CPA Exam Sections: Core + Discipline

Pop quiz: What do personal financial planning strategies, recurring and routine transactions, technical accounting, and federal tax compliance all have in common?

They’re all included in a section of the CPA exam.

The CPA exam sections have significantly changed since I took the exam. You’ve probably heard about the new blueprints, the elimination of BEC, and the introduction of the discipline sections. However, knowing a little bit about each CPA exam section is important because this knowledge can help you decide which CPA exam to take first.

The CPA exam now aligns more closely with real-world practices, keeping up with the fast-paced business environment. For anyone stepping into the accounting field or aiming to enhance their career, understanding the updated sections of the CPA exam is key. Let’s dive into the core and discipline sections, designed to assess your expertise across essential accounting areas, helping you plan your study strategy and pave the way for success in the accounting profession.

Key Takeaways

• CPA Evolution Overhaul: The exam’s structure has been revamped through the CPA Evolution initiative, emphasizing the relevance of accounting practices in a modern context.
• Core Sections’ Emphasis: The core sections of the CPA exam—Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Regulation (REG)—continue to serve as the foundational pillars, testing candidates on essential knowledge every CPA must possess.
• Introduction of Discipline Sections: The CPA exam now includes discipline sections, enabling candidates to tailor their expertise with options like Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), and Tax Compliance and Planning (TCP).

Core Sections of the CPA Exam

The core sections of the CPA exam, AUD, FAR, and REG, are the bedrock for aspiring CPAs, focusing on essential aspects of auditing, financial reporting, and regulatory compliance. These segments test a candidate’s grasp of critical accounting principles and the legal framework surrounding the accounting profession. Mastery of AUD, FAR, and REG is vital for navigating the accounting field’s complexities and maintaining the profession’s integrity.

Auditing and Attestation (AUD)

This section is like the Sherlock Holmes of accounting—meticulous, detail-oriented, and always on the hunt for evidence. It covers the principles of auditing, obtaining evidence, professional responsibilities, and ethics. It’s not just about the numbers; it’s about understanding the story they tell and ensuring that the story is accurate and reliable.

• Ethics and Professional Responsibilities: Delve into the ethical considerations and professional standards guiding auditors’ conduct.
• Assessing Risk and Developing a Planned Response: Learn to identify and assess audit risks and develop strategies to address them.
• Audit Procedures and Evidence: Master the art of performing audit procedures to gather and evaluate evidence.
• Forming Conclusions and Reporting: Understand how to conclude an audit and report on audit findings.
• Task-Based Simulations (TBSs): Engage in simulations that mimic real-world auditing tasks, testing your application of auditing standards.

In AUD, the 2024 update now emphasizes a data-driven audit approach, incorporating emerging technology topics like data analytics to reflect modern auditing practices and the evolving role of technology in identifying risks and enhancing audit accuracy.

What CPA candidates have to say about AUD:

Financial Accounting and Reporting (FAR)

Imagine yourself as an architect, but you’re crafting comprehensive financial statements instead of buildings. FAR dives into the complexities of financial reporting, balance sheet accounts, government-wide financial statements, and reporting frameworks. It’s a test of your ability to communicate financial information clearly and accurately, covering everything from local governments to not-for-profit entities.

• Conceptual Framework and Financial Reporting: Explore the underlying principles and standards of financial reporting.
• Select Financial Statement Accounts: Gain proficiency in reporting and analyzing select balance sheet and income statement accounts.
• Governmental Accounting and Reporting: Understand the unique aspects of accounting and financial reporting for state and local governments.
• Not-for-Profit (NFP) Accounting: Learn the principles of financial reporting for not-for-profit organizations.
• Multiple-Choice Questions and Task-Based Simulations: Test your knowledge through multiple-choice questions and practical simulations related to financial accounting and reporting.

In FAR, the 2024 update integrates advanced topics in data analytics and enhanced reporting standards, reflecting the growing importance of technology in financial reporting and ensuring compliance with both U.S. GAAP and IFRS in a globally connected environment.

