The CPA Ethics Exam Explained


We’re all aware that there are many requirements we have to meet in order to become a CPA. Among the sea of paperwork you have to submit, course credits, and professional hours you have to have under your belt, and the specific requirements for each state, some lines become blurred until you’ve crossed them.

Upon first impression, many people think that to become a licensed CPA, one only has to pass all four parts of the CPA exam. In fact, the CPA exam is just one of the “Three E’s” – Education, Examination and Experience – that is necessary to obtain licensure. Of these three requirements, only the CPA exam is uniform and accepted by all U.S. jurisdictions. Many of these jurisdictions also require an additional exam in ethics which can be referred to as the fourth E.

Today well focus on the fourth E which is often left as the final major step to gaining a CPA license. This exam is not in the spotlight and therefore often takes people by surprise. Most state boards accept the AICPA’s comprehensive ethics course and exam so that is what well focus on. This exam can generally be taken before, during or after the CPA exam but is usually saved for the end as people like to tackle the larger hurdle first and dont want to run out of time as test results are valid for a 2 year period.

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What is the AICPA Ethics Exam

This exam covers the AICPA Code of Professional Conduct and Accounting Rules and tests how well you would handle professional ethics questions that you may encounter during your time in the accounting profession. Naturally, CPAs serve the financial integrity of individuals, companies, and businesses. The exam strives to refresh and remind CPAs of the conduct expected and required of them when working with and in professional organizations. Heres the general information you need to know about the test:

  1. There are 40 multiple-choice questions and the test is given in a self-study, open-book format
  2. You have 3 attempts to pass the exam
  3. You must score at least a 90 to pass (dont let point #1 fool you as with only 4 question errors allowed, you must still be very careful)

In addition, the AICPA provides a course to help you study for this exam. It consists of 11 hours of course material, offered as a CD-ROM set that includes principles and examples of professional ethics for CPAs and how to apply these concepts to the real world. Topics such as legal and regulatory issues, the importance of maintaining independence from client/employer, and code of conduct of the AICPA are all covered in this course.

Keep in mind that some states administer their own Ethics exam through their State Society of CPAs such as California. If planning to get licensed in California you would then obtain information and enroll through CalCPA. Also, as of 2013, a few states such as New York decided to no longer require CPAs to pass an ethics exam. It is always recommended to do research using specific accounting state board and state society websites that fit your licensure goals.

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