CPA Exam Pass Rates: What You Need to Know

If you’re considering a career as an accountant, you’ve probably heard of the biggest hurdle you’ll have to face in your career path: the CPA exam.

Pass rates vary by section, but unfortunately, most sections have a dismal pass rate.

However, I don’t want you to get discouraged! This article is intended to not only share the pass rates with you but to help you better prepare to face these numbers with confidence. I passed the CPA exam, and I know you can, too.

Without further ado, let’s dive in.

Key Takeaways

• CPA Exam Structure: The exam now includes three core sections (AUD, FAR, REG) and one chosen discipline section (BAR, ISC, or TCP).
• Pass Rates Vary: Historically, pass rates differ across sections, with FAR often having one of the lowest pass rates.
• Passing Score: A scaled score of 75 is required to pass each section.
• Data and Technology: Data and technology skills are now more frequently tested across all sections under the new CPA Evolution initiative format.
• Flexible Discipline Choice: Candidates can choose a discipline based on their interests to hone in on their desired career path.

New CPA Exam Format (2024 and Onward)

In 2024, the CPA Evolution initiative introduced a major overhaul of the CPA licensure model, recognizing the growing complexity of accounting and technology. This updated exam better reflects the current state of accounting and equips new CPAs with the knowledge to succeed in today’s rapidly evolving accounting world.

The CPA exam is now structured as follows:

• Three Core Sections: CPA candidates must pass all three Core sections—Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Regulation (REG).
• One Discipline Section: Candidates choose one of three specialized sections to demonstrate expertise in a specific area: Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), or Tax Compliance and Planning (TCP).

This model not only covers the primary need-to-know areas of accounting but also allows candidates to tailor their CPA licensure path according to their interests and desired careers.

However, don’t panic about choosing your discipline section because CPAs are not restricted to that field in practice. It may be helpful in the hiring process to have a relevant Discipline exam passed, but from my experience, having a less-aligned one shouldn’t hurt you. Every candidate is granted the same CPA license, regardless of their Discipline.

CPA Exam Sections and Their Pass Rates

Let’s look at the CPA exam pass rate for every section of the exam from the most recent AICPA report under the new core plus discipline model, along with what you should expect to be tested on:

1. Auditing and Attestation (AUD): This core section tests auditing processes, ethics, and standards. The AUD CPA exam section had a 46% pass rate for the first quarter and second quarter of 2024.
2. Financial Accounting and Reporting (FAR): As one of the toughest sections, FAR covers extensive material, including financial reporting frameworks and governmental accounting. In Q1 and Q2 2024, FAR had a 41% pass rate.
3. Regulation (REG): REG tests candidates on tax compliance and business law. In 2024, students did comparably well on this section compared to the other two Core sections, with a 63% pass rate.
4. Discipline Section: Candidates choose between BAR, ISC, or TCP depending on their preferred focus area:
   • Business Analysis and Reporting (BAR): BAR involves advanced financial analysis and business reporting standards. Q1 and Q2 2024 show a low 41% pass rate.
   • Information Systems and Controls (ISC): This section focuses on data, technology, and information systems security. ISC has a cumulative pass rate of 56% for Q1 and Q2 2024.
   • Tax Compliance and Planning (TCP): Finally, TCP focuses on in-depth tax planning and compliance strategies. TCP shows the highest success of any section, based on data from the first and second quarters of 2024, with a 78% pass rate.

Each section combines multiple choice questions (MCQs) and task-based simulations (TBS) to assess both theoretical knowledge and practical application.

The Elijah Watt Sells Award

If you have an ambitious streak, you’re in luck. The AICPA, the organization that offers the exam and licenses certified public accountants, offers an award for top performers on the exam. Named after one of the first CPAs, the award not only encourages excellence but also helps honor students likely to become ambassadors of the industry.

In 2023, of the 86,000 candidates who took the exam, only 40 received this prestigious award–less than 0.05%. As a result, it’s a huge boon to your resume and, as a result, your accounting career.

Requirements include:

• A cumulative average score over 95.5 on the three Core sections and the Discipline section of your choice
• Pass every section on your first attempt

Though it’s extremely unlikely to earn the Elijah Watt Sells Award, if you’re an excellent test taker, it’s definitely worth pursuing.

How CPA Exam Pass Rates Impact Your Strategy

Knowing the historical CPA exam pass rate for each section, and especially your chosen Discipline, can help you prepare more effectively.

For example, since FAR has consistently been the toughest section, you may want to dedicate more study time to it compared to others. Further, of the three Discipline sections, TCP has almost double the pass rate of BAR, so it may be the perfect choice for students who struggle with test-taking. There’s no shame in taking an easier Discipline with the goal of passing the CPA exam on your first try! In fact, I think it’s smart because you can allocate more time to the more difficult core sections.

Another important factor to consider is the scoring system. The CPA exam is graded using scaled scores, meaning that the relative difficulty of the questions you answer affects your final score. You need a CPA exam score of 75 to pass, but this doesn’t mean you need to get 75% of the questions right—just a balanced performance across the various components of the exam.

Preparing for the CPA Exam Under the New Format

With the changes in CPA Evolution, CPA candidates must now be proficient in data analytics and technology. The exam incorporates higher-order thinking skills across all sections, so you’ll need to focus on more than just memorizing content—you need to understand how to apply concepts to real-world scenarios.

Using a CPA review course can be extremely helpful in navigating these new requirements. I certainly wouldn’t have passed without the help of expert guidance and tons of practice hours with top-tier study materials.

Here are some of my top tips for CPA exam prep:

• Look for materials that emphasize both the MCQ and TBS portions.
• Ensure your review course covers the new sections.
• Study under expert instructors who have a CPA certification of their own, so they have familiarity with the structure and what it takes to pass.
• Develop a study plan and start early–many students study for hundreds of hours to pass.
• Choose a CPA prep course with adaptive learning technology (a fancy way of saying that the course can track your progress, strengths, and weaknesses for more effective study sessions).

Conclusion

The CPA exam is notoriously difficult, with pass rates as low as 41% per section. However, success is possible–it’s a matter of both preparation and perspiration.

Understand the CPA exam scores and the scoring system, focus on your weakest areas, and take advantage of updated CPA review materials tailored to the new exam structure. The CPA Evolution initiative is designed to ensure that newly licensed CPAs have the skills needed for modern accounting, so stay on top of these changes, and you’ll be well on your way to success.

I wish you the best of luck in your CPA licensure journey. You got this!

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