Fail the CPA Exam? Action Steps to Pass the Exam
After my 4th call to technical support to fix an email issue, the customer service asks if I can stay on the line and take a survey about my satisfaction.
If it takes 4 calls, I’m probably not satisfied. It’s frustrating.
If you failed to pass the CPA exam, you’re not alone. It took me several tries before I passed, and thousands of others are in the same boat. The question is: what do you do now?
The experts at Universal CPA Review have some action steps that will help you get on your feet, and prepare to pass that darn CPA exam. You’ll find links to four videos below.
Let’s take it one test at a time.
Contents
Preparing for AUD
I think this test is the most difficult to study for, particularly if you took an undergraduate auditing course from an instructor who has no auditing experience. The only way to explain these concepts is using real-life examples.
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How do your explain internal controls when performing a physical inventory count? Only someone who’s performed a count (and probably seen control issues) can explain it clearly. I think auditing textbooks can be poorly written and not useful.
Here’s what you need: a solid example for each auditing issue you’ll face on the exam. Auditing is done by first working on each balance sheet account.
If you have an example for each common account (cash, accounts receivable, etc.), you can understand concepts and pass AUD. Internal controls and the auditing assertions (completeness, occurrence, etc.) are heavily tested.
If necessary, ask someone who has auditing experience for work examples. CPAs are always willing to help others pass the exam.
Getting your arms around FAR
Financial accounting and reporting (FAR) is a beast of an exam. It includes most of the number crunching on the exam, and FAR requires the most study time. If you didn’t pass FAR, not a surprise, but you can get over the hurdle.
As Universal CPA Review explains here, all you need is a 75%, so there is room for some amount of error.
Plan out your study time, and focus on one module (topic) at a time. When you’re studying a module, step back and think about where the topic fits into the set of financial statements. Treasury Stock, for example, is in the equity section of the balance sheet. Remind yourself of this fit whenever you start studying.
Don’t lose the forest for the trees. If you stick to a study plan, you can get through FAR.
Studying for REG
Regulation (REG) is the most technically demanding test, and it boils down to business law and tax concepts. You can overcome a poor business law instructor by using good test prep materials. Tax, however, has been the biggest study challenge for most exam candidates.
Personal tax questions make up the biggest portion of the tax section. I suggest that you print out a copy of Form 1040 and the supporting schedules (A, B, C, etc.). When you study a personal tax concept, find that topic in the tax forms.
If, for example, your answering a question on mortgage interest deductibility, find the mortgage interest deduction on Schedule A. Next, glance at Form 1040 to remind yourself where itemized deductions (totaled on Schedule A) are located on the 1040.
This approach helps you visualize where topics appear, and you’ll start connecting ideas.
Overcoming the BEC test
Business Environment and Concepts (BEC) tests many topics that a business major studies. Management, economic, and IT concepts are tested here.
To pass BEC, you need to think like a business manager, and ask yourself the why behind each concept. Let’s assume that you’re studying liquidity ratios and memorizing formulas. Well, why should you care about liquidity?
Firms that don’t generate sufficient current assets to pay current liabilities frequently run short on cash. They may have to raise capital by selling equity, or by borrowing money- both steps to avoid.
That is the why behind liquidity- and you should focus on the why for each BEC question. Think like a manager.
So, where do you go from here?
Get the tools to succeed
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Good luck!
Ken Boyd
Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies
(email) ken@stltest.net
(website and blog) https://www.accountingaccidentally.com/