About the Business Analysis & Reporting (BAR) CPA Exam
2024 CPA Exam Evolution
The Business Analysis & Reporting (BAR) discipline of the CPA Exam is designed to evaluate candidates’ knowledge of financial risk management and financial planning techniques, with an emphasis on data analytics. It’s one of three disciplines candidates can choose from based on the exam’s core-plus-discipline model effective January 2024. Specific examples from the AICPA’s BAR blueprint include:
CPAs who choose this discipline are likely to consider roles in financial analysis and reporting, assurance or advisory services, and governmental accounting, among others. If this speciality interests you, read on to learn what to expect from the BAR CPA Exam.
How the BAR Discipline Is Related to the FAR Core
The BAR CPA Exam is an extension of the FAR CPA Exam, which is a core that all candidates must take. It includes content formerly evaluated in FAR and BEC, as well as new analysis and reporting topics. The objective of the CPA Evolution is to ensure that the three core sections examine applicants' foundational knowledge, while the discipline sections examine applicants’ knowledge of advanced concepts within each domain. The assessment of revenue recognition, leases, business combinations, derivatives, hedge accounting, employee benefit plan financial statements, and other technical accounting and reporting matters will also be covered in BAR.
The BAR CPA Exam’s Structure and Format
The BAR discipline features five testlets in total. Testlets 1 and 2 consist of 25 multiple-choice questions (MCQs) each, totaling 50 MCQs for the full exam. Testlets 3, 4, and 5 consist of task-based simulations (TBSs), of which there are 7 for the full exam. The MCQ section accounts for 50% of your score, while the TBS section accounts for the remaining 50%.
|Question Type||Number of Questions||Score Weighting|
BAR is a 4-hour computer-based exam. Given this limited time, you must maintain an efficient pace to complete all of the questions in each testlet. We recommend allocating approximately 1.8 minutes to every MCQ, resulting in about 45 minutes per testlet. We then suggest spending roughly 20 minutes for each TBS, or 140 minutes total. This leaves you with 10 additional minutes to double check your answers and return to difficult problems.
|Testlet||Question Type||Suggested Time|
|Testlet 1||25 MCQ||45 Minutes|
|Testlet 2||25 MCQ||45 Minutes|
|Testlet 3||2 TBS||40 Minutes|
|15-minute break (does not count toward total exam time)|
|Testlet 4||3 TBS||60 Minutes|
|Testlet 5||2 TBS||40 Minutes|
|Extra Time||10 Minutes|
|Total Time||240 Minutes|
BAR Exam Blueprint: Content Areas & Allocation
As laid out in the AICPA blueprints, the BAR Exam includes three content areas that cover advanced concepts pertaining to business analysis and reporting. You can learn about each subject area and topic weight in the table below:
Area I of the BAR blueprint addresses historical, current, and prospective financial statement analysis. This consists of the following:
- Current period/historical analysis, including the use of data.
- Prospective analysis, including the use of data
Area II of the BAR blueprint contains financial accounting and reporting requirements pertaining to technical accounting and reporting subjects from the FASB Accounting Standards Codification. This consists of the following:
- Indefinite-lived intangible assets, including goodwill
- Internally developed software
- Revenue recognition
- Stock compensation (share-based payments).
- Research and development costs
- Business combinations
- Consolidated financial statements
- Derivatives and hedge accounting
- Public company reporting topics
- Financial statements of employee benefit plans
Area III of the BAR blueprint outlines the financial accounting and reporting requirements for state and municipal governments based on GASB standards and interpretations. This consists of the following:
- Format and content of the financial section of the annual comprehensive financial report
- Deriving government-wide financial statements and reconciliation requirements
- Typical items and specific types of transactions and events: measurement, valuation, calculation and presentation in governmental entity financial statements
BAR Section Assumptions
When sitting for the BAR section of the exam, candidates should base their answers on the information provided within the question. You should also assume that each question applies to a for-profit business entity reporting under U.S. GAAP, unless otherwise noted (e.g., questions pertaining to state or local governments will include phrases like “local government,” “state,” “municipality,” or “city”).
Skills Tested on the BAR Exam
The BAR CPA Exam uses Bloom's Taxonomy of Educational Objectives as a skill-set parameter. The table below depicts necessary skills to pass the BAR Exam:
The BAR section of the CPA Exam evaluates information at the first three skill levels of Bloom's Taxonomy:
- Remembering and Understanding (10-20%): Examined across all Areas (primarily Areas II and III), emphasizing accounting concepts, frameworks, and standards.
- Application (45-55%): Examined across all Areas, asking you to use accounting and business concepts to measure an entity's performance and financial statement amounts (e.g., determining how a transaction will affect a business, making journal entries, and creating financial statements).
- Analysis (30-40%): Concentrated in Areas I and II, testing your ability to make sense of results, compare options, reconcile account balances, and understand agreements.
Accounting Roles Related to Business Analysis & Reporting
Aspiring CPAs have many career-path options, but candidates who choose to take the BAR discipline will be uniquely positioned to excel in the following accounting careers:
Advisory services are those in which the professional develops conclusions, findings, and recommendations for the client to consider and use in making business decisions. Some examples of advisory services include operational review and improvement study, an analysis of an accounting system, help with strategic planning, and the definition of requirements for an information system. Because of the all-encompassing nature of this role, the skills needed for advisory services are tested throughout all three BAR Areas.
Financial analysis is the process of judging the performance and suitability of businesses, projects, budgets, and financial transactions. Financial reporting includes preparing financial statements, schedules, charts, and dashboards for both internal and external use. The majority of these skills are tested in BAR Area II.
The term "financial operations" refers to the systems and tasks that a business uses to keep track of and handle transactions. It includes looking at the day-to-day activities of the organization from a financial perspective, considering ways to increase the bottom line or improve efficiencies. Skills important for financial operations roles are tested in BAR Areas I and II.
Managerial accounting is the process of finding, measuring, analyzing, and interpreting financial information and then informing leadership in order to help an organization make decisions and reach its goals. A natural progression in this career path includes managerial accountants advancing into management and leadership positions themselves. Most skills needed for managerial accountants are tested in BAR Area I.
Accountants in the government keep an eye on public funds and look into white-collar crimes. These professionals may analyze how well money is being spent and do audits in government offices and departments. They also make sure that funding policies and laws are followed. State and local government accounting is tested in BAR Area III.
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