You can do it online, in person or by watching a DVD. No, it's not a close encounter of the personal kind -- it's preparing for the Uniform Certified Public Accountant (CPA) Examination.
Pass the CPA test, fulfill education and experience requirements, and you qualify as a CPA in the 50 states, Washington, DC, and the US territories.
However, the CPA exam is tough. More people fail than pass each of the exam's four parts. According to the American Institute of Certified Public Accountants (AICPA), the cumulative passing rates for each part in 2008 were:
- Audit: 49.1 percent.
- Business Environment and Concepts: 47.49 percent.
- Financial Accounting and Reporting: 49.21 percent.
- Regulation: 48.74 percent.
So how do you make sure you pass? Heed these tips for prepping for the CPA exam:
Choose Your Accounting Program Carefully
Before you enroll in a college accounting program, find out what percentage of its graduates pass the CPA exam, suggests William Parrott, associate professor of accounting at the University of South Florida (USF) in Tampa. "We have a very rigorous program," he says. "The CPA exam scores [of our students] reflect that. The USF passing rate is number one in the country for graduates of the master's in accountancy program."
Match Your Prep Method to Your Learning Style
When considering a prep method, reflect on your accounting education, advises Andrew Temte, CFA, president of Kaplan CPA Review. If you learn best by reading, buy review texts or DVDs. If you lack motivation, the routine of in-person classes might be just the thing. Need a bit of each? Try an Internet-based course, where you read the textbook, watch a streaming video, and drill and practice online.
Shop Around for the Best Deal
Compare costs. Ask about passing rates, but be skeptical of the answers. Ask how the program has adjusted to the new four-part exam format. Does the company offer a money-back guarantee? What's the return policy on materials?
Companies offering CPA test prep include:
- Bisk Education
- Gleim Publications
- Lambers Review Courses
- Rigos Professional Education Programs
- John Wiley and Sons
If you're thrifty, check eBay and Amazon for used review materials. Be sure the materials are for the new, four-part test.
Put in the Study Time
Plan to spend 450 to 500 hours studying. That's 30 hours a week for 15 or 16 weeks, Temte says. "You have 18 months to pass all four sections after you pass your first, but if you don't meet this deadline, you start over from scratch," he says.
If you've been out of school for a while, you're probably an expert on one area of accounting. However, the CPA exam is a mile wide and an inch deep, so prepare to learn a lot of material -- just not in depth. "You do have to learn the material and not just memorize a bunch of factoids," Temte says.
Practice, Practice, Practice
Laura McClure, CPA, a staff accountant with Deloitte & Touche in Fort Worth and a top-10 scorer on the CPA exam in 2004, used the CPAexcel online review course. She also reviewed her college accounting textbooks during her daily studying sessions.
According to McClure, pacing is key. "There is so much information in each section," she says. "It is very difficult to cram it all in in one or two days. I went over all of the material for each section multiple times."
Simulate the Exam
Since the CPA exam is computerized, practice with a computerized sample test so the multiple-choice and simulation questions look familiar on exam day. "Case-based simulation, where you replicate real-world situations using spreadsheet, communications, research and resource materials, is 30 percent of the exam," says Dennis Green, CPA, director of Becker Professional Review. "So look for a provider who can give you a wealth of case-based simulations. It's not just knowing, but using the material to demonstrate your competence."
Leverage Free Resources
Use the AICPA's tutorials, and check out the National Association of State Boards of Accountancy's test-takers' tips.