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AICPA FAR : CPA Financial Accounting and Reporting Exam

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Exam Number : FAR
Exam Name : CPA Financial Accounting and Reporting
Vendor Name : AICPA
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FAR test Format | FAR Course Contents | FAR Course Outline | FAR test Syllabus | FAR test Objectives

Within the Blueprints, you will find the following information for each test section:
Content organized by Area, Group and course along with score weighting
Sample task statements that represent what you may be asked to do when testing
Skill levels at which tasks are tested
Reference materials that support the trial task statements
Number of item types you must complete (multiple-choice questions, task-based simulations and written communication tasks)
Score weighting of each item type

Content area allocation Weight
I. Conceptual Framework, Standard-Setting and Financial Reporting 25–35%
II. Select Financial Statement Accounts 30–40%
III. Select Transactions 20–30%
IV. State and Local Governments 5–15%

Each test section is delivered in five smaller sections called testlets. Each testlet features different item types (see below) used to test your knowledge and skills. To learn more about how each section is organized, including when you can take a break, review the CPA test structure.

Exam Item Types
You will be tested during the CPA test using three types of test items that appear within specific testlets in each section.

Multiple-Choice Questions (MCQ)
The multiple-choice portions are presented in the first two testlets of each test section.

Task-Based Simulations (TBS)
Task-based simulations are condensed case studies that test accounting knowledge and skills using real life, work-related situations. All task-based simulations are intended to assess knowledge and skills that are appropriate for an entry-level accountant. There are three TBS testlets in the AUD, FAR and REG sections, and two TBS testlets in the BEC section.

Written Communication Tasks
Written communication tasks appear only in the BEC section of the CPA Exam. For each of three written communication tasks, you must read a scenario and then write an appropriate document relating to the scenario. The instructions state what form the document should take (such as a memo or letter) and its focus. Your response should provide the correct information in writing that is clear, complete and professional.

Each of the four test sections is broken down into five smaller sections called testlets. These testlets feature multiple-choice questions (MCQs) and task-based simulations (TBSs). In the case of BEC, you also have to complete three written communication tasks. The number of MCQs and TBSs tested varies depending upon the specific section taken. You will receive at least one research question (research-oriented TBS) in the AUD, FAR and REG sections. To complete them, you will have to search the related authoritative literature and find an appropriate reference.

During each test section, you will be offered a 15-minute break after the first TBS testlet. This is about midway through the section (two hours). You may accept this break and pause the test timer or you may continue testing. To accept the break, click the “Take a Break” button. During this break, you must leave the testing room and follow all Prometric security rules. The test timer will restart when the 15-minute break ends.

In addition to the 15-minute break, you may also take optional breaks after all other testlets but you cannot pause the test timer. The timer will continue to run.

The Financial Accounting and Reporting (FAR) section of the Uniform CPA Examination (the Exam) assesses the knowledge and skills that a newly licensed CPA must demonstrate in the financial accounting and reporting frameworks used by business entities (public and nonpublic), not-for-profit entities and state and local government entities.
The financial accounting and reporting frameworks that are eligible for assessment within the FAR section of the test include the standards and regulations issued by the:
• Financial Accounting Standards Board (FASB)
• U.S. Securities and Exchange Commission (U.S. SEC)
• American Institute of Certified Public Accountants (AICPA)
• Governmental Accounting Standards Board (GASB)
• International Accounting Standards Board (IASB)
A listing of standards and regulations promulgated by these bodies, and other reference materials that are eligible for assessment in the FAR section of the Exam are included under References at the conclusion of this introduction.
Content organization and tasks
The FAR section blueprint is organized by content AREA, content GROUP and content TOPIC. Each group or course includes one or more representative TASKS that a newly licensed CPA may be expected to complete in practice.
Tasks in the FAR section blueprint are representative. The tasks are not intended to be (nor should they be viewed as) an all-inclusive list of tasks that may be tested in the FAR section of the Exam. Additionally, it should be noted that the number of tasks associated with a particular content group or topic is not indicative of the extent such content group, course or related skill level will be assessed on the Exam. For example, the course titled “Notes to financial statements” in Area I includes two tasks that are intended to encompass the required disclosures for any course in the FASB Accounting Standards Codification, while the group titled “Leases” in Area III includes eight tasks that are limited to the accounting requirements in the Leases course of the FASB Accounting Standards Codification. The number of tasks included in the blueprint for this

