Introduction
The CPA exam is a critical step for anyone wishing to become a Certified Public Accountant (CPA). It tests your knowledge of essential areas such as financial accounting, tax compliance, auditing, and business law, ensuring that candidates possess the necessary skills to excel in the accounting profession. Each year, updates to the exam reflect changes in the field, and 2025 is no exception. Understanding the CPA exam topics is fundamental for passing all four sections of the exam.
In this article, we’ll dive into the details of each CPA exam section, providing a comprehensive overview of the topics covered, the difficulty level of each section, and tips for how to approach your studies. We’ll also discuss common mistakes to avoid and answer frequently asked questions to ensure you are fully prepared for the exam. By the end of this guide, you’ll know exactly how to tackle each section and maximize your chances of passing.
Table of Contents
1. What Are the CPA Exam Topics?
CPA exam topics refer to the subject areas that are assessed on the uniform CPA examination. These topics are based on the AICPA (American Institute of Certified Public Accountants) Blueprints, which outline the knowledge and skills that every CPA candidate must demonstrate. The AICPA regularly reviews and updates these blueprints to ensure they remain aligned with current professional standards.
Each of the four sections of the exam—Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), Regulation (REG), and Business Environment and Concepts (BEC)—has a distinct set of topics. The CPA exam format includes a mix of multiple-choice questions (MCQs) and task-based simulations (TBSs) that test both theoretical knowledge and the ability to apply that knowledge in practical scenarios.
It is important to note that mastering the CPA exam topics is not about rote memorization; it’s about understanding the principles and how they apply in real-world situations. The better you understand the material, the more confident you’ll feel when taking the exam.
2. Full List of CPA Exam Topics by Section
2.1 Auditing and Attestation (AUD)
The AUD section focuses on auditing principles, procedures, and standards. The primary goal is to evaluate your ability to assess risk and perform audits according to ethical and professional responsibilities.
Key topics in AUD include:
- Ethics and Professional Responsibilities: You will need a deep understanding of the ethics governing the practice of accounting and the professional responsibilities related to auditing. This includes knowledge of the AICPA’s code of conduct, independence, and other ethical standards.
- Risk Assessment and Developing a Planned Response: One of the fundamental tasks of an auditor is assessing risks, which can include fraud, operational risks, or financial misstatements. Understanding how to assess these risks and develop a planned response is critical.
- Forming Conclusions and Reporting: This area covers how auditors conclude on the fairness of financial statements and the process of preparing audit reports. This includes familiarity with audit procedures, audit evidence, and the reporting requirements for financial audits.
For the AUD section, practice is crucial, especially with task-based simulations (TBSs), which test your ability to apply audit concepts to real-world situations.
2.2 Financial Accounting and Reporting (FAR)
The FAR section is one of the most comprehensive sections, as it covers various aspects of financial accounting and reporting. This section is often considered one of the hardest due to the sheer volume of content, but it is essential for anyone pursuing a career in accounting or finance.
Key topics in FAR include:
- Financial Reporting Frameworks: A core topic for this section is understanding various financial reporting frameworks, including Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). You’ll need to understand how to prepare and present financial statements based on these frameworks.
- Select Financial Statement Accounts: This includes understanding the various balance sheet accounts like trade receivables, inventory, property, plant, and equipment. Candidates are expected to know how these accounts are valued, reported, and disclosed in financial statements.
- Select Transactions: Key transactions include business combinations, lease accounting, and income taxes. It is important to be familiar with journal entries and how to record complex transactions.
- State and Local Governments: Unlike private businesses, governments have unique accounting requirements. You will need to understand the rules for government-wide financial statements and the accounting principles for state and local governments, including how to handle funds and reporting requirements for not-for-profit entities.
As FAR is a volume-heavy section, it’s important to break down the topics and prioritize areas like income taxes, financial liabilities, and revenue recognition accounting, which are frequently tested.
2.3 Regulation (REG)
The REG section focuses on taxation and business law, two critical areas for any CPA. This section tests your knowledge of the federal taxation system, business ethics, and the legal responsibilities of accountants.
Key topics in REG include:
- Ethics and Professional Responsibilities: Similar to the AUD section, you will need to demonstrate a solid understanding of the ethical obligations accountants have under tax law. This includes understanding the responsibilities when advising clients on tax matters.
- Federal Taxation of Individuals: This includes knowledge of tax filing procedures, deductions, credits, and the preparation of individual tax returns. Topics like federal tax procedures, personal financial planning, and taxation of income are key components of this section.
- Federal Taxation of Entities: Knowledge of corporate taxation, partnerships, and other entity-level tax issues are tested here. You will need to understand the tax treatments for corporations, including tax credits, deductions, and compliance requirements.
- Business Law: This includes key legal principles related to business operations, including contracts, bankruptcy, and agency law. Understanding business law is critical, as it helps CPAs navigate legal challenges in accounting and taxation.
Given the emphasis on federal taxation and business law, candidates should practice task-based simulations and multiple-choice questions that require application of these concepts.
