What it takes to pass the CPA Exam

Now that I've found out that I've passed the last section of the CPA exam, I thought I'd take a moment to re-cap the process. If anybody who is preparing for the CPA exam stumbles across this, I hope you find it helpful. For those non-accountant's (friends/family), this will give you more of a glimpse into what I went through. At the very least, this will help me remember everything later on down the road.

Alright, first thing you need to know about the CPA exam is that it is expensive. To get scheduled for the exam, you need to pay both an application fee and an examination fee with you first application. The fees break down as follows:

Application fee (non-refundable):                            $147.00

Examination Fee:
   Auditing and Attestation(AUD)                           $195.35
   Business Environment and Concepts(BEC)         $176.25
   Financial Accounting and Reporting(FAR)         $195.35
   Regulation(REG)                                                 $176.25

You can apply for more than one section at a time, but your application window is only open for six months. When that application window closes, you have to re-apply and send in another application fee (though slightly less than the first application fee).

Usually within two weeks or so, you will get a response back. If found eligible, they will send you a Notice to Schedule, which has the information needed to schedule your testing dates with the testing center.

Anyways, the first time around, I signed up for three sections (FAR,REG, and AUD). I was trying to keep the fees to a minimum by signing up for the most exams that I thought I could pass with in six months.  I ended up paying $713.95. The second time, I only had to sign up for BEC, which cost $234.25. So in total, I spent $948.20 on the actual exam.

But that isn't the only cost related to the exam. In order to pass, you need to purchase study materials. Now there are a lot of options out their in terms of CPA review material (self-study, classes, books, software, audio CD's, DVD's). There are some more well known materials, such as Becker and Gleim, but these tend to be more expensive (up to $3,000). I had discussed with some of my co-workers at the time what they had used. Most of them had used the BISK CPA review material and had success. BISK is more on the affordable side. For text books and review software for all four sections, I paid $702.45.

So in total, the CPA exam and review materials ended up costing me $1,650.65. Like I said, depending on what review software you use and how many application fees you end up paying, it could cost you much more.

Ok, the second thing you need to know is that studying for the CPA exam is very time consuming. Inevitably, there are people who think they can just study a little bit and be fine. They typically end up contributing to the low passing rates that the CPA exam is known for.

First thing I did was start by reading through all four books. This in itself was time consuming. At this point, I hadn't signed up for any particular exam. I was only trying to get a feel for the topics, the sections, and which I thought I would need to spend the most time on.

After reading through the books, I determined that I first wanted to take FAR. Based on what other people had said and based on the number and variety of topics covered, I knew this would be one of the more difficult sections, and I wanted to get it out of the way first.

My study pattern per section was basically this: I would go through every question on the review software for a section once, then I would go through them again (at least every other question). Monday through Fridays, I would try to study about 1-2 hours a night. On Saturdays, I would try to study about 3-5 hours. For FAR, I took probably about 4-5 months of focused studying. For REG I studied about three months. For Auditing, I only took about a month and a half. For Reg, I took about 2 months.

For the review software, each section had the following number of review questions.

AUD       830
BEC      1046
FAR      1749
REG      1339
Total      4964

Assuming conservatively that I went through every question once my first time through and every other question my second time through (often I did more), I reviewed questions 7,446 times. Very, very time consuming. Not saying everyone needs to study that much. This was simply my approach.

But it all paid off. My scores for the sections ended up being (note: 75 needed to pass)....

FAR     91
REG     82
AUD    89
BEC     92

Passing any one of the sections is a big accomplishment. If you don't believe me, below are the pass rates for each section for 2012.

UNIFORM CPA EXAMINATION PASSING RATES 2012

Section	First Quarter	Second Quarter	Third Quarter	Fourth Quarter	Cumulative
AUD	44.90%	47.81%	50.08%	44.15%	46.89%
BEC	48.63%	53.17%	57.63%	50.57%	52.83%
FAR	43.84%	46.49%	53.91%	45.53%	47.97%
REG	45.00%	49.62%	51.26%	46.02%	48.15%

So yeah, passing any given section is an accomplishment. Passing all four on your first try is an even bigger deal. Upon a quick search, I found statistics from anywhere to 3-30% of test takers accomplish this. The actual number is probably in the middle somewhere, probably around 20%. Not trying to brag (ok, maybe just a little). I'm just still really excited to be done.