group and this course is not intended to suggest that “Leases” are more significant to newly licensed CPAs or will be tested more than the “Notes to financial statements.” Similarly, examples provided within the task statements should not be viewed as all-inclusive.
Content allocation
The following table summarizes the content areas and the allocation of content tested in the FAR section of the Exam:
Overview of content areas
Area I of the FAR section blueprint covers FASBs Conceptual Framework, FASBs standard-setting process and several different financial reporting topics. The financial reporting syllabus include the following:
• General-purpose financial statements applicable to for-profit entities, not-for-profit entities and employee benefit plans under the FASB Accounting Standards Codification
• Disclosures specific to public companies including earnings per share and segment reporting under the FASB Accounting Standards Codification and the interim, annual and periodic filing requirements for U.S. registrants in accordance with the rules of the U.S. SEC
• Financial statements prepared under special purpose frameworks as described in AU-C Section 800 of the Codification of Statements on Auditing Standards Area II of the FAR section blueprint covers the financial accounting and reporting requirements in the FASB Accounting Standards Codification that are applicable to select financial statement accounts.
• To the extent applicable, each group and course in the area is eligible for testing within the context of both for-profit and not-for-profit entities. – If significant accounting or reporting differences exist between for-profit and not-for-profit entities for a given group or topic, such differences are in representative not-for-profit tasks in the blueprint.
Area III of the FAR section blueprint covers the financial accounting and reporting requirements for select transactions that are applicable to entities under the FASB Accounting Standards Codification and the IASB standards. • The testing of content under the IASB standards is limited to a separate group titled, “Differences between IFRS and U.S. GAAP.”
• To the extent applicable, the remaining groups in the area are eligible for testing within the context of both for-profit and not-for-profit entities. – If significant accounting or reporting differences exist between for-profit and not-for-profit entities, such differences are in representative not-for-profit tasks in the blueprint.
Area IV of the FAR section blueprint covers GASBs conceptual framework as well as the financial accounting and reporting requirements for state and local governments under the GASB standards and interpretations.
Section assumptions
The FAR section of the test includes multiple-choice questions, task-based simulations and research prompts. When completing questions in the FAR section of the Exam, candidates should assume that all of the information provided in each question is material. In addition, candidates should assume that each question applies to a for-profit business entity reporting under U.S. GAAP unless otherwise stated in the fact pattern for a question. For example, questions that apply to not-for-profit entities specify the nature of these entities
as “not-for-profit” or “non-governmental, not-for-profit.” Questions that apply to IFRS include phrases such as “under IFRS” or “according to IFRS.” Questions that apply to the state and local governments include phrases such as “local government,” “state,” “municipality” or “city.”
Skill allocation
The test focuses on testing higher order skills. Based on the nature of the task, each representative task in the FAR section blueprint is assigned a skill level. FAR section considerations related to the skill levels are discussed below.
Skill levels
Evaluation The examination or assessment of problems, and use of judgment to draw conclusions.
The examination and study of the interrelationships of separate areas in order to identify causes and find evidence to support inferences.
Application The use or demonstration of knowledge, concepts or techniques.
Remembering and Understanding The perception and comprehension of the significance of an area utilizing knowledge gained Remembering and Understanding tasks are in all four areas of the FAR blueprint. These tasks, such as identifying transactions and financial reporting requirements, frequently require newly licensed CPAs to demonstrate their comprehension of accounting concepts and standards. Area IV has the highest concentration of remembering and understanding tasks.
• Application tasks are in all four areas of the FAR blueprint. These tasks, such as preparing journal entries and financial statements, frequently require newly licensed CPAs to use accounting concepts and standards to measure and recognize financial statement amounts.
• Analysis tasks are in Area I, Area II and Area III of the FAR blueprint. These tasks, such as reconciling account balances, interpreting agreements and detecting financial reporting discrepancies, frequently require newly licensed CPAs to demonstrate a higher level of interpretation. Area I and Area II have the highest concentration of analysis tasks.
The representative tasks combine both the applicable content knowledge and the skills required in the context of the work that a newly licensed CPA would reasonably be expected to perform. The FAR section does not test any content at the Evaluation skill level as newly licensed CPAs are not expected to demonstrate that level of skill in regards to the FAR content.

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AICPA Reporting test success

5 assistance for preserving audit best nowadays and sooner or later | FAR braindumps and boot camp

The global pandemic brought unparalleled challenges to public enterprise auditors as neatly as the valued clientele and the public they serve.

"Audit groups have risen to the challenge and advanced," Kelly Grier, CPA, US chair and managing associate and Americas managing associate for EY, said Wednesday throughout a webcast backed by using the middle for Audit satisfactory (CAQ) and the U.S. Chamber of Commerce.

With the pandemic nevertheless posing dangers and the twentieth anniversary of the Sarbanes-Oxley Act (SOX) approaching next yr, certified shared insights on what will drive audit pleasant sooner or later.

main with aim

potent, coordinated regulatory requirements and unbiased oversight will continue to encourage self belief in audit best in the future, said Grier, who chairs the board of governors for the CAQ, which is affiliated with the AICPA. She mentioned leaders need to proceed advertising the values of independence, expert skepticism, and personal integrity.

