The CPA Exam Study Method I Learned from the Audit Risk Model


The score of my last CPA Exam subject, AUD, was finally released on December 9th. I received a score of 89. I was happy to have finally finished all parts of the CPA Exam! Even though my score for AUD was not as good as my other three CPA Exam scores, it was the one subject that I passed with the least amount of study time.

How did I pass without studying as much as I did for the other three parts of the CPA Exam?

I came up with CPA study model based upon my understanding of the Audit Risk Model. If you are studying for AUD, then youre familiar with the formula to which I am referring – Audit Risk=Inherent Risk*Control Risk*Detection Risk.

I first evaluated the inherent risk of an account or event, evaluated the control and determined the appropriate audit procedures to get a reasonably low audit risk.  I think this formula is very similar to our CPA exam preparation. Like everyone, my audit risk is the risk of not passing the CPA Exam.

The inherent risk is the level of difficulty of a concept. For me, it means how well I handle concepts without referring to the review materials.

The control risk is how well the review materials help me to understand the concepts and master the necessary skills in order to solve the problems. Similar to what we learned in auditing, control includes good design of control and good implementation. The quality of review material is how well the control is designed and the quality of my study and concentration is how well the control is implemented.

The detection risk is the risk I took when not successfully applying correct concepts to specific problems.

After evaluating the inherent risk and control risk, I designed my audit proceduresa CPA review plan to make my risk of failing reasonably low. My audit procedure was to review concepts through flash cards (test of control) and work problem sets (test of details).I found it very efficient to study for the CPA Exam using the audit risk model methodology.

After I figured out my studying methodology, I began studying by doing a blind test of all the AUD concepts in order to evaluate how much I knew prior to reading the review materials. It turned out that I knew a lot about the risk model, assertions and audit report. I had mostly correct answers for assurance and attestation reports and governmental auditing. My understanding of specific audit procedures was moderate. The quality of the review materials was great, so I would read the review materials on areas where I knew the inherent risk was low to moderate. I would then listen to the lectures and read the textbooks, studying the chapters where my inherent risks were high. I also used flashcards to review AUD concepts after I reviewed each chapter.

After that, according to how well I understood a chapter, I would work through AUD problems. When I read a chapter and felt confident about the material, I would work through about 40-60 multiple choice questions per chapter. For the chapters where I had a more difficult time, like audit procedures and test of details, I would work through all of the questions within the problem set.

I studied around six nights (2-3 hours per night) and three days (10-12 hours per day). In total, I only spent around 50 hours before I sat for the CPA Exam. Thankfully, my strategy worked!

I believe this is a solid study method for CPA Exam candidates who are taking AUD and who are also familiar with accounting concepts through their work, studies or previous CPA experience. This is a great formula to use when trying to balance work and life while preparing for the CPA exam in a relatively short period of time.

I wish every fellow CPA candidate a very happy holidays!  Good luck on AUD!

– Crystal, international guest blogger for Roger CPA Review

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