That's it for now.

The Test That Could Decide It ALL

On Saturday February 16th, 2013, I once again drove to the testing center in GR to take yet another section of the CPA exam. Up to that point, I had taken and passed three out of the four sections. That meant that if I passed this fourth test, I would be FINISHED with the CPA exam. It is safe to say that I was very nervous and stressed.

I once again arrived early to the center and was able to start my test ahead of schedule.  Once through the ridiculously strong security process, I was led to my computer,  where I entered my launch code and began taking what could potentially have been my last test. This section was BEC (Business Environment and Concepts). It is basically a hodge podge of whatever wasn't covered on the other three sections. Some of the topics covered on the test included cost accounting, economics, finance, and information technology.

The first few questions seemed to be easy enough, and I was fairly certain that I was on track to pass by the end of the first testlet. That feeling quickly changed when I began the second testlet. The questions I received from that point on were absolutely insane. Unlike the questions on my review software, these questions expected me to have an in depth working knowledge of every minuscule detail and an ability to manipulate complex formulas. For all my test prep questions, a basic understanding of the formulas covered was more than enough to get a question correct. Once again, there were many many topics that I studied for that weren't tested at all, and things that I thought were unimportant were tested hard. In addition, I received several questions on topics that my test prep material did not discuss at all.

By this point in the test, I felt as if I had been beaten. I just wanted to give up. I really didn't think I was going to pass this one. I had the urge to stand up, throw the computer, and scream at the top of my lungs that "THIS ISN'T FAIR!" The test was definitely messing with my mind. I stuck with it and stuck with what worked for me in the past on the other tests. I went with my first instinct, and wouldn't second guess myself. I have been burned time and time again by second guessing myself out of a right answer in college. I made sure I moved at a steady pace, not letting myself get bogged down on any particular question. I probably could have stared at any one of those questions for an hour and not been any more confident about my answers.

In a fog of frustration and confusion, I made it through the three multiple choice testlets and through the three written simulation questions. I signed out, gathered my things, and walked to the parking walk with my head hanging low. There was NO chance that I had passed that torture they had the audacity of calling an exam.

Then to add insult to injury, I found out that I had left the lights on in my car. So my battery was dead. So I shamefully had to wait at the place of my defeat until road side assistance could come and give me a jump.

It was  a rough day.

That was about three weeks. I spent those three weeks enjoying what little freedom I had. I knew that at the end of those three weeks I would once again have to give up that freedom to study once more.

Last night, I was all anxious. I knew that I would get my results the next day. While we were driving to church, Jamie asked if I had checked the website. Sometimes the results get posted before they officially release the scores. I didn't know if I wanted to check. I wanted to live in blissful ignorance a little while longer.

But once that thought got put in my head, it slowly ate at my sanity. Once that thought was put in my head, there was no way I could wait. As we started small group, I discretely took out my phone and went to the nasba website. I entered my section number and birth date. I held my breath, said a quick prayer, and waited to be dolled out my fate.







The members of my small group said that the look on my face was a look of pure joy and utter relief.

I PASSED!!!!!!

I had passed, and I had passed by a fair margin. I really didn't understand. There was no way that was my score. I was so excited I was literally shaking.

I had managed to pass all four sections on my first attempt. This is a HUGE accomplishment (I'll do a post later on passed rates and the estimated percentages of people who accomplish this).

To be honest, I'm not sure it has really sunk in yet. I've basically been working towards this for the last 5 years of my life, and I've finally made it. I've finally reached the end of my academic career. To become a CPA was probably one of the most difficult things I have ever done, and I am extremely proud to have finally made it.

Here is to moving on and finally getting to live my life.

Enjoying my New Found Freedom

Usually about this time of year, I would be neck deep in audit planning and corporate tax returns. I would be going into work early, staying late, and working Saturdays.

BUT NOT ANY MORE!!!!!

HALLELUJAH!

With my new job, I can go to and leave work at a normal time. And working a Saturday would be very unusual.