2.4 Discipline Sections (Choose One)
In addition to the core sections, candidates must choose one of the following discipline exams to specialize in. The available options are:
Business Analysis and Reporting (BAR)
Key topics include:
- Financial Statement Analysis: This includes interpreting and analyzing the annual comprehensive financial reports of businesses to assess their financial health.
- Business Processes: Understanding core business processes and how they affect financial performance and reporting.
- Technical Accounting: This includes a deeper dive into technical accounting concepts such as accrued liabilities, debt, and business combinations.
Information Systems and Controls (ISC)
Key topics include:
- IT Governance and Risk Management: In today’s digital age, understanding IT governance is crucial. This includes ensuring that businesses have proper systems in place to manage risk and ensure data management security.
- Security and Privacy: Topics related to the security and privacy of financial data, especially when dealing with personal and business tax planning.
- Information Systems: This includes knowledge of how information systems impact business functions and financial reporting, as well as how companies manage and protect sensitive information.
Tax Compliance and Planning (TCP)
Key topics include:
- Personal and Business Tax Planning: Developing strategies to minimize tax liabilities for both individuals and businesses, ensuring compliance with federal and state tax laws.
- Property Transactions: Knowledge of how property transactions are taxed, including the sale of property and the treatment of capital gains.
- Entity Tax Compliance: Understanding the tax compliance requirements for business entities, including corporations, partnerships, and other business structures.
3. CPA Exam Topics Ranked: Which Sections Are Harder?
The difficulty of each CPA exam section can vary based on a candidate’s background and strengths. However, certain sections are consistently regarded as more difficult due to the complexity and breadth of topics.
- FAR (Financial Accounting and Reporting) is typically considered the hardest section due to its extensive coverage of financial reporting frameworks, balance sheet accounts, and government accounting.
- REG (Regulation) is also challenging, particularly for candidates who may not have a strong background in tax compliance or business law.
- AUD (Auditing and Attestation) is considered moderately difficult, as it requires candidates to understand auditing procedures and risk assessment principles.
- BEC (Business Environment and Concepts) is generally viewed as the least difficult, though it still tests critical concepts in business law, ethics, and financial management.
Understanding the relative difficulty of each section helps candidates prioritize their studies and allocate more time to challenging topics like FAR and REG.
4. Types of Questions Related to CPA Exam Topics
The CPA exam uses a variety of question types to test candidates’ knowledge. These include:
- Multiple Choice Questions (MCQs): These questions are designed to test your recall of key concepts in each of the CPA exam topics. They typically cover fundamental knowledge that is tested across all sections.
- Task-Based Simulations (TBSs): These questions simulate real-world accounting tasks and require candidates to apply their knowledge to solve complex problems. TBSs are particularly important in sections like AUD and REG, where application is key.
Understanding how topics are weighted and tested across these formats is crucial for effective preparation. Practice exams and review materials focused on TBSs and MCQs can help reinforce your understanding of the topics.
5. How CPA Exam Topics Are Weighted
The weight assigned to each topic varies by section and question type. For instance:
- FAR has a larger proportion of MCQs compared to TBSs due to its focus on theory and large volume of material.
- ISC typically has a higher proportion of TBSs, as it requires candidates to demonstrate how they would apply IT governance, risk management, and other technical concepts in real-world scenarios.
Understanding the weight of each topic within a section helps candidates allocate study time effectively, focusing more on higher-weight topics like income taxes, auditing procedures, and entity tax compliance.
6. Study Strategies for Mastering CPA Exam Topics
To succeed on the CPA exam, candidates should use a targeted study strategy:
- Use the AICPA Blueprints to structure your study plan. Ensure you cover every topic in the blueprints, as these are directly tied to the exam.
- Focus on high-weight topics: Prioritize areas like financial accounting, tax compliance, and ethics.
- Active practice: Engage in regular practice using TBSs, flashcards, and practice exams to reinforce your understanding.
7. Common Mistakes When Studying CPA Exam Topics
Some common mistakes candidates make when studying include:
- Memorizing rather than understanding: Simply memorizing facts won’t help you apply your knowledge in real-world scenarios. Focus on understanding the material.
- Neglecting updates: Stay informed about any changes in tax laws, business law, and financial reporting standards to avoid outdated knowledge.
- Skipping low-weight topics: Even though certain topics may not carry as much weight, they can still appear on the exam and make a difference in your final score.
8. CPA Exam Topics FAQ
- How often do CPA exam topics change? The topics are regularly updated to reflect changes in accounting standards, tax procedures, and financial reporting frameworks.
- Are all CPA exam topics equally important? No, some topics are more heavily weighted, and candidates should focus on high-weight areas during their studies.
- What are the most tested topics historically? Financial accounting, taxation, auditing, and ethics are consistently tested across all sections.
Conclusion
Mastering the CPA exam topics is crucial for passing the exam. By understanding the key areas of knowledge, focusing on high-weight topics, and avoiding common mistakes, you can greatly improve your chances of success. Use the AICPA Blueprints, engage in active practice, and stay updated on any changes to tax compliance, financial reporting, and business law. With focused and strategic preparation, you can confidently tackle all four sections of the CPA exam in 2025.