If you’ve coasted through school most of your life and have an above-average intellect, then you might be tempted to assume that you can spend a couple of days studying for the CPA exam and then ace it. But we’re here to tell you this isn’t that kind of exam. You need to study – like really study – otherwise, you’ll be in for a rude awakening.
3 Reasons You Have to Study for the CPA Exam
In order to become a licensed Certified Public Accountant (CPA), you have to meet the required education, examination, and experience requirements as laid out by the governing bodies. And while it’s called the “CPA exam,” it’s really a series of four different exams.
You must pass each of the following: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).
The CPA exam is standardized for all candidates. However, the exact requirements regarding education and experience may differ slightly from state to state. You’ll have to check with the Board of Accountancy in your jurisdiction to gather the pertinent details.
But it doesn’t matter if you’re in Rhode Island, Kansas, or California; you have to treat studying for the exam like a full-time job. Here’s why:
1. There’s a Lot on the Line
You don’t add a CPA designation to your resume because you want some letters at the end of your name. It’s not some cute professional achievement that you decide to pick up in your spare time. This is a highly-respected license that will significantly impact the trajectory of your career. Here are a few examples of how this plays out:
- CPAs often earn $500,000 – $1 million-plus more in their careers than typical accountants. And though money certainly isn’t everything, there’s something to be said for earning a higher salary.
- When applying for jobs, having the CPA designation automatically moves your name to the top of the list. The same goes for internal promotions within your organization.
- The CPA title earns you a lot of respect. Instead of being seen as a number cruncher, people will view you as a strategic business partner.
There’s a lot on the line with the CPA exam. You’re not just adding a designation to your name. You’re permanently impacting the direction of your career.
2. Pass Rates Are Low
CPA exam pass rates are low. And while scores have increased slightly over the past year (likely due to the fact that people are spending more time at home), the exam is still incredibly difficult. In 2020, the cumulative pass rates were as follows:
- AUD = 52.84 percent
- BEC = 65.56 percent
- FAR = 49.98 percent
- REG – 62.29 percent
Historically, pass rates have been below 50 percent for the AUD, FAR, and REG sections. The BEC section is the only one that typically has a pass rate above 50 percent (though it’s usually below 60 percent).
3. You’re On the Clock
As if the pressure wasn’t already high, you have just 18 months to pass all four sections of the CPA exam with a minimum score of 75. As soon as you pass your first exam, the clock starts ticking. This means you have 18 months to pass the final three parts. A failure to do so within the allotted time will render your passing scores invalid, and you’ll have to start over. In other words, even if you pass three out of the four sections within 18 months, you’ll be forced to start over after the deadline passes.
In many ways, the pressure of the running clock is good. It gives you a built-in motivation and forces you to commit yourself to study with a top-notch CPA exam review course. And if you’re serious about the process, there’s no reason you can’t finish in less than a year.
Putting It All Together
The actual process of earning your CPA license is challenging. However, the path is quite clear. Here’s a step-by-step breakdown of what you need to do:
- Determine your eligibility by visiting the NASBA website.
- Submit your application.
- Schedule your first CPA exam section.
- Study for the CPA exam.
- Take the CPA exam
- Repeat steps 3-5 until all four sections are passed.
- Apply for your license.
That might look like a lot of steps, but there’s really only one thing that matters: passing the exam. And if you take studying seriously, you won’t have any trouble passing each of the four sections within the allotted 18 months. It’s time to buckle down and get serious!