What CPA Exam to Take First
The CPA exam is one of the most difficult exams to pass, so it pays to develop a test-taking strategy to give yourself the best possible chances of passing each section of the exam. It’s important to note that once you pass an exam section, the clock starts ticking. You must pass the remaining exam sections within eighteen months or you will lose credit for the first exam section you already passed.
Most instructors and industry experts recommend starting with the most difficult exam section. The reason for this is partly psychological and partly practical. As a practical matter, passing the hardest section first alleviates some of the pressure to pass the remaining sections within the required eighteen month time frame. Psychologically, putting the hardest exam behind you can be a relief as well as a confidence builder.
So, which section is the most difficult section to pass? Some students try to focus on their individual strengths and weaknesses, but the better strategy might be to defer to the experience of others and start with Financial Accounting and Reporting (FAR). The vast majority of students and instructors feel that the FAR section is the hands-down hardest and passing rates seem to back that up. According to the American Institute of CPAs, the FAR section of the exam had about a 45% pass rate for the first 2 quarters of 2012, which is the lowest rate among the four sections. To be exact, the pass rate was 46.49%.
FAR is extremely challenging mostly due to the variety and volume of information you need to remember. The exam itself also is one of the two longest. Students often struggle with FAR due to the scope of material covered. They also find that the simulation-format questions can be particularly challenging and the multiple choice questions require detailed calculations. Another good reason to tackle FAR first is that most test takers are recent college graduates and are therefore best prepared for audit, tax, and finance topics because they recently completed coursework in these areas. Many CPA candidates feel that FAR not only tests general accounting practices, but also your determination to become a CPA.
When developing a testing strategy, it’s important to consider how the individual exam sections work together. For example, most students and instructors agree that by mastering many of the concepts and topics covered on the FAR exam, it helps them with the Auditing and Attestation (AUD) section as there is some overlap. In a similar fashion, Regulation (REG) and Business Environment and Concepts(BEC) are also highly related and should be taken in that order.
Ultimately, it’s up to each individual student to determine which section to start with. Once you develop a testing plan, it’s crucial to develop a study strategy in order to have the best possible chance of passing each section of the exam within the allotted eighteen month window. Don’t forget to factor in the testing windows and blackout months. The testing windows are the first 2 months in each quarter. The blackout dates are the 3rd month in each quarter. Once you pass an exam section, you will only have six other testing windows in which to pass the remaining three sections.