FAR CPA Exam

Here we’ll go over a full review of the FAR exam including exam content, format, questions, scoring, and how to study for the FAR CPA exam to pass on your first try.

• FAR stands for Financial Accounting and Reporting.
• The FAR exam covers 3 main areas: Financial Reporting, Select Balance Sheet Accounts, and Select Transactions
• The FAR CPA Exam is 4 hours long.
• The FAR CPA Exam has 50 multiple-choice questions and 7 task-based simulations.
• FAR is the most comprehensive section of the CPA Exam.
• The FAR CPA Exam pass rate is around 45%.
• The FAR exam has the lowest pass rate of all 4 CPA Exam parts.

The FAR exam is the most comprehensive CPA Exam and requires a lot of number-crunching. Sticking to a solid study plan is the way to pass this exam, so let’s talk about the best way to study for FAR.

The best way to study for the FAR exam is to create a study plan and stick to it! This will help you see a clear path to success and alleviate anxiety surrounding the exam. A good study plan will include:

• Reviewing the CPA Exam Blueprints and making a study schedule
• Practice exams
• Journal entries and number-crunching
• Practicing time management (for question types, testlets, and the exam overall)

You can also always take the guesswork out of studying for the FAR exam by using a CPA Review Course. Most CPA Exam test prep providers, like UWorld CPA, will give you a customized study plan and access to a lot of helpful materials like video lessons, practice exams, and quizzes with practice questions.

In addition to creating a study plan, there are a few more FAR CPA Exam tips you can use to pass.

Take FAR as Soon as Possible

Taking the FAR exam ASAP is a good idea if you’re a recent college graduate because the accounting classes you took in the last few years of school will have helped prepare you for this part of the CPA exam (and the information is still fresh in your mind). You are also a test-taking pro while in college so taking FAR ASAP will ensure a high level of test-taking proficiency.

Master Microsoft Excel

One of the biggest challenges of the FAR exam is all of the number-crunching, so mastering Microsoft Excel can really come to your aid on exam day. You can use a simple calculator or scratch paper to work your equations, but using Excel is a much more efficient way to get through math problems.

Spend More Time on Governmental and Nonprofit Accounting

You likely didn’t spend much time in college covering governmental and not-for-profit accounting, which is why you should spend more time covering these topics in your study plan to pass the FAR CPA Exam. But don’t get overwhelmed. Focus on memorizing the different terminology and reviewing the material several times as needed.

Take CPA FAR Practice Exams

Practice exams are one of the most important tools you can use to prepare for the FAR exam.

Practice exams help you test your knowledge, apply your skills, build endurance, practice your time management, and more. And mock exams that mimic the exam interface will help you become familiar with the look and feel of the real CPA Exam.

This will help ease your anxiety on test day as the look and feel of the exam will be familiar to you.

Set Yourself up on Success for the FAR CPA Exam

Intense studying sessions need to be supported by an intense self-care routine. Taking care of yourself is critical to setting yourself up for success on the FAR exam. This means staying hydrated, exercising, eating nutritious meals, and getting enough sleep.

You will have to make some short-term sacrifices in order to earn your CPA license, but that doesn’t mean you stop taking care of yourself. It will all be worth it in the end—you’ve got this!

Here we’ll go over a breakdown of the FAR CPA exam content.
There are three main content areas tested on the FAR exam and each subject is tested to varying degrees.

• Area I: Financial Reporting 30-40%
• Area II: Select Balance Sheet Accounts 30-40%
• Area III: Select Transactions 25-35%

These topics are meant to cover the number-crunching that Certified Public Accountants will be doing,
especially as they start their career. Test takers will need to understand accounts and the recording of
transactions, master accrual basis accounting, and use formulas to complete day-to-day accounting tasks.

