REG CPA Exam

The REG exam goes in depth into a wide range of topics revolving around federal taxation, business law, and ethics. And you need to make sure you are studying up-to-date information since laws and regulations are adjusted yearly.

The key to passing the REG exam should be unsurprising; it’s organizing an effective study plan. So, let’s talk about the best way to study for the REG exam.

Best Way to Study for the REG CPA Exam

The best way to study for the REG exam is by outlining the exam content, understanding the nature of the subjects, and creating a plan that you can commit to.

How to Pass REG CPA Exam:

• Make a plan (and stick to it)
• Stay consistent
• Take practice quizzes and practice exams
• Time yourself (on question types, testlets, and the exam overall)
• Don’t depend on a cram-session at the last minute

The most straight-forward way to pass the REG exam is by studying with a CPA Review Course. Most CPA Exam test prep providers, like UWorld CPA, will give you a personalized study plan and access to a library of up-to-date study materials like video lessons, practice questions, and practice exams.

In addition to creating a study plan, here are a few other study tips for passing the REG CPA exam.

Practice Your Memorization

25%-35% of the REG exam will test your ability to remember and understand memorized principles, and 35%-45% of the exam will test your ability to apply those memorized principles. So, memorization is particularly important on the REG section of the CPA exam.

Some ways you can enhance your memorization practice are using CPA Expert ReadyDecks, making a connection between the new information and something you already know, getting enough sleep and exercising (yes, these really help with memorization), writing out the principles, doing practice questions, and, most importantly, repeating your memorization practice often.

Don’t Worry About Operational vs. Pretest Questions

Whatever you do, do not try to guess which questions are operational and which are pretest questions. Yes, the operational questions count toward your exam score and pretest questions do not, but you won’t be able to tell the difference and trying to decide whether to skip a question is a waste of time.

Give every question your best try and remember that wrong answers don’t count against you, so don’t leave any questions blank.

Ensure Materials Are up to Date

You want to make sure you are studying the most current information because REG is consistently updated to reflect new laws and regulations. You can ensure your materials are accurate by reviewing the REG CPA Blueprint or by using a CPA Review Course with updated materials.

Take CPA REG Exam Practice Exams

Since the REG exam requires a lot of memorization and application, practice exams are a great way to test what you understand and what you don’t. They will also help you practice your time management skills and get comfortable with the different question formats. If you’re curious what practice exams are like and wonder how you’d do on the CPA Exam, check out UWorld’s REG QBank.

Set Yourself up for Success on the CPA REG Exam

Don’t undercut your success by neglecting to take care of your basic needs while you’re studying for the CPA Exam. You will have to make sacrifices, but your self-care should not be one of them. Make sure to stay hydrated, eat well, exercise, and get enough sleep along your CPA journey to set yourself up for success. You can pass the exam without running yourself ragged—you’ve got this!

Each year tax laws and regulations change, and these changes can impact the REG exam. That’s why it’s so important to make sure you have up-to-date study materials. CPA Exam REG changes are reflected in the REG CPA Blueprint, and you can also make sure you are studying the most current information by using a CPA Review Course with updated study materials.

REG CPA Exam format divides the exam questions into five testlets—two MCQ testlets and three TBS testlets.

• Testlet 1: 36 MCQs
• Testlet 2: 36 MCQs
• Testlet 3: 2 TBS
• Testlet 4: 3 TBS
• Testlet 5: 3 TBS

After the third testlet, you get a 15-minute break that does not count towards your four hours of total testing time.

CPA REG Exam Multiple-Choice Questions

Multiple-choice questions (MCQs) are a big part of the REG exam (they account for 50% of your final score). You can expect to encounter 72 MCQs on REG, divided into two testlets of 36 MCQs each.

You will be given four answers to choose from to complete these questions, and they will test your understanding and application of federal tax, business law, and ethics principles.

CPA REG Exam Task-Based Simulation (TBS) Questions

The REG exam has eight TBS questions, and they are split up into three different testlets. Testlet #3 has two TBS questions, Testlet #4 has three TBS questions, and Testlet #5 has three TBS questions. These three TBS testlets account for 50% of your final REG grade.

REG CPA Exam simulations are harder than MCQs because they require you to apply different principles in real-world scenarios. TBSs are like case studies that you have to provide a response for. There are usually multiple parts to the answer, and you can get partial credit, so don’t leave any part of a TBS blank. Different TBS answer formats include fill-in-the-blank, matching, research, or another answer format.

What is on the REG CPA Exam? Here we’ll go over a REG CPA Exam breakdown to review the five main content areas tested on this section of the CPA Exam.

