 weeks?
- Tip #6 - No Fear - It's Just a Research Simulation
- Tip #7 - CPAs - A Recession Proof Profession
CPA Exam Tip No. 1 . . . Know the Value of Becoming a CPA
Have you ever wondered if it's worth it to take your time and money to become a CPA? What's the payback? Consider a few of the perks below:
- Increased salary - salary surveys show CPAs earn 5-10% more each year they work in accounting with the CPA designation. Compare that with earning an MBA. MBA's earn 5-10% more each year for the first five years at most. If you have more than five years of working ahead of you, why not improve your rewards.
- More chances to grow and advance - You can be an accountant with an accounting degree or you can be a CPA. All CPAs are accountants, but not all accountants are CPAs. If you want to be part of the elite group, become a CPA. Your employer will think of you as special. You will stand out above others.
- Increased job flexibility and mobility - it's easier to request a job transfer when you have proven skills. The CPA certificate shows the world that you are an intelligent person who can obtain the highest credential in your field. There are many careers in which the CPA is highly valued outside of corporate America. For example, political candidates running for office find the CPA designation to be a real plus with voters.
- Increased credibility - people look at CPAs as possessing a high degree of integrity and intelligence. It is understood that the CPA designation denotes trusted financial advisors who provide our country with all kinds of advice.
- Increased opportunities to give back to society - CPAs are actively recruited to serve on governing boards of both profit and not-for-profit entities. Whether it's serving on a corporate Board in a paid position or serving on the Board of your religious affiliation or favorite not-for-profit entity, as a CPA you can make a difference - you have a chance to leave an imprint on an entire organization.
CPAs can obtain all of the above plus more. We are fun loving people who enjoy life. You just might be surprised who is a CPA. Here are a few famous CPAs:
- Phil Knight, the founder and chair of Nike.
- Thomas Pickard, the FBI's #2 man.
- Arthur Blank, co-founder of Home Depot and owner of the Atlanta Falcons.
For the requirements to sit for the CPA exam in Illinois, see www.ilboa.org. For other states, see www.nasba.org. To learn about the CPA exam, see www.cpa-exam.org. For a world class CPA Review, read more on our website www.cpareview.niu.edu.
CPA Exam Tip No. 2 . . .The AICPA Ethics Exam - When should I take it?
Before Illinois candidates can become a CPA in Illinois they must not only pass all 4 sections of the CPA exam, they must also complete the “AICPA Professional Ethics Comprehensive” course. This is a take home, open book exam to be completed at home. A passing score is 90%. The exam is graded online immediately after a candidate inputs their answer choices.
Candidates have 3 attempts to earn a score of 90%. If a passing score is not earned by 3 attempts, the candidate must reorder a new course and exam. Since this is a requirement for all Illinois candidates, we strongly urge candidates to complete this course before they take the Auditing and Attestation (AUD) exam. Some of the 16-20% of points allocated to testing ethics and various codes of conduct include the topics covered in the AICPA Comprehensive Course.
Is there a time limit on when candidates should take this exam? No, there is no time limit. Technically, a candidate could pass the 4 exam sections and wait to take the ethics exam for several years. The only issue with waiting is the candidate cannot call themselves a CPA until they complete the requirement.
For information about receiving the Ethics exam at a discount, contact the AICPA or the Illinois CPA Society. Both offer discounted prices to members of their organizations.
CPA Exam Tip No. 3 . . .AICPA newly released content changes
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It is important to know that exam content changes frequently. The AICPA issues Content Specification Outlines (CSOs) to indicate what will be tested on the exam. See aicpa.org for more information.
Don't let changes scare you. Be prepared for them. You will shine. Ignore changes and candidates will rapidly lose confidence. The above changes could be the difference between earning a 72, 73, 74 or the wonderful 75. Don't risk it.
CPA Exam Tip No. 4 . . .Are your study materials current?
How do you know if content on the exam has changed? Why can’t you trust accounting textbooks to provide you with current material?