Wes Bricker, CPA, PwC's vice chair–US have faith options co-chief, pointed out one of SOX's vital accomplishments become to toughen the significance of tone on the right and tradition by way of reinforcing the roles of the audit committee and administration, and requiring certifications on the accuracy of economic experiences and the effectiveness of the control device.

the upward push of far off work right through the pandemic has critical ramifications for leadership and culture, Bricker talked about.

"The potential to problem, the capacity to take into account distinct dimensions of effectiveness, to verify risk and design the right check, all of that comes collectively in the context of communique and culture within the audit firm and conversation with the audit committee it is engaged the audit enterprise," he said. "and that i do think that is a local for us to proceed to focal point on as they flow ahead."

Accelerating digital transformation

technology continues to supply auditors with alternatives to enhance their work.

Panelists noted FASB's new lease accounting normal for example of a chance for financial plan preparers to use know-how. computerized functions were developed to "examine" rent contracts and capture records for use in fiscal accounting techniques for reporting of lease property and liabilities.

meanwhile, auditors are the usage of expertise to investigate total sets of records instead of relying on sampling in their testing.

"it's a little bit like when the tide goes out, you see every little thing on the ocean floor," Bricker referred to. "you could see every little thing on the ocean flooring, possibly, by sampling. and that's the reason a central technique. but when you could take the entire water out or identify all of the transactions for your system, you can not handiest enhanced identify possibility … but that you would be able to additionally improved bear in mind the contours. What's the nature of the undertaking? What should still they center of attention on? What may still they be speaking about?"

Kathy Waller, former CFO of Coca-Cola, spoke of know-how can supply so plenty tips that it be less complicated to supply an opinion on the inside handle device and to comment on a broader set of issues. however she mentioned there are additionally dangers linked to expertise.

"We do should make certain that they don't seem to be going to be developing unintended penalties with know-how, for certain," Waller said. "… it be fairly exciting the manner it could go, however I suppose they do have to be cautious."

Investing in americans

Audit great is simply as potent as the people who function audit work daily, Grier pointed out. Amid the pandemic, personnel losses during what's been dubbed the great Resignation are difficult employers everywhere to retain the top of the line americans.

in the meantime, leaders of the CPA career are carrying on with to work to make certain the most fulfilling and brightest people are drawn to try this vital work.

"The talent pipeline doubtless is rarely as wide as they want it to be," Dan Goelzer, a founding member of the PCAOB, talked about all over a "hearth chat" with CAQ CEO Julie Bell Lindsay.

Audit companies can attract the most efficient americans and keep the skill they've by way of investing in studying and boom alternatives, Grier spoke of. She observed or not it's crucial additionally to rethink the pathway into the career.

The CPA Evolution venture undertaken via the AICPA and the countrywide affiliation of State Boards of Accountancy is designed to conform preliminary CPA licensure requirements to proceed the career's success in a swiftly changing marketplace. As part of that undertaking, a brand new model for licensure and a brand new CPA test are being developed for a deliberate launch in 2024.

constructing diversity within the career is also a key to performing wonderful audits, Grier mentioned.

"diverse teams are more ingenious and power audit first-rate with the aid of leveraging more than a few perspectives and skills to attain more suitable selections," she noted.

Modernizing exceptional administration systems

common setters are setting up new standards for enterprise satisfactory management systems with a goal of enabling better excellent.

The AICPA Auditing standards Board has proposed a brand new excellent management ordinary that's designed to allow firm management to tailor their first-class manage activities to tackle their individual, enterprise-particular risks.

"corporations are going to need to stop the use of kind of a guidelines approach to fine manage and [use] more of a method where they determine periodically what the precise challenges in their observe are and ensure they've measures to handle those challenges," Goelzer referred to.

specializing in independence

preserving a robust subculture of independence is crucial to protecting the general public's have faith, Bricker pointed out.

"Auditor independence, some most likely see it as a drawback; I see it as an important source of cost," he talked about. "or not it's auditor independence that permits buyers to have the self belief that somebody from the outside has appeared on the numbers, has regarded at the financial statements, has regarded at the disclosures. or not it's an important underpinning to the cost of the audit technique."

Waller, who chairs the audit committees of past Meat and Spelman faculty, stated that audit committees are extraordinarily dedicated to holding the best of the economic statements.

"therefore, independence of the audit committees and independence of the auditors is incredibly crucial," she mentioned. "None of us would ever permit if they saw it — and they are searching for it — undue have an impact on over the auditors by means of company personnel. Independence, to me, does say pleasant."

— Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is the JofA's editorial director.

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