The complete guide to the FAR CPA Exam

8 min read
financial accounting and reporting

Every CPA candidate must pass the Financial Accounting and Reporting (FAR) CPA Exam section to earn their license. While the FAR CPA Exam may seem overwhelming, Becker created this guide to break down exactly what to expect plus study tips and insights to help you get Exam Day ReadySM.


The FAR CPA Exam evaluates your knowledge of accounting and reporting frameworks essential for business, government, and not-for-profit entities. Covering areas such as GAAP, FASB, SEC, AICPA, and GASB standards, it assesses proficiency in financial statement preparation, analysis and transaction reporting. The FAR exam format consists of multiple-choice questions and task-based simulations that test across skill levels. While this section is challenging due to the volume of content included, recent updates aim to streamline content and improve candidates' experience. 

Table of contents 

  1. What is the FAR CPA Exam 
  2. The FAR CPA Exam format
  3. How is FAR scored?
  4. Is the FAR CPA Exam hard?
  5. Five tips to pass FAR

Download our FREE 2024 CPA Exam Guide 


What is the FAR CPA Exam

The FAR CPA Exam is the Financial Accounting and Reporting exam which assesses your knowledge of accounting and reporting frameworks used by business, government, and not-for-profit entities, including: 

  • Financial Accounting and Standards Board (FASB)
  • U.S. Securities and Exchange Commision (U.S. SEC)
  • American Institute of Certified Public Accountants (AICPA)
  • Governmental Accounting Standards Board (GASB)

This exam also assesses your knowledge related to the preparation and review of financial statements and transactions, including your ability to verify source data, identify issues, analyze facts, and determine proper responses.  

Recent changes to FAR

In January 2024, the AICPA launched CPA Evolution, an updated CPA Exam that required all candidates to pass three Core sections of the CPA Exam that focus on the foundational knowledge all CPAs should possess.

Core sections: 

  • Audit and Attestation (AUD)
  • Financial Accounting and Reporting (FAR)
  • Taxation and Regulation (REG)

Also, all candidates must choose and pass a CPA Exam Discipline section that builds on one of the Core sections to ensure specialized knowledge in a specific area. 

Discipline sections

  • Business Analysis and Reporting (BAR) builds on FAR
  • Information Systems and Controls (ISC) builds on AUD
  • Tax Compliance and Planning (TCP) builds on REG

FAR tests your knowledge on the foundational information related to accounting and reporting frameworks, while BAR builds on this knowledge by focusing on more specialized, advanced topics. 

FAR CPA Exam format

The FAR CPA Exam is a four-hour exam comprised 50 multiple-choice questions (MCQs) and 7 task-based simulations (TBSs). The MCQs and TBSs are broken down across five "testlets," so the format when you sit for the exam breaks down to this: 

  1. Pre-exam: Complete the welcome screen to confirm your information and add your "launch" code then your confidentiality code. You'll have five minutes for each screen. 
  2. Testlet 1: 25 MCQs
  3. Testlet 2: 25 MCQs
  4. Testlet 3: Two TBSs
  5. 15-minute break that does not count toward your exam time
  6. Testlet 4: Three TBSs
  7. Testlet 5: Two TBSs

FAR content areas

Area of ContentAllocation
Financial Reporting30 - 40%
Select Balance Sheet Accounts30 - 40%
Select Transactions 25 - 35%

The FAR CPA Exam tests your knowledge across three specific content areas: 

  • Financial reporting covers information related to preparing, reviewing, and analyzing financial statements and understanding foundational concepts related to the accounting requirements for state and local governments. Specific topics include: 
    • General purpose financial reporting, ratios and performance metrics for for-profit and not-for-profit entities
    • Disclosures and filing requirements specific to public companies
    • Special purpose frameworks
    • State and local government concepts
  • Select balance sheet accounts tests your knowledge related to financial accounting and reporting requirements in the FASB Accounting Standards Codification that apply to balance sheet accounts for both for-profit and not-for-profit entities. Specific topics include: 
    • Cash and cash equivalents
    • Trade receivables
    • Inventory
    • Property, plant and equipment
    • Investments
    • Intangible assets
    • Payables and accrued liabilities
    • Long-term debt and financial liabilities
    • Equity transactions
  • Select transactions covers the financial accounting and reporting requirements in the FASB Accounting Standards Codification related to select transactions for both for-profit and not-for-profit entities. Specific topics include: 
    • Accounting changes and error corrections
    • Contingencies and commitments
    • Revenue recognition
    • Accounting for income taxes 
    • Fair value measurement concepts and classification
    • Leases
    • Subsequent events

It's important to note that you should assume all information provided in each question or scenario is relevant and each question applies to a for-profit business entity reporting under U.S. GAAP unless otherwise noted in the question. Anything related to government or not-for-profit will be specified.

