About the FAR CPA Exam
[Updated for 2023 - 2024]

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Are you wondering what it will take to pass the FAR CPA Exam in 2023-2024? The Financial Accounting and Reporting (FAR) section is something almost every CPA candidate is intimidated by. This is because it’s considered to be the longest, most difficult, and highly comprehensive section of the CPA Exam.

According to the American Institute of Certified Public Accountants (AICPA) Blueprints, FAR requires CPA candidates to have a strong understanding of US GAAP, including financial statement concepts and standards, typical financial statement items, specific types of transactions and events, governmental accounting, and reporting, and nongovernmental and not-for-profit accounting and reporting.

How is the FAR CPA Exam Scored?

Scores for the FAR Exam are given on a scale of 0 to 99. All CPA Exam parts must be passed with a score of 75 or higher. This does not necessarily imply that you must answer 75% of the questions correctly. The numeric value of a question is determined by the difficulty level. It means difficult questions have more worth than easy or moderate questions. If you answer 5 difficult questions and 5 moderate or easy questions correctly, you will score more for the difficult questions.

The CPA Exam is not curved. The AICPA employs question weights instead of altering your score based on how your cohort performs. These weights are determined based on how candidates performed during the pre-testing of the questions.

Steps in computing FAR exam score
Steps in computing FAR exam score

The FAR CPA Exam's MCQ testlets account for half of the overall score. The remaining 50% comes from the TBS testlets. The first set of MCQs is usually of medium difficulty. If the candidate performs well on the first testlet, the subsequent testlets are likely to be increasingly difficult. However, if the candidate performs poorly on the first testlet, the second testlet will be of moderate difficulty. This process is known as multistage testing.

The TBS scores are pre-programmed and are not modified on the basis of the candidate’s performance. Partial scoring is also applied for TBSs as they include multiple responses. You are eligible to earn credit for each accurate solution. The multistage testing method is only applicable for MCQ testlets.

FAR CPA Exam Testlet Selection
FAR CPA Exam Testlet Selection

FAR CPA Exam Pass Rates

Financial Accounting and Reporting is a broad section that covers financial management, government accounting, fund accounting, and other topics. It is the most challenging section of the CPA Exam, according to candidates we surveyed. For a long time, it has had the lowest passing rate among the four sections. In fact, the year 2022 was no good for FAR. It only has a cumulative pass rate of 43.76%.This is most likely due to the vast amount of material that FAR covers, as well as the necessity to truly comprehend the concepts rather than simply memorize them.

How to Study for the FAR CPA Exam Section

Many candidates are intimidated by the FAR Exam content before they even begin studying. When studying for FAR, you must realize the importance of segmenting easy topics from the more difficult ones, and allocating study time accordingly. For example, dedicate plenty of study time to topics that are more difficult to understand, such as pensions, and dedicate less study time to topics that you already have a firm grasp on.

The multiple-choice questions for FAR can be daunting because most of them require calculations. So remember that lots of practice and patience are required for FAR. If you can figure out what’s easy and what’s hard for you and use your time wisely, you’ll get through it soon enough!

How Many Hours Should I Study for the FAR CPA Exam?

CPA Candidates frequently ask about the number of hours they should study in order to pass the FAR section of the CPA exam. The AICPA recommends spending a minimum of 300 to 400 hours studying for the CPA Exam. That equates to 80 to 100 hours of study time for each section.

However, no two CPA candidates are alike. Each person learns at a different pace and has different learning styles. Also, certain portions of the study material may take longer to get through than others. Take your study style into account and set a realistic expectation for how long it will take to study for the FAR CPA Exam. Understanding your own learning style and limitations is vital to passing.

FAR CPA Exam Study Tips

We recommend using some of the study techniques listed below:

  1. Focus on the FAR Exam first as it requires the most amount of time to prepare. FAR is easier for recent college graduates who can still remember college accounting course materials well, so we strongly recommend taking FAR while the material is still fresh.
  2. Understanding the details of financial statements makes learning the material easier. Additionally, it helps you analyze questions on the exam more quickly. If your study efforts are getting compressed, working knowledge of the statements allows you to logically examine most questions from the study materials.
  3. Even though you are very familiar with the material, you will still need to practice the questions to keep up a good pace at the time of testing.
  4. FAR has so many chapters, it is really easy to forget what you have learned. Hence, frequently review the previous chapter while you study the new ones.
  5. Partner with a CPA Review course that uses in-depth answer explanations, has engaging lectures, and integrates robust tracking and reports into their course materials to help you study more efficiently and effectively.
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Frequently Asked Questions (FAQs)

We recommend taking the FAR CPA Exam first for several reasons:
  • FAR requires the longest study lead time, which will not count against your 18-month window if it is your first exam
  • FAR is the only section with material that overlaps all three other sections
  • FAR is arguably the most difficult section, offering a great opportunity to set the tone for your studies
To pass the FAR, you’ll need to be familiar with technical financial accounting standards and be able to perform accounting math in a timed environment. This demands a strong understanding of the material as well as numerous practice quizzes.
FAR is regarded as the most difficult section of the CPA Exam, with consistently low success rates. The amount and variety of knowledge you must know to pass this exam makes it the trickiest, according to most candidates. The FAR Exam will assess your understanding of basic accounting principles that include capital leases, bonds, and balance sheets. Furthermore, it tests your dedication and time management skills as well.
Business combinations, leases, bonds, stockholders equity, and a mix of government and non-profit organizations are the most heavily tested content topics for FAR.
Beginning January, 2024, the CPA Exam Evolution initiative will implement significant modifications to the CPA Exam. The purpose is to ensure the exam continues to test candidates on the skills and knowledge newly licensed CPAs need in a technology-forward marketplace. In this new model, candidates will take three core sections and select one new discipline section. FAR will remain as one of the core CPA Exam Sections. While much of the FAR CPA Exam content will remain the same, some of the content will move to the new Business Analysis and Reporting (BAR) discipline section. Additionally, some of the topics from the current Business Environment and Concepts (BEC) exam will move to FAR in 2024, as BEC will no longer be available.
Yes. The 18-month rule continues to apply for the 2024 FAR CPA Exam. However, please note that NASBA and the AICPA announced an 18-month credit extension to account for the transition between the current and 2024 CPA Exam. This rule states that any CPA Exam sections passed by January 1, 2024 will not expire until June 30, 2025. Please note that this rule is valid in most states, but has not yet been adopted by all 55 states and jurisdictions.

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