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CPA FAR Select Financial Statement Accounts

CPA FAR  Select Financial Statement Accounts

CPA FAR  Select Financial Statement Accounts : 

30-40% Select Financial Statement Accounts

  • Cash and cash equivalents
  • Trade receivables
  • Inventory
  • Property, plant and equipment
  • Investments
  • Intangible assets
  • Payables and accrued liabilities
  • Long-term debt
  • Equity
  • Revenue recognition
  • Compensation and benefits
  • Income taxes

CPA FAR  Select Financial Statement Accounts

CPA FAR  Select Financial Statement Accounts : This section covers knowledge of generally accepted accounting principles for business enterprises (public and nonpublic), not-for-profit entities, and state and local government entities, and the skills needed to apply that knowledge.

Certified Public Accountant (CPA) is the title of qualified accountants in numerous countries in the English-speaking world. In the United States, the CPA is a license to provide accounting services directly to the public. It is awarded by each of the 50 states for practice in that state. Additionally, almost every state (49 out of 50) has passed mobility laws in order to allow practice in their state by CPAs from other states. Although state licensing requirements vary, the minimum standard requirements include the passing of the Uniform Certified Public Accountant Examination, 150 semester units of college education, and one year of accounting related experience.

Continuing professional education (CPE) is also required to maintain licensure. Individuals who have been awarded the CPA but have lapsed in the fulfillment of the required CPE or have requested to be converted to inactive status are in many states permitted to use the designation “CPA Inactive” or an equivalent phrase. In most U.S. states, only CPAs are legally able to provide to the public attestation (including auditing) opinions on financial statements. Many CPAs are members of the American Institute of Certified Public Accountants and their state CPA society.

State laws vary widely regarding whether a non-CPA is even allowed to use the title accountant. To illustrate, Texas prohibits the use of the designations “accountant” and “auditor” by a person not certified as a Texas CPA, unless that person is a CPA in another state, is a non-resident of Texas, and otherwise meets the requirements for practice in Texas by out-of-state CPA firms and practitioners.

CPA FAR  Select Financial Statement Accounts

CPA FAR  Select Financial Statement Accounts :The Financial Accounting and Reporting (FAR) section of the CPA Exam is arguably the most difficult, longest and by far the most comprehensive section of the exam. FAR requires that CPA candidates have a strong knowledge of US GAAP, including concepts and standards for financial statements, typical items in financial statements, specific types of transactions and events, accounting and reporting for governmental entities, and accounting and reporting for nongovernmental and not-for-profit organisations. CPA candidates should also be able to demonstrate the skills needed to apply the financial reporting knowledge required of CPAs.

CPA FAR  Select Financial Statement Accounts

CPA FAR  Select Financial Statement Accounts : FAR EXAM CONTENT

25-35% Conceptual Framework, Standard-Setting and Financial Reporting

  • Conceptual framework and standard-setting
  • General-purpose financial statements: for-profit business entities
  • General-purpose financial statements: nongovernmental, not-for-profit entities
  • Public company reporting topics
  • Financial statements of employee benefit plans
  • Special purpose frameworks

20-30% Select Transactions

  • Accounting changes and error corrections
  • Business combinations
  • Contingencies and commitments
  • Derivatives and hedge accounting
  • Foreign currency transactions and translation
  • Leases
  • Nonreciprocal transfers
  • Research and development costs
  • Software costs
  • Subsequent events
  • Fair value measurements
  • Differences between IFRS and U.S. GAAP

5-15% State and Local Governments

  • State and local government concepts
  • Format and content of the Comprehensive Annual Financial Report (CAFR)
  • Deriving government-wide financial statements and reconciliation requirements
  • Typical items and specific types of transactions and events in governmental entity financial statements

CPA FAR  Select Financial Statement Accounts

CPA FAR  Select Financial Statement Accounts : The FAR Exam is 4 hours long, though the candidate is not required to use all the allotted time, and consists of 66 Multiple Choice Questions (MCQs) and 8 Task-Based Simulations (TBSs).

