Stephanie Ng CPA, is our Guest blogger for this post, She is here to help me and all my fellow CPA Students, to inspire us, enlighten us on how to pass FAR
exam. I have all good words for her. I thank Stephanie for her time and
dedication for CPA students. Post a comment, let her know how this post helped
you and most importantly make use of it. Happy Studying Friends and Sleep on
it.
You must pass 4 exam sections to finish the
CPA Exam, and one will be FAR, or Financial Accounting and Reporting. FAR
is the section that makes you do the most accounting. No matter how you feel
about all that accounting, you need to know this information to pass FAR.
FAR Content
FAR focuses on financial accounting and
reporting in 4 main content areas.
FAR Content
Content Area
|
Title
|
Allocation
|
Area I
|
Conceptual Framework, Standard-Setting, and
Financial Reporting
|
25-35%
|
Area II
|
Select Financial Statement Accounts
|
30-40%
|
Area III
|
Select Transactions
|
20-30%
|
Area IV
|
State and Local Governments
|
5-15%
|
So, to pass FAR, you must be able to:
- Make, understand, and analyze financial statements
(including journal entries)
- Identify the different financial accounting and
reporting methods
- Perform calculations (e.g., bonds and leases)
FAR Pass Rates and Reputation
Because FAR’s pass rates have been some of
the lowest for the last decade, FAR has a reputation for being the hardest CPA
Exam section.
2017-2018 FAR CPA Exam Pass Rates
Year
|
First Quarter
|
Second Quarter
|
Third Quarter
|
Fourth Quarter
|
Cumulative
|
2018
|
41.59%
|
49.17%
|
48.85%
|
46.79%
|
|
2017
|
41.14%
|
43.76%
|
47.58%
|
42.50%
|
44.42%
|
The scope of FAR makes it so hard. Therefore,
you must put in plenty of study hours and use them to master your weak areas.
In light of FAR’s pass rates, you’re likely to fail if you don’t take these
steps.
FAR Structure, Questions, and Score
FAR consists of 66 multiple-choice questions
accounting for 50% of your score and 8 task-based simulations contributing the
other 50%.
You must score a 75 to pass FAR. This number
is a scaled score that doesn’t mean you got 75% of the questions right.
FAR Difficulty
The CPA Exam tests candidates at 4 different
levels of skill. However, FAR only tests candidates at 3 of these skill levels.
FAR Exam Skill Levels
Skill Level
|
Remembering and Understanding
|
Application
|
Analysis
|
Evaluation
|
Content Percentage
|
10-20%
|
50-60%
|
25-35%
|
N/A
|
Content Areas
|
Areas I, II, III, & IV
|
Areas I, II, III, & IV
|
Areas I, II, & III
|
N/A
|
FAR tests at the Application level the most and at the Remembering and Understanding level the least. Therefore, you don’t need the deepest understanding of FAR’s content, just a solid grasp of most of it.
Time Management for FAR
You have 4 hours to finish FAR. As answering
every question increases your chance of passing, you should use a time
management system during the exam.
For example, if you answer each MCQ in 1 ¼
minutes, you can finish all the MCQs in about 82 minutes and have roughly 158
minutes left for the TBSs. This system also gives you 14 minutes for reviewing
answers.
Tweak this system as desired, but practice it
before exam day so you have it down.
Scheduling FAR
I highly recommend putting FAR first in your
CPA Exam schedule. Once you pass your first exam section, you have 18 months to
pass the other 3. FAR usually requires the most study time, so if you take FAR
first, you can study for it as long as necessary before your 18-month window
begins. You can even fail and study some more without that extra study time
eating away at your 18 months.
Study Tips for FAR
Though FAR is challenging, you can pass it
efficiently if you prepare effectively. Here are my best FAR study tips:
- Schedule your FAR study time carefully
More often than not, candidates fail FAR for
lack of sufficient studying. To avoid this situation, plan ahead and stick to a
schedule. Specifically, give yourself at least a month before your exam date to
complete your final review and strengthen any remaining weak areas.
- Don’t skip difficult concepts
FAR features some tricky topics that you
can’t ignore. When I sat for FAR, I saw a lot of questions on my weakest areas,
so I was thankful I made time to study those areas specifically. You should do
the same because you never know what your FAR exam questions will ask you
about.
- Understand journal entries
If you weren’t an accounting major or haven’t
worked with journal entries for a while, you must be intentional about
mastering journal entries. This page on principlesof accounting illustrative entries and this page on fund-basedvs government-wide entries can help.
- Don’t rush yourself
If you’re afraid you won’t clear your review
before your exam date, you should put off scheduling your testing appointment
or reschedule it if necessary. Don’t take FAR when you’re not ready for it.
More Help for the CPA Exam Sections
FAR may be one of the most overwhelming exam
sections, but you can pass this and all the other sections with a little
outside help.
My site, ipassthecpaexam.com,
provides that help. As a CPA and author of a Wiley-published CPA Exam guide,
I’ve written all about the CPA Exam process on my site. I walk candidates
through each of the steps to the CPA license and supply plenty of study tips
and tricks along the way. Also, I’ve personally assessed the most popular CPA
review courses on the market and listed their pros and cons so my readers can
see which course will work best for them. And finally, I’ve worked with the
review providers to secure exclusive discounts on these courses. So, when you
visit my site, you can get all the information you need to pass the CPA Exam on
your first attempt!
