How to Pass FAR by Stephanie Ng

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!