Which Parts Should I Take First?

January 1999 Issue
Which Parts Should I Take First?
By David Tajerstein, CPA

With New York as one of the few remaining states in which a CPA candidate can take fewer than four parts of the CPA exam at the initial sitting, the most common question posed to me is, "Which parts should I take first?"
The answer depends on a variety of important factors. If the potential candidates are graduating seniors, I always ask what courses they plan to take in their final semester. For example, if they plan to take taxation or governmental accounting, I recommend that they sit for the Accounting and Reporting (ARE) section of the exam. If they plan to take business law, I recommend that they sit for the Business Law and Professional Responsibilities (LPR) section. By trying to piggyback the end of school with the CPA exam, the candidates have the advantage of just finishing an in-depth college course and reviewing it for the CPA exam.
If candidates already possesses a college degree, I ask what line of work they are in. I recommend that individuals working as auditors in public accounting should logically take the Auditing (AUDIT) section because it has slowly shifted to more practical areas, as illustrated by recently released questions involving tick marks and accounts receivable confirmations. On the other hand, for those working in the private sector involved extensively in financial reporting it is prudent to concentrate on the Financial Accounting and Reporting (FARE) section.
When I sat for the exam 10 years ago, my peers took the equivalent of AUDIT and LPR first since these two parts were perceived to be the most manageable. Many candidates today still favor taking LPR first. Since it typically has the highest pass rate of the four sections, it is rare that a candidate leaves it as the final part. LPR consists of approximately 50 to 60 percent four-option multiple choice, 20 to 30 percent essay, and 20 to 30 percent other objective format questions. It is the shortest exam (three hours) and is given on Wednesday morning in May and November.
Many candidates take the ARE section of the exam along with LPR. Sixty percent of ARE covers federal tax laws, 30 percent covers governmental/not-for-profit accounting, and 10 percent covers cost and managerial accounting. ARE is the second shortest section (three hours) and is the only section that consists entirely of objective questions. Fifty to 60 percent are four-option multiple choice and 40 to 50 percent are other objective format questions; there are no essays or long computational questions. The ARE section is given on Thursday mornings so, if sitting only for LPR on Wednesday, one could go home and regroup during the 20-hour break between exam sections.
The FARE section encompasses a broad range of topics, containing both theory and calculations, and is the only section to include long computational questions (e.g., cash-flow statement preparation). It is four hours, given on Thursday afternoon. Due to the vast amount of material tested, I do not recommend that candidates take FARE at their initial sitting since it requires, in my opinion, the most devotion of time. Of course, if financial accounting is your forte, go for it.
The AUDIT section covers a variety of engagements including auditing, compilation and review, and attestation services. It has moved from textbook to workplace type questions and therefore it has become less predictable than in the past. AUDIT is four hours long, given on Wednesday afternoon.
In conclusion, I generally recommend that candidates take LPR and ARE first; however, it really is a matter of personal preference. *

David Tajerstein, of Person/Wolinsky CPA Review Courses^Ž, is a lead instructor for all four parts of the exam.

Home | About Us | Continuing Education | Future CPAs | Government Affairs | Professional Resources | Publications | Sound Advice | Tax Resources
Chapters | Committees | Member Center | Events Calendar | Classifieds | Careers | E-zine Subscriptions | The Trusted Professional | The CPA Journal

Search | Site Map | Become a Member | Jobs | Press Room | Contact Us | Feedback