Area I: Ethics, Professional Responsibilities, and Federal Tax Procedures

Ethics, Professional Responsibilities, and Federal Tax Procedures make up 10-20% of the REG exam. According to the CPA Blueprint, this area will test on professional responsibilities in tax practice, licensing and disciplinary systems, federal tax procedures, and legal duties and responsibilities of a CPA.

Area II: Business Law

Business Law also makes up 15-25% of the REG exam. According to the CPA Blueprint, this area will test on legal implications of business transactions as they relate to accounting, auditing, and financial reporting, areas of agency, contracts, debtor-creditor relationships, government regulation of business, and business structure, The Uniform Commercial Code under the topics of contracts and debtor-creditor relationships, nontax-related business structure content, and federal and widely adopted uniform state laws and references.

Area III: Federal Taxation of Property Transactions

Federal Taxation of Property Transactions makes up 5-15% of the REG exam. According to the CPA Blueprint, this area will test the federal income taxation of property transactions, federal gift taxation, accounting methods and periods, and tax elections.

Area IV: Federal Taxation of Individuals

Federal Taxation of Individuals makes up 22-32% of the REG exam. According to the CPA Blueprint, this area will test federal income tax for individuals, from both a tax preparation and tax planning perspective.

Area V: Federal Taxation of Entities

Federal Taxation of Entities makes up 23-33% of the REG exam, which is the largest content area. According to the CPA Blueprint, this area will test federal income taxation of entities including sole proprietorships, partnerships, limited liability companies, C corporations, S corporations, joint ventures, trusts and tax-exempt organizations, from both a tax preparation and tax planning perspective, federal tax law for business entities, and tax liabilities.

Pronouncement Policies for REG CPA Exam Content

Seeing as the REG exam is frequently updated to reflect new laws and regulations, the AICPA has guidelines on when this new content can be tested.

Changes to the Internal Revenue Code, federal taxation regulations, and federal laws outside of federal taxation can be tested six months after the change has taken effect. And Uniform Acts changes can be tested one year after adoption by a simple majority of the jurisdictions.

You will have four hours total to complete each part of the CPA Exam, including REG.

There are 72 MCQs and eight TBSs on the REG exam that you will need to get through within the allotted time. These 80 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 REG exam, your first two testlets will have 36 MCQs each, your third testlet will have two TBSs, and your last two testlets will have three TBSs each.

A good starting place to time yourself on these sections is giving yourself around 45 minutes for each MCQ testlet, 35 minutes for the third testlet, and just over 50 minutes for each of the last two testlets with three TBSs each. This plan gives you about 15 minutes of wiggle room, so add and subtract time to different testlets based on how quickly you move through the different types of questions.

Some tips for saving time on the REG exam include timing yourself on practice exams before the big day, budgeting less time for Testlet #1 since it will definitely be of medium difficulty (and Testlet #2 could be harder depending on how well you do on Testlet #1), and reading the MCQ answers in each lesson before skimming the provided text.

Each section of the CPA Exam is graded on a scale from 0 to 99. And you have to get at least a 75 to pass. Your score is a weighted combination of your MCQ and TBS scores, not a percentage. You can actually get less than 75% of the questions right and still pass the exam.

For REG, MCQs make up 50% of your score and TBSs make up the remaining 50%.

REG Exam Scoring by Question Type

When to Take the REG CPA Exam

The main thing to consider when deciding when to take the REG exam is how confident you feel in your knowledge about tax law. If you have experience in tax, it might make sense to take the REG exam first so you can get in an early win and build your confidence.

Or if you are less familiar with tax law and will need to spend a lot of time memorizing the material in order to apply it, you may want to save it for last. Since REG content doesn’t overlap too much with the other sections of the CPA Exam, it makes sense to take REG first.

Average REG pass rates hover around 60%. In 2023 (till Q3), the average pass rate was 59.19%, and in 2022 and 2021 the pass rate was 59.85% and 59.88% respectively.

REG has had the second highest pass rate of the CPA Exam sections over the past few years.

2019 – 2023 REG Exam Pass Rates

UWorld CPA Review Course

Using a CPA Review Course is especially helpful for REG because the exam is updated yearly to reflect new laws and regulations. This means having up-to-date study materials is crucial.

UWorld CPA courses are consistently updated with the most current information to make sure you aren’t missing anything as you prepare for the exam. UWorld courses are also specifically designed to help you gain a deep understanding of the material while fitting into your busy schedule. Time management tools that you get in your UWorld CPA course include:

• Customizable Study Planner
• SmartPath Predictive Technology
• Expert ReadyDecks (Flashcards)

These resources help you stay motivated, avoid procrastination, and save time by making your study plan manageable and efficient. So, reduce your stress and anxiety surrounding preparing for REG and enlist the help of the best CPA test prep provider on the market.