The above questions are good. The most common mistake CPA candidates make is to rely on study materials that are out-of-date. Why do this? In the end, a score of 72, 73 or 74 is worlds apart from a score of 75. It only takes a few out-of-date items to cause you to fail.
The examiners at the AICPA see to it that exam content is updated as often as every 6 months. When a new accounting or auditing standard is issued there is a protocol that is used to determine when that material hits the exam. The rule for content updates is well-defined by the AICPA as follows:
What are the rules regarding new accounting and auditing pronouncements? Accounting and auditing pronouncements are eligible to be tested on the Uniform CPA Examination in the testing window beginning six months after a pronouncement's effective date, unless early application is permitted. When early application is permitted, the new pronouncement is eligible to be tested in the window beginning six months after the issuance date. In this case, both the old and new pronouncements may be tested until the old pronouncement is superseded.
For the federal taxation area, the Internal Revenue Code and federal tax regulations in effect six months before the beginning of the current window may be tested.
For all other subjects covered in the Regulation (REG) and Business Environment and Concepts (BEC) sections, materials eligible to be tested include federal laws in the window beginning six months after their effective date, and uniform acts in the window beginning one year after their adoption by a simple majority of the jurisdictions.”
It is important to note, your review materials become outdated quickly. Those candidates who use materials from two or more years ago are really wasting their time. Even material that is only a year old can cause a candidate to miss a few questions resulting in that ever dreaded score of 72, 73, or 74.
Avoid purchasing review material until you are ready to use it. Work to complete each exam section within 2 testing windows. Yes, I know that candidates sometimes stumble and must repeat a section. Don’t postpone the retake. Get your materials out and begin studying right away. You are not allowed to retake a section within the same testing window. You have time to study your materials again. Plan to test in the next testing window after your stumble.
Avoid relying too much on your accounting, tax, and auditing textbooks. Many texts are out-of-date by the time they are published. Get your review materials and begin your studies.
Watch those materials purchased online from previous candidates. Why are the materials being sold? Most often the answer is: The materials are dated.
Rely on a trusted source. Use a reputable CPA Review to provide you with the proper materials. The NIU CPA Review suggests purchasing one review section at a time. We won’t force you into purchasing all 4 sections at once. Go one at a time and use current materials.
CPA Exam Tip No. 5 . . ."I need to complete all 4 exam sections in 6-8 weeks"
The latest study released by the National Association of State Boards of Accountancy (NASBA) reports the average number of sections taken within a testing window (the first two months of every quarter) is 2.23. On average, candidates are taking their time to be well-prepared. Study, prepare, and then take a section. Your chances of passing improve with added preparation time.
The best CPA plans take into account a candidate’s busy work schedule, the time to complete a CPA review, and extra time to study the review materials. Below, you will find a sample plan showing a candidate taking the NIU CPA Review live courses at our DeKalb location.
Begin by taking one of the most difficult sections - FAR. Let's say the review begins June 8 and ends on June 29. Keep up with your studies and take the FAR exam at the end of July.
The second review course, let's say REG, begins July 13 and ends August 3. Take the REG exam at the end of August.
Now, there is no time to waste. Let's say your third review course, AUD, begins on September 28. Take the AUD exam section at the end of October. The AUD review ends October 19. This gives you a month to prepare.
Finally, your last section, BEC, begins October 26 and ends November 3. Study and take BEC around Thanksgiving, completing your 4th section by the end of November.
Look how well this plan works for you. You began your review in early June and you are finished in November. Yes, you did use your weekends for classes and your evenings for study time. Yes, passing the CPA exam takes time and effort. However, like a fine wine, you can’t rush it.
Avoid rushing just to take sections. Work to be successful. Repeating sections is costly. While the NIU CPA Review will update you free until you pass, each time you take an exam section you must pay the Illinois Board of Examiners $40 a section. Also, NASBA will bill you $190.35 each time you take FAR and AUD and $171.25 each time you take REG and BEC. Wow, this adds up. It’s not only about money. Candidates lose confidence each time they fail a section.
Let the NIU CPA Review help you prepare a plan for success. We can prepare a plan to complete the exam using one or more of our 4 review locations (Chicago, DeKalb, Hoffman Estates, and Naperville). Email cpareview@niu.edu for an appointment. Be a well-prepared candidate rather than a rushed candidate.