So what am I doing with this new found freedom?

Enjoying every minute of it.

I've been able to take time to do things that I haven't been able to do much of in the last few years.

For example.... Snowmobiling.

Last Saturday, My dad and I went up to Reed City to get one last snowmobile trip in before spring hits. I met my dad a little after 5:30 am so we could get on the road and get up there decent on time. By 8:15, after a quick McDonalds dollar menu breakfast, we were unloading the sleds and getting bundled up, though apparently not bundled enough.

It was definitely cold. As we took off down the long straight stretch of trail which follows US 131 North towards Cadillac, I slowly began to loose feeling in my fingers. By the time we reached Cadillac, I could no longer feel my fingers. Thankfully, Dad couldn't feel his fingers either, so we stopped to warm them in the exhaust of the snowmobile. After a few minutes, I slowly regained movement of my fingers.

Besides the cold digits, it was a great day snowmobiling. We got an early enough start that the trails weren't very busy. As well, the trails were nice and smooth. There was only one brief section which wasn't groomed. For lunch, we stopped at the Wellston Inn. Unfortunately, it has become more and more run down over the years. Too bad. I used to enjoy that restaurant.

We kept a good pace, and by the end of the day we put on about 175 miles. Not too bad of a day in the lower peninsula.

Breaking the Air Wave Silence

So, It's been too long since I've written any thing on here. But now it's time to break the air wave silence.

So what have I been doing all this time. Basically working and studying. Since the New Year, work has been a little crazy, and I've spent most nights getting ready for my next and final test. Although there are much fewer chapters in this study book, it seems like there are many many more questions in every chapter. Sometimes, it has taken me almost an entire week to finish one chapter.

As of now, I've gone through every review question for this section once. And I plan to go through them at least once more before I actually take the test. But for now, I'm taking a break. Not going to touch the study materials at all this week end.

So far, I have spent this weekend relaxing, reading a good book, watching some netflix, and playing in the snow with Jonah and Jamie. Here are some pics from the afternoon. The light was amazing outside today.

Being bundled to the point of not being able to move has got to be frustrating.

One big happy family...

Now its time to enjoy some of my favorite pizza from the Trestle Stop.

I leave you with a random picture of an ice sculpture. Can you tell what it is?

75 Needed to Pass

A few weeks after you take a section of the CPA exam, you will receive a score release notification that reads something like this....

"You will receive separate score notices for each section of the examination you have taken. Each notice includes: examination identifying information (section name, section ID, and date); your score for teat examination section; and the result (Pass/Fail).

"Each notice also show credit status for the other examination sections you have taken... You will receive a separate notice for that section of the examination.

"The score represents your overall performance on the identified examination section. Scores are reported on a numeric scale of 0-99, with 75 as the passing score. This scale does NOT represent 'percent correct.' A score of 75 indicates examination performance reflecting a level of knowledge and skills that is sufficient for the protection of the public."

Well public, you can sleep easy. The Michigan Board of Accountancy has determined that I am no danger to you in regards to my auditing knowledge.

That's right, I have taken and passed (received a score of 75 or better) my third section of the CPA exam. This test section was Auditing. As usual, the test questions were very difficult. As I got further into the test, the test questions kept getting harder and harder. Now actually this was a good sign, since the CPA exam is a progressive test. Basically, if you do well on the first section, they will give you more difficult questions on the second section. I needed to keep reminding myself this, because by the end of the test, the questions were ridiculously difficult.

With this exam completed, I am 75 percent of the way through the entire testing process. I have completed and passed Financial Accounting and Reporting, Regulation, and Auditing. I only have one section left to complete: Business Environment and Concepts.

At this point, I am fairly confident in my study method for the exams. I am certain that I will be able to pass this last section if I put the same level of time and effort into studying for it as I did for the first three.

That being said, I am definitely losing motivation to study. After this last test, I took a week break. I didn't pick up the study material once. Let me tell you, it was glorious. So now, I am finding it harder and harder to come home after work and spend a couple hours going cross eyed reading about Keynesian Economic theory, marginal cost curves, and CVP charts.

Oh well, the end is in sight.

And the Winner is

ME !!