Within these topics, the FAR exam tests on:

General-Purpose Financial Reporting: For-Profit Business Entities	Cash and cash equivalents	Payables and accrued liabilities
General-Purpose Financial Reporting: Nongovernmental Not-for-Profit Entities	Trade receivables	Debt (financial liabilities)
Revenue recognition	Accounting changes and error corrections	Equity
State and Local Government Concepts	Inventory	Contingencies and commitments
Public Company Reporting Topics	Property, plant, and equipment	Accounting for income taxes
Special Purpose Frameworks	Investments	Fair value measurements
Financial Statement Ratios and Performance Metrics	Intangible assets	Lessee accounting and subsequent events

Candidates will be graded on their ability to demonstrate their skill level in remembering
and understanding, application, and analysis in the following percentages.

• Level I: Remembering and Understanding 5-15%
• Level II: Application 45-55%
• Level III: Analysis 35-45%

The FAR CPA Exam format will start with a welcome message followed by confidentiality and section information. You will then be able to continue into the actual exam that is divided into five testlets.

Pre-Exam:

• Section 1: Welcome and Launch Code
• Section 2: Confidentiality and Section Information

Exam:

• Testlet 1: 25 Multiple-Choice Questions
• Testlet 2: 25 Multiple-Choice Questions
• Testlet 3: 2 Task-Based Simulations
• Testlet 4: 3 Task-Based Simulations
• Testlet 5: 2 Task-Based Simulations

Post Exam:

• Survey

Between the third and fourth testlet, there is a 15-minute break that does not count towards your four hours of total testing time.

How long is the FAR CPA Exam?

There are 50 MCQs and 7 TBSs on the FAR exam that you will need to get through within the allotted time. These 57 FAR CPA Exam questions are divided into five testlets, so it’s a good idea to have a personal time management goal for each testlet.

You can time yourself with practice exams to make sure you’ll keep up a good pace on exam day.

On the FAR exam, your first two testlets will have 25 MCQs each, your third testlet will have 2 TBSs and your last two testlets will have 3 and 2 TBSs, respectively. A good starting place to time yourself on these sections is giving yourself around 40 minutes for each MCQ testlet, 35 minutes for the third testlet, and just under an hour for each of the last two testlets.

This plan only gives you about five minutes of wiggle room, so practice timing yourself and add or subtract time to your plan based on how quickly you get through the different question types.

Each section of the CPA Exam has a possible score of 0 to 99. And the minimum score to pass is 75. This score is not a percentage, and it is not curved. You can still pass if you get less than 75% of the questions right.

For FAR, your score is based on a weighted combination of your MCQ and TBS scores with MCQs making up 50% of your exam score and TBSs making up the other 50%.

It’s almost always a good idea to make FAR the first section of the CPA Exam you take on.

If you’re a recent college graduate, you should take FAR as soon as possible while everything you learned in your accounting classes is still fresh. And on the flipside, if you’ve been out of school for a while, it’s still a good idea to take FAR first because of the 18-30-month window you have to pass all four sections of the exam.

Thanks to the CPA Evolution, some jurisdictions offer 30 months to pass all four CPA Exam sections. Because the timeframe doesn’t start until you pass your first exam (and FAR is considered the hardest exam), the clock won’t be ticking yet if you take it first and don’t pass right away.

Beyond that, FAR is the most comprehensive section of the CPA Exam, so mastering it first means you have a head start on mastering concepts tested in the other three exams.
Still, choosing when to take each section of the CPA Exam is a personal decision and is completely up to you!

FAR has an average pass rate of about 45%. In 2024, the average pass rate till Q2 is 41.16% as opposed to the cumulative pass rate of 2023 of 42.12%.

FAR consistently has the lowest pass rates of all four CPA Exam sections. This could be because it’s the most comprehensive of the four exams and it requires quite a lot of mental stamina due to the number of accounting math problems it contains.

FAR has the lowest pass rate of the four CPA Exam sections, so you really need to pull out all the stops to be one of the 45% that pass. Taking the guesswork out of studying is as easy as using a high-quality CPA Exam review course.

UWorld’s study tools and resources help you stay motivated, avoid procrastination, and save time by making your study plan manageable and efficient. So, stay ahead of any FAR CPA Exam changes, reduce your stress and anxiety surrounding preparing for FAR, and enlist the help of the best CPA test prep provider on the market.