CPA Exam Focus: Business Environment and Concepts

Welcome to our fourth and final edition of CPA Exam Focus! In case you missed the first three, go ahead and read all about Financial Accounting and ReportingAuditing and Attestation, and Regulation!

This time we’ll be going over BEC – jam-packed with your favorite CPA exam content like economics, IT, and cost accounting!

As you probably already know, BEC is the only CPA exam section which does not contain simulations. Another bonus to BEC is that it is the smallest section as far as study time and content are concerned – but please do not take this to mean that BEC is the “easiest” or doesn’t require the same amount of effort and concentration as other sections. In fact, CPA exam candidates have often experienced trouble passing BEC simply because they did not take the section seriously enough – don’t let that be you!

BEC is a 2.5 hour exam consisting of three multiple choice testlets of 30 M/C each. As with all other sections, your testlet questions will be based on performance in the previous testlet. So if you’re getting really hard multiple choice questions, that means you’re doing well! It also means that you need to answer fewer questions correctly as harder M/Cs are worth more.

For time management purposes, you should be allocating about 1.5 minutes to each M/C (45 minutes per testlet).

As of now, BEC still does not contain any simulations nor communications – this is changing with CBT-e but has as yet not taken effect. To stay on top of any changes in exam content, application processes, or to keep up on CPA exam tips and tricks, we of course recommend to subscribe to the blog!

The AICPA BOE has assigned the following target weights to each skill in BEC:

Analysis: 8% – 18%
Judgment: 6% – 16%
Understanding: 55% – 65%

Content weights are as follows:

Business structure: 17% – 23%
Economic concepts: 8% – 12%
Financial management: 17% – 23%
Information technology: 22% – 28%
Planning and measurement: 22% – 28%

What can you expect to see in BEC’s five different areas?

Business structure: legal structures for business, LLCs and LLPs, formation, capitalization, profit and loss allocation, legal obligations, and authority of owners and management
Economic concepts: business cycles, inflation and deflation, market influences on business strategies, foreign currency, hedging, and exchange rate fluctuations

Financial management: financial modeling, short and long-term financing, liquid asset management, accounts receivable, accounts payable, and fixed/variable rate loans

Information technology: roles of business information systems, roles and responsibilities within the IT function, IT fundamentals, systems operation, master file maintenance, disaster recovery, data management, ecommerce, POS transactions, and electronic data interchange

Planning and measurement: planning and budgeting, strategic and operational planning, forecasting and projection techniques, performance measures, benchmarking, cost measurement, and factors affecting production costs

We’ve said it before and we’ll say it again: the most important thing to keep in mind with BEC is that just because it’s small doesn’t mean it requires any less effort. Focus just as you would with the other sections, give it your all, and don’t forget to do your homework!

Scroll to Top