ExpertCheat Sheet
CPA
CPACPA Exam Cheat Sheet: All Four Sections at a Glance
A structured reference for CPA candidates covering the three core sections (FAR, AUD, REG) and the three discipline options (BAR, ISC, TCP) — what each tests, key standards, and the concepts that appear most frequently.
ExpertMinds Editorial·28 January 2026·9 min read
The CPA exam (CPA Evolution format, effective January 2024) has three mandatory core sections and one discipline section of your choice. All four must be passed within 30 months. Each section is scored 0–99; you need 75 to pass. This reference covers the highest-frequency concepts across all sections.
Key fact:Core sections: FAR, AUD, REG. Discipline sections (choose one): BAR, ISC, TCP. Each section: ~72–78 MCQs + Task-Based Simulations (TBS). Pass score: 75/99.
FAR — Financial Accounting and Reporting
FAR is widely considered the hardest section. It covers US GAAP financial statements, governmental accounting, not-for-profit reporting, and the major ASC standards.
| Topic | Key standard / rule | High-frequency exam area |
|---|---|---|
| Revenue Recognition | ASC 606 — 5-step model | Identify performance obligations; variable consideration |
| Leases | ASC 842 | Finance vs operating lease classification; ROU asset calculation |
| Business Combinations | ASC 805 | Acquisition method; goodwill calculation; bargain purchase |
| Consolidated Financial Statements | ASC 810 | Subsidiary consolidation; non-controlling interests; intercompany eliminations |
| Income Taxes | ASC 740 | Deferred tax assets/liabilities; valuation allowance |
| Stock-Based Compensation | ASC 718 | Fair value at grant date; vesting; options vs restricted stock |
| EPS | ASC 260 | Basic EPS; diluted EPS; options treasury stock method |
| Governmental Accounting | GASB standards | Fund accounting; modified accrual vs full accrual; CAFR structure |
| Not-for-Profit | ASC 958 | Net assets with/without donor restriction; contribution vs exchange |
| Foreign Currency | ASC 830 | Functional currency; translation vs remeasurement |
Key fact:ASC 606 five-step model: (1) Identify the contract, (2) Identify performance obligations, (3) Determine transaction price, (4) Allocate transaction price, (5) Recognise revenue when/as each PO is satisfied.
AUD — Auditing and Attestation
| Topic | Key concept | Exam focus |
|---|---|---|
| Audit Risk Model | AR = IR × CR × DR | When to increase/decrease detection risk; substantive procedures |
| Internal Controls | COSO framework | Design vs operating effectiveness; segregation of duties |
| Assertions | CAVE ROC (Completeness, Accuracy, Valuation, Existence, Rights & Obligations, Classification) | Matching procedures to assertions |
| Audit Evidence | Sufficiency + appropriateness | External confirmation > internal documents > inquiry |
| Materiality | Qualitative + quantitative | Planning materiality; performance materiality; SAD (subsequently discovered facts) |
| Going Concern | AU-C 570 | Conditions and mitigating factors; report modifications |
| Audit Reports | Unmodified, qualified, adverse, disclaimer | Triggers for each report type modification |
| PCAOB vs GAAS | PCAOB applies to public companies | AS 2201 (ICFR); integrated audit |
| Ethics | AICPA Code of Professional Conduct | Independence threats and safeguards; Circular 230 |
| Fraud | AU-C 240; Fraud Triangle | Incentive, opportunity, rationalisation; auditor responsibility |
Tip:Audit Risk Model: if Inherent Risk or Control Risk is HIGH, Detection Risk must be set LOW (meaning more substantive work). The auditor controls only Detection Risk.
REG — Regulation
| Topic | Key rule | Exam focus |
|---|---|---|
| Individual Income Tax | Form 1040; AGI; deductions above/below the line | Gross income inclusions/exclusions; itemised vs standard deduction |
| Corporate Tax | C-Corp: 21% flat rate; no pass-through | Dividends received deduction; NOL carryforward; AMT |
| S-Corporation | Pass-through; ≤100 shareholders; one class of stock | Shareholder basis; at-risk rules; passive activity |
| Partnership Tax | Pass-through; inside vs outside basis | Hot assets; guaranteed payments; special allocations |
| Estates & Trusts | Form 1041; distributable net income (DNI) | Simple vs complex trusts; throwback rules |
| Gift & Estate Tax | Annual gift exclusion ($18,000 in 2024); unified credit | Taxable gifts; portability; stepped-up basis |
| Business Law | UCC Article 2 (goods), Common law (services) | Contract formation; SOF; breach remedies |
| Agency Law | Actual, apparent, implied authority | Principal liability for agent acts |
| Bankruptcy | Chapter 7 (liquidation), 11 (reorganisation), 13 (repayment) | Exempt property; automatic stay; priority of claims |
| Ethics / Circular 230 | IRS rules for tax practitioners | Competence; confidentiality; return of client documents |
Test your CPA knowledge
CPA exam questions test application, not recall. Practice with exam-style MCQs and task-based simulations to build the judgment the exam demands.
BAR — Business Analysis & Reporting (Discipline)
BAR covers financial statement analysis, managerial accounting, and financial modelling. It is considered the most quantitative of the three discipline sections.
- Financial statement analysis: liquidity (current ratio, quick ratio), solvency (D/E ratio, interest coverage), profitability (ROE, ROA, gross margin)
- DuPont analysis: ROE = Net Profit Margin × Asset Turnover × Equity Multiplier
- Cost-volume-profit: contribution margin = revenue − variable costs; break-even = fixed costs / CM per unit
- Variance analysis: price variance, quantity/efficiency variance, volume variance
- Capital budgeting: NPV, IRR, payback period, profitability index
- Weighted average cost of capital (WACC): used as the discount rate for NPV if not stated otherwise
ISC — Information Systems & Controls (Discipline)
- IT governance frameworks: COBIT, ITIL, ISO 27001
- SOC reports: SOC 1 (financial reporting controls) — SOC 2 (security/availability/confidentiality) — SOC 3 (public version of SOC 2)
- SOC 2 Trust Services Criteria: Security, Availability, Processing Integrity, Confidentiality, Privacy
- IT general controls (ITGCs): access controls, change management, operations, BC/DR
- Application controls: input, processing, output controls
- Cybersecurity: CIA triad (Confidentiality, Integrity, Availability); common attack types (phishing, ransomware, SQL injection)
- Data management: master data management, data governance, data quality
- GDPR and US privacy law basics: consent, data subject rights, breach notification
TCP — Tax Compliance & Planning (Discipline)
- Advanced individual: AMT, passive activity rules, at-risk limitations, installment sales
- Entity choice planning: C-Corp vs S-Corp vs Partnership — trade-offs for different owners
- International tax basics: foreign tax credit vs deduction; GILTI; Subpart F income; transfer pricing
- Deferred tax strategy: timing of income/deductions to minimise tax liability
- Tax-advantaged accounts: retirement plans (401(k), IRA, SEP-IRA); HSAs
- Research & development: Section 174 capitalisation (post-2022 TCJA); R&D tax credit (Section 41)
Ready to Practice the full CPA?
Graded results, exam simulation, and detailed guidance on every question.