Every month, Eagle Nest Outfitters Inc. has a photo contest. As mentioned in another post, I love my ENO. I decided that I would enter the photo below into the contest.

And surprisingly, I won. You can see the announcement on ENO's blog here.

Better yet, as the winner, I was able to get $215 of ENO gear of my choosing. I decided to get a one-link sleep system (basically a hammock and tent combined).

So yeah, I'm pretty excited. I've never really won much in my life, especially not $215 worth of stuff. Big day for me, that's for sure.

A Very Thankful Video Friday

As I sit hear on the day after Thanksgiving, I find myself reflecting on the holiday which has just past. Truly, I have a very blessed life. I have a beautiful wife and a happy healthy growing boy. Even though I am one of the few people who had to show up to the office to day, I am very grateful for this job. It defnitely has been an answer to prayer. I am healthy and able to get out and enjoy being active. Whether its going out for a short run or hiking with the family, there are so many reasons to be thankful for being able to enjoy getting outside.

I came across a short blog post this morning, and I enjoyed it. So I'm going to share it. I grabbed it from here, just to give credit where credit is due.

Being Thankful

by Annie Leonard

"If you ask people what they’re most thankful for in life, three things nearly always come out on top. Not their car (even if it’s a hybrid), their shiny new ultrathin laptop or a 700-fill-power goose down ski jacket. Surveys consistently find we’re most thankful for friends and loved ones, good health and the wonders of nature. What’s more, clinical studies show that gratitude is good for us. Grateful people are happier, less depressed, less stressed, more satisfied with their lives and better able to cope with problems. Being thankful even helps us sleep better.

It’s a good time, then, to ask: Why don’t we walk the talk?

The main reason, of course, is the blitzkreig of commercial advertising and marketing we’re bombarded with 24/7, which peaks at this time each year. Many of us respond by spending too much time and energy chasing more Stuff and not enough on the things we say we’re most thankful for. To put it in marketplace terms, we’re underinvesting in the things that pay the most dividends, while we overinvest in Stuff that actually threatens the things we profess to value. We have more and cooler Stuff than our grandparents ever imagined, but we pay the price – more time spent working and shopping and maintaining our stuff, much less time spent in leisure, recreation, community service and with friends.

As a nation, this imbalance is not making us happy campers. In the latest Happy Planet Index, the United States ranks 14th out of 143 countries. Costa Rica, where the Gross Domestic Product per person is about a fourth of the U.S., ranked first. (In a group of 20 rich countries, however, we are number one in poverty, income inequality, spending on health care and people who can’t afford health care, infant mortality, obesity and climate change pollution.)

What can we do to reset the balance? Here’s a start: this holiday season, choose family over frenzy. The day after Thanksgiving – so called Black Friday – is a perfect time to opt out of the consumer frenzy and focus on those things we’re really thankful for.

Revisionist history aside, Thanksgiving is a great holiday. Two full days when most Americans are liberated from work and school to gather around a table, break bread and share conversation with those we love. We get the chance to spend two days pausing, recharging, looking into the faces of loved ones rather than into our computer screens.

Instead, the day after Thanksgiving, many Americans will rise at dawn, drive to a mall and spend the day searching for sales on products we don’t really need and which don’t ultimately make us happy. This year, let’s instead focus on the things that make us most thankful. Stay home, unplug the computer and the TV, bring out the board games, play touch football, walk the dog, take a hike – do anything but join the shopping frenzy. You’ll be thankful you did."

 

I would suggest taking some time today and thinking about what the Thanksgiving holiday is truly about, because you weren't likely very thankful yesterday watching the Lions lose. Come up with a list of things you are REALLY thankful for. Most likely, the new flatscreen that you waited in line for days to get probably won't make the list.

 

So I'm going to share something that I am truly thankful for: Michigan Winters. Now for all you complainers, you can just move to a different state. Because if you live in Michigan, you should really learn to love snow, otherwise you are just missing out. And the best part about this year is that I should actually be able to get out and enjoy it. There are so many fun and exciting things to do in winter in this great state of ours. And here are just a few.

 

Now look at that, I start writing about snow, and a few flakes start falling.