Of the 66 MCQs, 54 are operational, meaning they count toward the exam score, while 12 are pretested and do not count toward the exam score. Of the 8 TBSs, 7 are operational and 1 pretested. Other than scoring, there is no functional difference between operational and pretested questions and no sure way for the candidate to tell the difference between an operational and pretested question.

The FAR Exam is organised into five test lets – two 33-question MCQ test lets followed by a 2-question TBS test let, then an optional 15-minute break that does not count against the 4-hour test time, then two additional TBS test lets of three questions each. Once a test let has been submitted, it cannot be revisited.

CPA FAR  Select Financial Statement Accounts

CPA FAR  Select Financial Statement Accounts : The operational MCQs count 50% toward a candidate’s exam score. The operational TBSs count 50% toward a candidate’s exam score.

By default the first MCQ testlet is of ‘Medium’ difficulty. The difficulty level of the next  MCQ testlet depends on the candidate’s performance on the first testlet. The candidate will therefore experience one of the following MCQ testlet difficulty sequences:

  • Medium – Difficult (candidate performed well on first testlet)
  • Medium – Medium (candidate did not perform well on first testlet)

Characterise a test let as ‘medium’ or ‘difficult’ refers to the average difficulty of the questions in an MCQ test let. There is not a binary ‘medium’ or ‘difficult’ value assigned to each MCQ. Rather, the difficulty level of each question exists on a numeric scale.

CPA FAR  Select Financial Statement Accounts

CPA FAR  Select Financial Statement Accounts : Credit awarded for MCQs is weighted by difficulty level, meaning more credit is awarded for getting a more difficult question correct than for getting a less difficult question correct. Therefore, a candidate with a difficult test let is not penalised for having harder questions, nor is there any advantage in having two Medium test lets.

It is still possible to pass the exam even with a Medium-Medium MCQ testlet sequence. In these cases, good-to-excellent performance on the second MCQ testlet and the TBS testlets is key to passing.

The assigned TBS testlets are pre-selected and have nothing to do with the candidate’s performance on the preceding MCQ testlets, nor do the TBSs within the TBS testlet proceed according to performance on the previous TBS.

While an MCQ is either right or wrong, there appears to be partial credit awarded for non-Research TBSs. Research TBSs are graded as either right or wrong with no partial credit awarded.

CPA FAR  Select Financial Statement Accounts

CPA FAR  Select Financial Statement Accounts :  The Examination consists of four sections:

Auditing and Attestation (AUD)

This section covers knowledge of audits of issuer and nonissuer entities, attestation engagements for issuer and nonissuer entities, preparation, compilation and review engagements, and the skills needed to apply that knowledge.

Business Environment and Concepts (BEC)

This section covers knowledge of general business environment and business concepts that candidates need to know in order to perform audit, attest, accounting and review services, financial reporting, tax preparation, and other professional responsibilities in their role as certified public accountants, and the skills needed to apply that knowledge.

Financial Accounting and Reporting (FAR)

This section covers knowledge of generally accepted accounting principles for business enterprises (public and nonpublic), not-for-profit entities, and state and local government entities, and the skills needed to apply that knowledge.

Regulation (REG)

This section covers knowledge of federal taxation, ethics and professional responsibilities related to tax practice, and business law, and the skills needed to apply that knowledge.

CPA FAR  Select Financial Statement Accounts

CPA FAR  Select Financial Statement Accounts :

Eligible candidates have the opportunity to take the Examination at Pro metric test centres in Bahrain, Kuwait, Japan, Lebanon, and the United Arab Emirates (UAE) and Brazil. In order to qualify to take the  Examination outside the U.S., candidates will have to first establish their eligibility through application to a state board participating in the International CPA Examination Administration Program.

For specific instructions on how to apply to take the Examination, please visit the CPA Examination section of the NASBA website.

CPA FAR  Select Financial Statement Accounts

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