Skill levels

All MCQs and TBSs on the FAR CPA Exam will fall under one of three "skill levels." 

  • Remembering and understanding refers to recalling specifics and understanding what is being communicated and how to use it effectively. 
  • Application refers to applying knowledge or concepts on the exam to practical scenarios
  • Analysis refers to examining and studying how the separate areas relate to identify causes and find evidence to support inferences. 
Skill levelWeight
Remembering and Understanding5 - 15%
Application45 - 55%
Analysis35 - 45%

How is FAR scored?

The FAR Exam is graded on a scale from 0 to 99 and you have to score 75 or above to pass. The 50 MCQs make up 50 percent of the weighted score, while TBSs make up the other 50 percent of your score. 

While the exam is not graded on a curve, questions are weighted based on difficulty, so harder questions count for more than easier questions. Also, you can earn partial credit on TBSs because you are asked multiple questions within each scenario. 

Once your exam is graded and the weights are applied, you receive an aggregate score based on the 0 to 99 scale. 

Is the FAR CPA Exam hard? 

The simple answer is yes. Traditionally, CPA candidates report that FAR is the most difficult section of the CPA Exam because it covers such a large volume of content, including financial statements, transactions and accounting principles related to for-profit, not-for-profit, and government accounting. The cumulative 2022 pass rate for FAR was 44.93 percent, which was the lowest pass rate of the four sections. 

However, with the 2024 update to the CPA Exam, some of the more complicated topics on FAR were moved to the BAR Discipline section of the exam, making it less comprehensive and overwhelming. Though CPA candidates began taking the updated FAR CPA Exam in January 2024, AICPA won't release scores until June 2024, so we won't know for sure if candidates find it easier to pass until then. 

How long should I study for FAR? 

Becker recommends spending between 80 to 100 hours studying to pass FAR. This is just a general recommendation, though. You may need to spend more time on specific areas to ensure you not only understand the information but can apply it effectively or analyze it accurately. 

When should I take FAR in the CPA Exam?

Because FAR covers so much foundational information in financial accounting, we recommend this is the first exam to take because it will support your success on the other exams. 

5 tips to pass the FAR CPA Exam 

Now that you know what will be on the exam and how it's scored, we want to provide some tips on how you can pass! 

Focus on governmental and not-for-profit accounting

Most college curriculums focus on for-profit or business accounting and less time on governmental and nonprofits. However, governmental and nonprofit accounting are a key part of the FAR CPA Exam, so make sure you have a clear understanding of accounting for these entities. 

Get confident with calculations

FAR contains a lot of calculations and requires more "number crunching" than what you'll run into on other Core sections. Making sure you're confident with calculations and formulas will help you get the right answer quickly, so you don't get stuck on questions. 

Give yourself time to study

Don't feel like you should rush to take FAR before you're ready. You should give yourself at least 80 hours of study time to get comfortable with the content on the exam and learn how to apply it to a wide variety of scenarios. 

Becker's CPA Exam review includes a study planner to map out your schedule based on your exam date and how many hours a week you want to study. With topics broken down by weeks and building in time for practice tests and simulated exams, you can stay on track more easily.  

Use practice tests to find areas of opportunities

Make sure you're taking practice tests to ensure you understand and retain everything you're studying. Both MCQs and TBSs highlight areas of proficiency, but they also show areas of opportunity where you can focus more of your time and use your study time more wisely. 

Becker's Adapt2U technology builds personalized practice tests so you can focus on areas of opportunity and overcome challenging concepts more effectively. 

Manage your time

With four hours to complete 50 MCQs and seven TBSs, it sounds like you have plenty of time, but the FAR CPA Exam calculations and formulas can eat into your time quickly. When you're practicing try to give yourself about two minutes per MCQ and about 20 minutes for each TBS. When you're sitting for the exam, this will give you a bit of extra time to go back and work on questions that may have stumped you the first time around. 

Becker's simulated exams are created by our expert teams and based on the AICPA blueprint to closely align with the exam's question volume, weighting, and skill level. Not only will this show you where you need more preparation and review, it will help you get a feel for time constraints before the exam. 

Pass the FAR CPA Exam with Becker

Our CPA Exam review includes a wide variety of resources and materials to get you Exam Day ReadySM, from live-streaming classes and bite-size lecture videos to personalized practice tests, flashcards, and even a mobile app to study on the go. We know the FAR CPA Exam is challenging, but Becker can help you overcome this challenge and pass with confidence. 

Try Becker Free for 14 days

See firsthand why more CPA candidates choose Becker! Get a 14-day free trial of our exam review course and check out our resources, materials, and more. 


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