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Helping Employees Prepare for the CPA Exam

Gusto Editors  
Helping Employees Prepare for the CPA Exam

If you’re an aspiring accountant, you might be wondering: How hard is the CPA exam, and what’s the best way to prepare for it? Likewise, hiring managers might be wondering how to find candidates with the best CPA exam scores, while executives might want to know how they can support the aspiring certified CPAs already serving their team.

Our webinar, “Love and the CPA Exam: How to Build an Emotional Support System in Your Firm,” is all about cultivating a healthy, supportive workplace to ensure optimal performance and productivity. (We love this topic, since Gusto is all about creating healthier, happier workplaces.) During the webinar, speaker Amber Setter not only discussed workplace health and wellness, she also covered the CPA exam, what candidates need to do before they can sit for it, and how they can best approach it.  

Amber is a leadership coach, an actualization coach, and a certified, non-practicing CPA. Her unique offerings center around her ability to bring a truly holistic model of awareness to organizations in tangible ways. Amber was excited to share her knowledge with emerging accountants everywhere. 

Preparing for the CPA exam

To support your aspiring CPAs, you’ll have to do more than just help them prepare for the test: you’ll have to help them gather everything they need to be able to sit for the exam, too. Amber explained that the requirements to even sit for the CPA exam can be quite nuanced, and can vary from state to state, which can get really overwhelming for test-takers. 

“Now, first and foremost, I want to say that there are definitely going to be a lot of nuances. The CPA is regulated by different jurisdictions. Jurisdictions are going to be the 50 states in the US as well as different territories like Puerto Rico or Washington DC.”

Amber Sutter

One consistent thing? Education requirements. Amber shared that accountants must have 150 college semester hours, or 225 quarter units, in order to sit for the test.

Aspiring accountants must also fulfill work requirements. Again, these vary by state. For example, to sit for the CPA exam, some states require work experience in the field you’ll be getting certified in. So in California, if you’ll be signing off on attestation reports, you’ll need to have work experience in that field. There will also be other factors included in each state’s requirements, such as ethics exams and fingerprinting.

Navigating all of this can be tricky, according to Amber. That’s why she emphasized the importance of knowing all of the players in the exam world. 

Woman sitting in an open are with laptop and headphones in study for an exam

“When we look at the CPA exam, there are a lot of different players. The exam content is actually written by the AICPA, but the exam is administered by NASBA, the National Association of State Boards of Accountancy. When a candidate is approved by their state, then they need to go to NASBA and do some stuff there and get some different forms from them, and then they go and actually take the exam.”

Amber Sutter

Given the complexity of this process, Amber advises firms to have an employee dedicated to helping accountants navigate the system.

“It might help you if your organization has one person who really knows the process inside and out. Or maybe you set up some form of mentoring relationship from staff to staff. Because I’ll tell you— things change. There are a lot of nuances. Somebody who has recently gone through the process can really share that wisdom back with your candidates. It’s very intricate. It’s very detailed. It can be confusing, and again, maybe you want to set up that mentoring relationship in your firm to provide guidance to those going through the process.”

Amber Sutter

Amber’s advice to cultivate mentoring relationships reflects the values held here at Gusto. Staff members should be well-resourced and have all the knowledge and support needed to navigate complex or confusing situations. It’s in an environment like this that professionals can do their best work, make their most meaningful contributions, and launch their firm to new levels of success.

CPA exam sections

The exam consists of four sections, and candidates are given four hours to complete each one.  It’s important to be aware that the CPA exam sections do not follow a prescriptive order. Candidates can take the topics in any order they choose. And they do not need to take it all at once. In fact, it’s advisable not to.

The exam consists of four sections:

  • Auditing and Attestation
  • Business Environment and Concepts
  • Financial Accounting and Reporting
  • Regulation

The Auditing and Attestation (AUD) portion covers the entire auditing process. This includes auditing procedures and generally accepted accounting standards, such as those related to attest engagements or the AICPA code of professional conduct

Amber shared that the Business Environment and Concepts (BEC) section has a general reputation for being one of the easier exams. It also serves as a catch-all for a number of assorted accounting-related processes. 

“I also like to call it the junk drawer, because there’s just a lot of unrelated content areas thrown into this exam. It covers business context concepts and the significance of a CPA’s professional duties and responsibilities within the larger context of the business environment. Again, lots of just random topics, not stuff that’s necessarily woven together like you might see in the other exam areas.”

Amber Sutter

Next up is the big one: Financial Accounting and Reporting. This one is the beast. It most commonly goes by FAR or FAIR. 

“This is the greatest challenge. It is considered the most comprehensive and difficult section of the exam. It requires candidates to have solid knowledge of GAAP, including concepts and standards for financial statements, typical specific types of transactions and events. It also has governmental entities and accounting for non-profits and non-governmental. Very, very big, very comprehensive, a lot of the stuff that a candidate saw when they took the intermediate courses as well as the not-for-profit and special topics. Lots of classes fall into that section.”

Amber Sutter
Woman Sitting at Desk with window beside her study for an exam

The final section is Regulation (REG) which, according to Amber, focuses on federal taxation, business ethics, legal considerations, and professional responsibilities. Candidates who have just completed work that pertains to this portion of the exam, such as tax season, should try and take that portion right away, while the information is fresh in their minds. The same goes for candidates who recently completed coursework in this area, such as in auditing.

CPA exam pass rates

Understanding the CPA exam pass rates can help you support your aspiring CPAs better, by helping them know what to expect. However, it can also help you as a hiring manager if you’re trying to recruit top CPAs in the field.

The American Institute of Certified Public Accountants (AICPA) regularly publishes pass rates which, according to Amber, regularly hover around 50%.

“You’ll see lows and highs, but statistically, for years and years—and I’ve been doing presentations like this since 2011—they’re always in this range of, I swear, 46 to 52 percent. I actually was surprised by those 56-percenters. That seems a little more of an anomaly, but that’s where they’re at.”

Amber Sutter

But what if you’re a hiring manager, and you’re interested in learning more about how your potential candidates have performed on the exam?

The National Association of State Boards of Accountancy releases a publication titled “Candidate Performance on the Uniform CPA Examination.” There is also a university edition of the publication, where hiring managers can see average exam scores at specific universities. Amber says this is a great way to boost your recruitment strategy, as it might give you some good ideas for universities to target with your recruitment efforts.

Learn more about supporting your CPAs

Becoming a CPA isn’t easy, but it’s worth it—whether you’re an accountant or someone in charge of hiring top candidates. Learning as much as you can about the exam and working to create a supportive environment for aspiring CPAs is a great start. If you’d like to dig even deeper into those topics, look out for our posts: “Core Changes to the CPA Exam” and “Building a Support System for Your CPA Candidates.”

Our goal is to create a world where work empowers a better life. It’s why we’re committed to making everything from payroll to benefits and taxes easier and more streamlined for employers and their staff.  We also provide tools that can help you grow your accounting practice and offer your clients more insights. Learn more, and sign up today. 

Updated: November 9, 2021

Gusto Editors
Gusto Editors

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