The CPA REG exam is a beast for many candidates, especially for those with only an accounting background. In this article, I am going to share with you my experience on how to study and pass REG on my first attempt, despite that fact that I have neither the interest nor the expertise in this subject.

What Does The CPA REG Exam Cover?

For the CPA REG Exam, Ethics and business law comprises of 35-45% of the exam, and federal taxation comprises the rest of the 55-65%. As you can see, it is critical that you get familiarize with taxation on individuals, property and entities together with the procedure and related accounting issue. At the same time, it is important to understand the business law and ethics.

In terms of the format, it is a tough 3-hour exam including 3 testlets of multiple choice questions (i.e. 3 sub-sections of 24 questions each, totalling 72 questions). There is another section known as the "simulations" where you will be requested to work on a written communication assignment, a couple of research tabs and a few miscellaneous condensed case study questions. The multiple choice, written communications and the rest of the simulations represent 70%, 10% and 20% respectively of the examination. Please note that everything in the test is presented in a computerized format.

What Is The CPA REG Exam So Difficult?

First of all, the overall CPA exam pass rate is low -- it hovers around 50% every year. Within the REG section, the pass rate used to be even lower: for example, in 1Q05, it was a chilling 35%, but since then the pass rate has gradually moved towards 50%.

CPA REG Study Tactics

1. Set Aside Sufficient Time For Your Study

This may sound cliche, but I have hard data to prove why it is so important. As mentioned above, the REG pass rate has seen an encouragement improvement despite the fact that it isn't getting any easier than before. In my opinion, the reason is that the new computerized exam has allowed candidates to take the 4 sections one at a time and on their own schedule. This flexibility has helped candidates to set aside more time to study for the more difficult sections. In fact, the other "harder" exam, FAR, has also seen a similarly marked improvement (around 15 percentage point increase) since 1Q2005 when the computerized format was introduced.

Based on this statistics, candidates can significantly increase their chance of passing success if they find the time to finish their study, work on all the practice questions, and concentrate in tackling one section at a time.

2. Time Management

Many candidates bomb the exam simply because they run out of time. Please note that FAR and REG are the two sections that you need to pay extra attention in setting a time limit for each of the testlet, especially given the fact that these two exams are adaptive, i.e. the questions get progressively difficult if you are scoring well.

3. Don't Underestimate Ethics

While the section on taxation is critical, don't forget to spend sufficient time to go over ethics. With all the high-profile scandals in corporations in the past few years, I would think the examiners are putting more emphasis on this particular topic. It isn't difficult, but in a way it is more conceptual -- as if there are several correct answers but you have to pick the best answer. Some candidates are not familiar with this type of questions and they will have to allocate time for practice.

Your Next Step

If you find this article helpful, then you may want to check out this CPA REG Exam page where I elaborate the strategies in greater details.

You may also want to get more tips in passing the CPA exam, e.g. how to work on time management, how to ace simulations and other tactics in my CPA Exam preparation site, IPassTheCPAExam.com, where I share my own experience on how to plan, study and pass the CPA exam on my first attempt.

Best of luck to your CPA Exam. If I can do it, so can you!