Are CPA examinations going out of style or going strong?


CPA holders are glorified and over-certified accountants but the demand for those who have undertaken the CPA exam questions, have doubled in the last decade. The global demand is driven by American companies, capping over billions per annum for this particular vocation.

However, recent publications are beginning to question the validity and necessity for CPA examinations and whether it is helping or hurting the industry. Some are going as far as to call it a scam.

In an opinion piece posted on Huffington Post, the writer praises the candidates that undertake the CPA exams for being highly motivated and dedicated individuals who should be commended for taking the examinations at all. However, the writer goes on to say that “CFA Institute is a scam of the highest degree” and should not be reflective of a person’s skills or talents because they allow candidates to retake the test as many as 50 times, and awards them the same certification as someone who passed the exam on their first try. This creates an illusion that everyone who has the certificate bears exactly the same capabilities, when it fact, it is a blanket to hide one’s shortcomings as long as they can bear the costs.

The CFA admits anyone – whether they hold a finance degree or one in the creative arts, or whether or not they have prior experience in a relevant field – into their examination halls and fails them when they don’t make the cut. However, the candidates are able to learn from their past mistakes and keep taking the test. There is a certain format to the examinations that potential candidates can study for. Therefore, so long as you have the basic mathematical skills and a high level of determination, there is no reason why anybody will not be able to obtain their certification.

However, it is an unpopular opinion as hopeful accountants flock to the examinations to receive their certification and start working for a firm. The exam takes up to 14 hours to administer and there are four testlets that focus on a different facet of being a public accountant. They are named accordingly: Financial Accounting and Reporting (FAR), Auditing and Attestation (AUD), Regulation (REG) and Business Environment and Concepts (BEC).

FAR is a 90 multiple-choice test on the financial reporting framework of business entreprises, ngos and government entities. There are also seven real-life work simulations to assess skills and knowledge on the various procedures that different institutes require. The candidates will be expected to prepare financial documents such as statements, balance sheets, cash flows and key in data into the necessary ledgers and books. They should also show familiarity for what accounting standards are used by which organizations and government bodies. According to test-takers, it’s the hardest part of the examination and candidates are allowed up to four hours to tackle this section, with a passing rate of 48.30% (as for 2019).

With a passing rate of 52.06%, AUD is another four hour, 90 multiple-choice test paired with seven simulations. Similarly, the candidate must demonstrate the knowledge of accounting standards, along with identifying what are unethical and determine the best course of action or solution to deal with such situations. It is largely a test on morals and practicality whereas FAR is more technical.

REG on the other hand, has a passing rate of 56.51% and only allows the candidate three hours to complete 72 multiple-choice questions and six tasks regarding “ethics, professional responsibility, business law, tax procedures and accounting” amongst other things in a similar vein. The candidate will have to show just how much they understand the law.

Finally, BEC, which is said to be the easiest testlet, has a passing rate of 60.45%. Another three hour paper, it also has 72 multiple choice questions but only has three written components. The administrators will focus not only on the candidate’s writing skills but also their approach, as the written components are a letter or memo simulation in a work environment. Aside from that demonstration of practical skills, the test taker must also show how well they can mitigate financial risks, communication errors and show how they can effectively execute operations and processes, along with the rights, duties and ethics of a working environment and its employees.

The test is then graded by the American Institute of CPAs and every candidate must score 75 minimum on each testlet in order to pass and they have to pass all four sections within 18 months. If the candidate is unable to pass all four testlets within that time frame, their results are reset and they have to retake it again. At this point, the demand for this particular vocation is growing steadily and is not likely to see a decline anytime soon as the services of a CPA are priceless.


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