CPA Exam Tip No. 6 . . . No Fear - It’s Just a Research Simulation
Three of the four sections of the CPA exam, Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Regulation (REG) contain simulation questions. The Business Environment and Concepts (BEC) exam contains 3 written communication questions. CPA candidates tell me they are afraid of this question format.
CPA candidates feel more comfortable with the multiple-choice (MC) questions. They have been taking MC exams and quizzes most of their lives. The simulations represent an unknown format. This is the first of several “CPA Exam Tips” that will provide you with information to conquer simulations.
The topic of this tip is the "research" format. Of the total 100 points represented on each exam section, on all sections except BEC, 6 to 7 points are earned by completing various research routines. Almost on a daily basis, CPAs utilize various databases to answer questions and to provide support for positions taken. Beginning in 2004, the American Institute of Certified Public Accountants (AICPA) very wisely changed the exam to require CPA candidates to answer research questions. You will see these questions in AUD, FAR, and REG.
To see an example of a research question for each of the 3 exam sections listed above, view the sample CPA exams at www.cpa-exam.org. Before taking the exam, view the AICPA tutorial to learn how to use the research software. There are 3 kinds of software used:
- AUD uses the AICPA Professional Standards
- FAR uses the FASB Accounting Standards Codification™
- REG uses a form of tax research software called RIA CheckPoint™
When taking the exam, save the research questions for last. Why? The total simulation area (Exam Testlet no. 4) is worth 40 points. Complete the 33-34 point areas first. Research can eat up a great deal of time. By saving this area for last, you will know exactly how much time you have. If you have to sacrifice points, give-up 6-7 rather than 33-34 points.
The CPA exam reflects the skills and tasks that entry level accountants perform in the first years of their jobs. Learn to research and not only earn points on the CPA exam but earn points in job interviews by knowing how to use the tools of the trade.
The NIU CPA Review devotes a portion of the AUD, FAR, and REG CPA reviews to teaching how to conduct the research function. We provide instructions on how to use all three of the search tools, as a different research tool is used for each of the three exams. Our expert faculty, then go on to show how to search for several sample items.
Avoid exam stress - learn how to conduct research and earn those 6 to 7 points.
CPA Exam Tip No. 7 . . . CPAs - A Recession Proof Profession
Do you want to beat the odds and “be prepared” for uncertain economic times? Yes, it is worth it to devote money and time to becoming a CPA.
Mr. Andres Garza, Director of the Office of Career Services at the University of Illinois Chicago, says “Accountants are always needed whether the economy is booming or not. Somebody has to calculate the profits and losses.”
You didn’t major in accounting - don’t despair. You are closer to becoming a CPA than you think. To sit for the CPA exam in the State of Illinois you need to have a bachelor degree (this can be in a field other than accounting), 150-total semester hours of college courses, 24 semester hours of business classes other than accounting, and 24 semester hours of accounting classes to include one income tax, audit, financial, and managerial accounting class. For complete details see the Illinois Board of Examiners website at www.ilboa.org and note the requirements are scheduled to change July 1, 2013.
We have worked with many people who earned degrees in a field other than accounting. Using community colleges, on-line course work, and universities such as the University of Illinois, Chicago, you can earn your additional hours to sit for the CPA exam. Many are now happily employed as CPAs in public accounting firms, corporate finance positions, the FBI, and other government jobs. It’s never too late to make a career change. Accountants are always in demand.
Here’s a tip: If you are short of the 150-hours to sit for the exam, consider taking the NIU CPA Review for 6 hours of college credit. Our Audit and Financial Accounting CPA Review courses can be taken for 3 semester hours each. While you sit in the review course, you can be earning credit hours. For further details see our website www.cpareview.niu.edu.
If you have ideas for future CPA Review tips or comments to make about the above information please email us.
Disclaimer: This information represents the ideas and thoughts of the staff of the NIU CPA Review and does not necessarily represent the views and ideas of Northern Illinois University.
