Anyone that has passed the Uniform CPA Exam knows what a great feat they accomplished. The CPA Exam is considered by many to be the toughest and most rigorous professional exam in the world. The pass rate is just one indicator of this and despite having studied accounting for the better part of 4 years and having completed the required courses for graduation, the average pass rate for first time test takers is only about 50%. How can this be?
There are 55 U.S. jurisdictions that license CPAs. Each jurisdiction has their own requirements to become licensed, though most jurisdictions have adopted similar requirements. In order to sit for the CPA Exam, which is required to become licensed, one must complete 150 hours of college education. This generally amounts to a master’s degree. Some jurisdictions only require 120 hours of education, or a bachelor’s degree, but the trend is moving toward requiring a master’s degree. Some jurisdictions require educational hours in specific course topics, to ensure the student has received a versatile education in accounting topics.
The rationale behind all of these requirements is that any given student, after completing them, will be ready to become a CPA by sitting for, and successfully passing, the Uniform CPA Exam. Is this truly the case, or do students need additional training to help bridge the time between their college education and the successful completion of the exam? Given the less-than-stellar typical pass rates, the latter seems more accurate.
Is it that students are waiting too long after graduating before they actually sit for the exam?
Have they allowed their knowledge base to decrease over time before taking the exam? Can they recall their accounting knowledge today as easily as the day they graduated? Did they graduate, accept a non-CPA accounting job and then sit for the exam after a year of employment or more? Any of these scenarios could be a factor in the low pass rates, since most exam results turn out better if the exam is taken just after one has completed their education and training.
The American Institute of CPAs, which creates and grades the Uniform CPA Exam, recommends students study an average of an additional 300 – 400 hours prior to sitting for the exam. This indicates that regardless of the education a student has, there is still a lot more practical information to learn in order to pass the CPA Exam.
Perhaps the 50% of test takers that are failing the exam have studied on their own, thinking their knowledge base is simply good enough to allow them to pass the exam. Maybe the 50% of test takers that are failing have used a CPA review program but did not take it seriously. Or, perhaps they graduated and immediately sat for the exam without any further preparation even though the AICPA suggests it.
There are a number of “what ifs” but the fact of the matter is that 50% of test takers are failing.
This is why it is critical that students consider using a reputable CPA exam review provider – one that has a documented track record of successfully helping students pass. Because any of the 4 sections of the exam has a pass rate of about 47 to 50%, it makes perfect sense to choose a review provider who offers courses and course types that cater to the learning needs of each student. If pass rates on any section of the exam were higher, utilizing a review provider might not be necessary, but this is simply not the case.
The CPA Exam is expensive. There are fees to apply to take the exam, fees for each section of the exam, and fees that apply if you didn’t pass a section and need to retake it. Not to mention additional licensure fees. Because of the cost associated, it is in your best interest to pass each section the first time around. Before you consider applying to take the CPA exam, contact a CPA Exam Review provider to help consider your strengths and weaknesses. This will ultimately determine whether or not you pass the exam on your first attempt, or you end up in the 50% that fail the exam and are forced to take it again.
Grant Webb is an avid writer and reporter of accounting industry news. He enjoys writing about accounting fraud, education, certifications that will help increase compensation, and career development.