Business Environment and Concepts
BEC Section At-a-Glance
Question Content Breakdown
(plus 15 min break)
(2 MCQ/2 TBS/1 WC)
Multiple Choice Questions
Written Comm. Tasks
Comprehensive Guide to the BEC Section
CPA Exam BEC Section Content
The Business Environment and Concepts (BEC) section of the CPA Exam tests CPA candidates’ understanding of business concepts and the significance of a CPA’s professional duties and responsibilities within the larger context of the business environment. Areas covered on the BEC Exam are corporate governance, economic concepts and analysis, financial management, information systems and communications, strategic planning and operations management. One unique aspect of the BEC exam is that it requires the candidate to prepare and submit three Written Communication responses.
Many CPA candidates consider BEC to be the easiest section of the CPA Exam. However, BEC pass rates have historically been only slightly higher than those for other sections, and the exam still requires a serious study effort.
17-27% Corporate Governance
- Internal control and enterprise risk management frameworks
- Other regulatory frameworks and provisions
17-27% Economic Concepts and Analysis
- Economic and business cycles
- Market influences on business
- Financial risk management
11-21% Financial Management
- Capital structure
- Working capital
- Financial valuation methods and decision models
15-25% Information Technology (IT)
- IT governance
- Role of IT in business
- Information security/availability
- Processing integrity (input/processing/output controls)
- Systems development and maintenance
15-25% Operations Management
- Cost measurement concepts, methods and techniques
- Variance analysis
- Process management
- Planning techniques
CPA Exam BEC Structure & Format
The BEC Exam is 4 hours long, though the candidate is not required to use all the allotted time, and consists of 62 Multiple Choice Questions (MCQs), 4 Task-Based Simulations (TBSs) and 3 Written Communication Tasks (WCs).
Of the 62 MCQs, 50 are operational, meaning they count toward the exam score, while 12 are pretested and do not count toward the exam score. Of the 4 TBSs, 3 are operational and 1 is pretested. Of the 3 WCs, 2 are operational and 1 is pretested. Other than scoring, there is no functional difference between operational and pretested questions and no sure way for the candidate to tell the difference between an operational and pretested question.
The BEC Exam is organized into five testlets – two 31-question MCQ testlets followed by a 2-question TBS testlet, then an optional 15-minute break that does not count against the 4-hour test time, then an additional 2-question TBS testlet, then one 3-task WC testlet. The candidate proceeds at his or her own pace through the testlets. Once a testlet has been submitted, it cannot be revisited.
The operational MCQs count 50% toward a candidate’s exam score. The operational TBSs count 35% toward a candidate’s exam score. The operational WCs count 15% toward a candidate’s exam score.
By default the first MCQ testlet is of ‘Medium’ difficulty. The difficulty level the next MCQ testlet depends on the candidate’s performance on the first testlet. The candidate will therefore experience one of the following MCQ testlet difficulty sequences:
- Medium – Difficult (candidate performed well on first testlet)
- Medium – Medium (candidate did not perform well on first testlet)
Characterizing a testlet as ‘medium’ or ‘difficult’ refers to the average difficulty of the questions in an MCQ testlet. There is not a binary ‘medium’ or ‘difficult’ value assigned to each MCQ. Rather, the difficulty level of each question exists on a numeric scale.
Credit awarded for MCQs is weighted by difficulty level, meaning more credit is awarded for getting a more difficult question correct than for getting a less difficult question correct. Therefore, a candidate with a Difficult testlet is not penalized for having harder questions, nor is there any advantage in having two Medium testlets.
It is still possible to pass the exam even with a Medium-Medium MCQ testlet sequence. In these cases, good-to-excellent performance on the second MCQ testlet, the TBS testlet and the WC testlet is key to passing.
The assigned TBS testlet and the assigned WC testlet are pre-selected and have nothing to do with the candidate’s performance on the preceding MCQ testlets, nor do the TBSs and WCs within a TBS testlet or within the WC testlet proceed according to performance on the previous item.
WCs are graded according to three general criteria: organization, development, and expression.
Organization refers to structure, ordering of ideas, and connections between ideas. An overview or thesis statement is expected, along with unified paragraphs and well-chosen transitions and connecting elements.
Development refers to supporting evidence or information to clarify the candidate’s assertions. It includes details, definitions, examples, and rephrasing.
Expression refers to the quality of the business English used. Grammar, punctuation, word usage, capitalization and spelling are all considered.
Operational WCs are graded via software, but are automatically reviewed and re-graded by human scorers if the candidate is ‘on the bubble’ or close to a passing score on the BEC exam. If more than one person re-grades a candidate’s WC responses, the average of the human graders’ scores will be the candidate’s final WC score.
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The BEC section of the CPA Exam covers the entire auditing process and requires a strong technical knowledge of the auditing process. Want to test your auditing skills? Take a UWorld Roger CPA Review Free Trial for access to real CPA Exam practice questions that map to the AICPA Blueprints.Sign Up Now
BEC Exam Scoring
CPA candidates are given 4 hours to complete the BEC Exam and are required to receive an overall scale score of 75 or higher in order to pass. Download our infographic for an easy guide on how the BEC section of the CPA Exam’s structure and test administration play key factors in how the exam is scored overall.
|Multiple-Choice Questions (MCQs)|
|Task-Based Simulations (TBS)|
|Written Communications (WC)|
BEC Section Study Tips
- The BEC exam is a test of endurance. Commit to putting in the time required to truly understand the material.
- Make a plan and stick to it – our Study Planners can help.
- Consider eliminating distractions during your designated study times – block Internet access, turn off notifications, tell family, friends and colleagues you will be completely unavailable.
- Practice the mnemonics not merely to memorize, but to understand – recite them while explaining, in your own words, what each element means and how it fits into the big picture.
- Eat well, exercise, and get plenty of rest.
If you were ever daunted by your high school English teacher whose midterms and finals consisted of analyzing a piece of poetry or literature in which you had…