Understanding the structure of each CPA exam section is essential for effective preparation. Each section tests different knowledge areas, uses different question formats, and requires different study approaches. This guide provides a thorough overview of all four sections so you can plan your study strategy with confidence.
The 2024 CPA Exam Evolution: A New Structure
The CPA exam underwent a significant restructuring in 2024, moving from the previous four-section format (FAR, AUD, REG, BEC) to a new three-plus-one model. Every candidate takes three core sections, then selects one discipline section. The former BEC section was retired, with its content redistributed across the core and discipline sections.
This new structure allows candidates to demonstrate specialized knowledge in their area of interest while still proving competency across the fundamental areas of accounting practice.
FAR: Financial Accounting and Reporting
FAR is the largest and most content-heavy section of the CPA exam. It covers the full spectrum of financial accounting and reporting for various types of entities.
What FAR Covers
- Financial statement preparation and presentation: Balance sheets, income statements, cash flow statements, and statements of equity under U.S. GAAP
- Select transactions: Revenue recognition, leases, stock compensation, income taxes, business combinations, and other complex transaction types
- Governmental accounting: Fund accounting, government-wide financial statements, budgetary accounting, and GASB standards
- Not-for-profit accounting: Financial reporting for nonprofit organizations, contributions, and net asset classifications
- Financial reporting frameworks: IFRS comparisons and special purpose frameworks
FAR Exam Format
- Total time: 4 hours
- 50 percent of score from multiple-choice questions (MCQs)
- 50 percent of score from task-based simulations (TBS)
- MCQs are presented in two testlets, with the second testlet adapting in difficulty based on first-testlet performance
- TBS testlets include research tasks requiring you to search authoritative literature
Why FAR Is Challenging
FAR has the broadest content scope of any section. You need to understand accounting for commercial entities, governmental entities, and not-for-profit organizations. The sheer volume of standards and rules you must internalize is daunting. Additionally, many of the topics, such as consolidations and governmental accounting, are areas that candidates may not have covered thoroughly in their undergraduate coursework.
AUD: Auditing and Attestation
AUD tests your understanding of the entire audit process and related professional responsibilities.
What AUD Covers
- Audit planning and risk assessment: Engagement acceptance, understanding the entity and its environment, assessing risks of material misstatement
- Audit evidence and procedures: Types of evidence, audit procedures, sampling methods, and analytical procedures
- Internal controls: Understanding, evaluating, and testing internal controls; communicating control deficiencies
- Forming conclusions and reporting: Audit reports, modifications, emphasis-of-matter paragraphs, and going concern evaluations
- Professional responsibilities: Ethics, independence, quality control, and professional standards
- Attestation and other engagements: Reviews, compilations, agreed-upon procedures, and attestation standards
AUD Exam Format
- Total time: 4 hours
- 50 percent MCQs, 50 percent TBS
- Same adaptive testlet structure as FAR
- Simulations often present audit scenarios where you must identify appropriate procedures, evaluate evidence, or draft report language
What Makes AUD Unique
AUD is more conceptual than FAR. Rather than performing calculations, you are evaluating situations and making judgments. Many questions present scenarios and ask you what should be done, what risk exists, or what type of report is appropriate. This requires a strong understanding of the audit framework, not just memorized facts. Candidates who struggle with AUD often do so because they try to memorize rules without understanding the underlying logic of the audit process.
REG: Taxation and Regulation
REG combines federal taxation with business law and professional ethics.
What REG Covers
- Individual taxation: Filing status, gross income, deductions, credits, AMT, and tax calculations for individuals
- Entity taxation: Tax treatment of C corporations, S corporations, partnerships, LLCs, and estates and trusts
- Property transactions: Basis, gains, losses, like-kind exchanges, and depreciation
- Business law: Contracts, agency, debtor-creditor relationships, business structure, and the Uniform Commercial Code
- Ethics and professional responsibility: Treasury Department Circular 230, AICPA Code of Professional Conduct, and licensing requirements
REG Exam Format
- Total time: 4 hours
- 50 percent MCQs, 50 percent TBS
- Same adaptive structure as other core sections
- Simulations frequently involve tax return preparation, tax research, and entity selection scenarios
Tips for REG
REG is unique because it includes both tax and law content. The tax portion makes up the larger share and requires detailed knowledge of tax rules and calculations. The business law portion is less math-intensive but covers broad legal concepts. Many candidates find REG more approachable than FAR because the tax topics often feel more practical and concrete.
Choosing Your Discipline Section
The discipline section is where the new CPA exam structure gives candidates a choice. You select one of three disciplines based on your career interests and strengths.
BAR: Business Analysis and Reporting
BAR focuses on advanced financial reporting and data analysis. Content includes technical accounting and reporting topics that go deeper than FAR, along with financial statement analysis and data analytics concepts. This discipline is well-suited for candidates pursuing careers in financial reporting, advisory, or corporate accounting.
ISC: Information Systems and Controls
ISC covers information technology governance, security, confidentiality, data management, and system operations. If you are interested in IT audit, cybersecurity, or technology consulting, ISC aligns well with your career path. It tests your understanding of how information systems support business operations and how controls protect data integrity.
TCP: Tax Compliance and Planning
TCP is the natural choice for candidates pursuing tax careers. It covers tax compliance and planning for individuals and entities at a deeper level than REG, including multi-jurisdictional issues, advanced entity taxation, and tax research. If you plan to work in a tax practice or specialize in tax advisory, TCP builds directly on the REG foundation.
Discipline Section Format
- Total time: 4 hours
- 50 percent MCQs, 50 percent TBS
- Same adaptive testing structure
- Content is more specialized and focused than the core sections
Question Types Across All Sections
Every CPA exam section uses two primary question types:
Multiple-Choice Questions (MCQs)
MCQs present a question stem with four answer choices. They range from straightforward knowledge recall to complex application and analysis questions. The adaptive algorithm adjusts difficulty based on your performance, so a harder second testlet is actually a good sign.
Task-Based Simulations (TBS)
Simulations are the CPA exam's signature question type. They present realistic work scenarios that require you to perform tasks like completing worksheets, reconciling data, researching authoritative literature, analyzing exhibits, or working through multi-step problems. Simulations test higher-order skills and are weighted equally with MCQs in scoring.
Time Management Across Sections
Each section allows 4 hours. With both MCQs and simulations to complete, time management is critical. A general guideline:
- Allocate roughly 1 to 1.5 minutes per MCQ
- Budget remaining time for simulations, with more time for complex ones
- Leave a few minutes at the end to review flagged questions
- Do not spend excessive time on any single question; flag it and move on
Planning Your Section Order
There is no required order for the CPA exam sections. However, strategic ordering can improve your chances of success:
- FAR first: Many candidates tackle FAR first because it is the most content-heavy. Getting it done while your study habits and motivation are strongest can set a positive tone for the rest of your journey.
- REG near AUD: AUD and REG share some content overlap around professional ethics and responsibilities. Studying them close together can reinforce common themes.
- Discipline section last: Since you choose a discipline aligned with your strengths, saving it for last means you end on a section where you may feel most confident.
Ultimately, the best order is the one that works for your schedule, strengths, and study preferences. What matters most is committing to a plan and sticking with it.
Think CPA provides structured study materials for every CPA exam section, organized by content area and question type. Whether you are starting with FAR or finishing up your discipline section, our resources are designed to help you prepare efficiently and confidently. Explore our section-specific study guides to start building your personalized exam strategy.