What CPA candidates have to say about FAR:

Regulation (REG)

If AUD is Sherlock Holmes, then REG is the guardian of the realm, ensuring compliance with laws and regulations. It spans federal taxation, business law, tax compliance and planning, federal tax procedures, and professional responsibilities related to tax practice. It’s about mastering the rules of the game and advising others on how to play it right.

• Ethics, Professional Responsibilities, and Federal Tax Procedures: Navigate the ethical and procedural aspects of tax practice.
• Business Law: Understand the legal framework affecting businesses, including contracts, agencies, and business structures.
• Federal Taxation of Property Transactions: Dive into the rules governing the taxation of property sales, exchanges, and other transactions.
• Individual and Entity Taxation: Master the principles of taxation for individuals and various entities, including corporations and partnerships.
• Tax Compliance and Planning: Learn strategies for tax compliance and tax preparation to minimize tax liabilities and comply with tax laws.

In REG, the 2024 update emphasizes emerging topics like digital asset taxation and recent legislative changes, aligning the section with the latest developments in tax law and expanding coverage of ethical standards and technology-driven tax compliance to reflect evolving regulatory practices.

Here’s what some CPA candidates said about REG on this thread:

Discipline Sections of the CPA Exam

The discipline sections were introduced to the CPA exam as part of a broader initiative to ensure that the exam remains relevant in the face of the rapidly evolving accounting profession. These sections allow candidates to specialize in areas of accounting that align with their interests and career aspirations, reflecting the diverse skill sets needed in today’s complex business environment. By adding these discipline sections, the exam aims to produce well-rounded professionals equipped with both broad accounting knowledge and specialized expertise in key areas.

Business Analysis and Reporting (BAR)

This section is for those who thrive on turning data into insights. It includes business analysis, data management, data analytic techniques, and financial accounting and reporting. It’s where technical accounting meets critical thinking, empowering you to derive meaningful insights from complex information and earn passing CPA exam scores.

You might choose this discipline if:

• You enjoy dissecting financial data to uncover trends and insights.
• Your strengths lie in synthesizing complex information to aid decision-making.
• You aspire to influence business strategies through robust financial analysis.
• You have a knack for connecting financial data with business outcomes.
• You aim to excel in roles that demand a deep understanding of financial reporting and analytics.

Information Systems and Controls (ISC)

In today’s digital age, understanding the role of information systems and their controls in accounting is crucial. This section covers information systems, organization controls, and systems and controls (SOC) engagements, preparing you for the challenges of ensuring data integrity and security.

You might choose this discipline if:

• You’re fascinated by the intersection of technology and accounting.
• You want to specialize in the rapidly growing field of information systems auditing.
• You’re keen on developing strategies to protect financial data.
• You are interested in learning about the latest systems and controls to enhance business processes.
• You’re aiming for a career where you can leverage technology to improve accounting practices.

Tax Compliance and Planning (TCP)

Tailored for future tax gurus, this discipline dives deep into tax compliance, federal tax planning, entity tax planning, and property transaction taxation. It’s your guide to navigating the intricate world of taxes, helping you devise strategies that can save your future clients time and money.

You might choose this discipline if:

• You’re drawn to the complexity and challenges of tax law.
• You aim to become an expert in tax planning and compliance for individuals and businesses.
• You enjoy helping others navigate the complexities of tax regulations.
• You’re interested in developing strategies to optimize tax liabilities.
• You see yourself as a future leader in tax advisory services, continually adapting to changes in tax legislation.

Final Thoughts

Armed with an understanding of the CPA exam structure, it’s time to take that bold step forward. Each section, from the core exams focusing on AUD, FAR, and REG to the discipline-specific exams like BAR, ISC, and TCP, is designed to challenge and refine your knowledge and skills.

In closing, as you prepare to take the exam with a CPA prep course, think of it not just as a test but as the first step in your adventure in the vast world of accounting. Each section you conquer is another peak scaled in your quest for excellence. With every question, every task-based simulation, and every study session, you’re building the foundation of a career that can take you to incredible heights. So, sharpen your pencils, power up your calculators, and let’s make those dreams a reality.

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