All that hard work has either really paid off or was the biggest waste of time in your life.
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All About the Regulation Section of the CPA Exam
- Adrienne Gonzalez
- April 27, 2010
Editor’s note: this is the second in our 5-part series this week on the CPA exam. You can find Monday’s Auditing and Attestation breakdown here and stay tuned for the other two parts as well as an ethics wrap-up later in the week. As always, if you have a CPA exam question for us, get in touch.
So, let’s talk Regulation!
Good news: Like Audit, REG tends to have a slightly higher national pass rate than other sections (specifically BEC and FAR) and though business structures can drag, the tax stuff is fairly cut-and-dry. You won’t have to remember tax numbers as most of this information is provided so don’t obsess too much over specific numbers for the year, just stick to the concepts!
Bad news: Business structures can drag and the tax stuff is cut-and-dry. This means Regulation can be one of the most difficult sections to motivate yourself to study unless you are really, really into taxes.
Regulation is a 3 hour exam and is the only section to consist of three testlets of 24 multiple choice questions each (as opposed to other sections which contain 30 MCQ in each testlet). Because it is a shorter exam compared to other sections, that means that you have about 1.25 minutes to complete each question (30 minutes per testlet, leaving you 45 minutes for each simulation).
The AICPA BoE has set the following target weights for skills testing:
Communication (0% – 14%)
Research (9% – 19%)
Analysis (13% – 23%)
Judgment (8% – 18%)
Understanding (45% – 55%)
Based on the Content Specification Outlines, Regulation covers the following areas:
Ethics and professional responsibility (15% – 20%) Professional conduct, independence, confidentiality, due care… you know, all the good stuff that makes you a CPA. Keep in mind this area will no longer be covered in REG after 2011.
Business law (20% – 25%) Formations and terminations of businesses, authority of agents and principals, debtor-creditor relationships, government regulation (federal securities acts – heavy tested!!), negotiable instruments, insurance.
Federal tax procedures and accounting issues (8% – 12%) Just as it sounds, this area covers federal tax procedures as well as cash, accrual, percentage of completion, contract and installment sales.
Federal taxation of property transactions (8% – 12%) Assets, depreciation and amortization, exchanges, and capital gains.
Federal taxation – individuals (12% – 18%) Gross income, pass-through entities, exemptions, AMT, retirement, estate and gift taxes.
Federal taxation – entities (22% – 22%) S-Corps, partnerships, LLCs, LLPs, and trusts.
Studying for REG should take between 80 and 100 hours depending on how familiar you are with the concepts before you begin studying and your professional experience with the material. Obviously if you work in tax you’ve got a leg up and can spend a little less time reviewing taxation.
Good luck and join us tomorrow as we review BEC!
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The Second Batch of CPA Exam Scores Has Been Released for the October/November Testing Window
- Caleb Newquist
- November 26, 2012
For those of you whose lives have been revolving around the chase of the most […]
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Let’s Talk the CPA Exam
- Adrienne Gonzalez
- August 26, 2009
Disclaimer: Author is Project Coordinator/new media scientist for a leading CPA Review course. She’ll try her best not to bash any competitors (*coughthismeansyouTimGeartycough*)
Let me start this by saying we have a problem in the accounting industry. I’m not sure if it starts with the accounting professors or the firms, nor am I sure whether or not it is even fair to blame the powers that be over the accountants themselves but there seems to be an overwhelming thread of apathy and fear dominating professional licensure.
More, after the jump
Some facts are unavoidable; firms don’t always support the journey to CPA licensure (let’s face it, it isn’t exactly an easy trip), accounting professors don’t always prep future grads for the careers they are about to embark on and of course the AICPA Board of Examiners complicates things by throwing curveballs like new pronouncements and a laundry list of changes to exam content that pile up every six months. Who can keep up?
Well that’s the candidate’s job, isn’t it? Is this what you wanted to do with your life? Is this the path you took?
Of course it is, if it weren’t such a long, drawn-out process we’d have way more CPAs running around signing off on half-assed audits and trying to claim a client’s parrot as a deduction. Firms hate to think that they aren’t getting all of your blood, sweat, and tears; knowing that the exam will likely take all the good brain cells an accountant has left, they hate to see their new hires buried in Financial Accounting and Reporting. Why?! Don’t they want qualified professionals on their payroll? Well yes. To hear the firms tell it, new hires are the ones dropping the ball.
I can’t say why the Big 4 and beyond make it appear as if they do not support licensure. I do know that in the last two years I have personally witnessed a critical shift in the industry; whereas once upon a time the they just wanted a warm body in the chair to push buttons, they are now looking beyond “mediocre” and towards ambition, which inevitably leads to certification. The days of stumbling up the corporate ladder to manager without a CPA license are over and frankly I couldn’t be happier to see that shift.