Certified Public Accountant (CPA)

Win a 45 Minute Session with Brian Hock

If you feel like you need more support, or a mentor, who will help you maximize your study time, motivate you, and give personal recommendations, then now is your chance. You have a unique opportunity to meet with me individually through a drawing for a free 45 minute One to One with Brian Hock Session, which is normally $99.

Here is what you need do to enter to win a free session with me:

  1. Post a picture of you studying with HOCK materials on social media: Facebook, Twitter, LinkedIn, or Instagram.
  2. Tag the HOCK international home page, www.hockinternational.com
  3. Use hashtag #hock
  4. In your post, write why you chose HOCK and what you think about the HOCK materials

Deadline: September 20th.

Please leave us a comment below if you have any questions. I look forward to meeting you!

Brian Hock, CMA, CIA

Critical Audit Matters Begin Testing on the CPA Audit Exam July 1, 2019

While Critical Audit Matters (CAMs) were added to the PCAOB Standards in 2017, reporting of CAMs is only effective for fiscal years ending on or after June 30, 2019. Additionally, CAMs will be tested on the CPA Audit exam beginning July 1, 2019. Therefore, both practitioners and CPA exam candidates need to be familiar with CAMs.

CAMs are an additional section in the auditor’s report in which the auditor provides disclosure about any areas of the audit that were particularly difficult or had significant estimates or judgement in them. While I am not going to cover the requirements of CAMs here, I want to outline why this reporting is important and can help users of financial statements better understand a company. I will do this by giving brief examples of two companies that each have goodwill of $10,000,000 on their balance sheet.

First, let us imagine that Company A made a significant investment in Company Z three years ago and recognized $10,000,000 of goodwill related to 7 patents owned by Company Z. All of the patents are still valuable and there are no potential competing products in development. So, Company A has $10,000,000 of goodwill that is not impaired and not likely to become impaired in the near future. Assuming that Company A will receive an unqualified opinion from its auditor, there will be no specific mention about the goodwill in the auditor’s report and the only mention of the goodwill in the financial statements will be its inclusion on the balance sheet. (There may be some disclosure about the goodwill in a note if the amount is material to the financial statements.)

Next, let us assume that Company B made a significant investment in Company Y three years ago and recognized $10,000,000 of goodwill related to the brand name and reputation of Company Y. Now, the $10,000,000 of goodwill is being tested for impairment. Though the auditor feels that they did enough testing, and they are comfortable that the goodwill is not impaired, they know that there were a lot of estimates and believe that the goodwill could become impaired in the near future, or, if the industry changes rapidly enough, the goodwill may lose all of its value. In coming to this conclusion, the auditor knows that their decision involved especially challenging, subjective, and complex judgment. At this point, Company B will receive an unqualified opinion from their auditor, but unlike Company A there will be specific mention of the goodwill in the audit report as a Critical Audit Matter.

Prior to the PCAOB addition of Critical Audit Matters, the language of the reports for both companies could have been copied and pasted out of the Standards and would behave been the same for both companies. However, based on the situations, the $10,000,000 of goodwill that is on each balance sheet is different and was looked at very differently during the audit. With the addition of Critical Audit Matters in the audit report, the users of the financial statements will get more information about the goodwill of Company B in the report. Even more importantly, that information is coming from the perspective of the auditor and not management.

My unofficial definition of a CAM is that it is any material account or disclosure that could have been reported another way than it was reported in the financial statements. If there were extensive estimates, subjective decisions, or substantial use of auditor judgment, then I think that the users of those financial statements would want to know what the other considerations were for reporting it.

If you are taking the CPA Exam, you need to know Critical Audit Matters starting in July of 2019. If you are not a CPA Candidate, but prepare or audit financial statements for a publicly-traded company in the US, then this is something that you may have already started preparing for and doing during engagements.

To help all CPA candidates prepare for this new topic, we are offering our two videos covering Critical Auditor Matters free of charge. Use the buttons below to play each of the videos.

Critical Audit Matters (16 Minutes)
Reporting Critical Audit Matters (16 Minutes)

If you have written or read any CAMs as an auditor or user of financial statements, I would be interested to hear your experience so far with CAMs in the comments.

Brian Hock, CMA, CIA

The Only Question You Need to Answer to Pass the Exam

There is one question that you must be able to answer correctly in order to pass a professional exam. If you can answer this question correctly, you will pass the exam. If you cannot answer this question correctly, it is very unlikely that you will pass. Watch the video to find out the question!

So, before you start preparing for any question that is going to be on the exam, make certain you can first answer the question of why you are studying. Why are you studying?

My Studies Video Display Updates April 2019

HOCK is pleased to announce two new features for our CMA, CPA, and CIA videos in My Studies:

  1. Check marks will now appear on the button for each video after it is watched completely. The buttons will also turn from green to gray as another visual indicator of completion.
  2. The last time a video was watched shows underneath the name of each video.

These new features are live in My Studies and incorporate video data going back to 2013 when HOCK first launched our videos.

Not yet a HOCK student? Learn more about our CMA, CPA, and CIA exam prep and starting studying today!

CPA FAR Textbook Update January 2019

The CPA FAR Volume 2 Textbook has been revised to reflect the latest guidance for Leases in ASC 842, which is a major revision to the accounting for leases. The new Volume 2 textbook files are available for current students to download in My Studies.

Candidates should review the new lease material in Group F on pages 54-104. If you have any questions about these changes, please contact us and we will be glad to assist you.

You can also learn more about the HOCK CPA and other exam prep materials if you are not already a HOCK student.

CPA Audit Textbook and Videos Update June 2018

The CPA Audit Textbook and Videos have been updated with changes related to the latest accounting standards. The significant changes are listed below and the new content is available for current students in My Studies.

Candidates should review the changed material in the updated textbook and/or videos. If you have any questions about these changes, please contact us and we will be glad to assist you.

You can also learn more about the HOCK CPA and other exam prep materials if you are not already a HOCK student.

Area II

  • Expanded discussion of Audit Risk at the beginning of Area II.

Area III

  • Added new guidance for the Going Concern Assessment.

Area IV

  • Added discussion of the new PCAOB AS 3101 Standard on Audit Opinions.
  • Added discussion of the new standard on audit involvement with exempt offering documents.

CPA FAR Videos Update May 2018

The CPA FAR Videos have been updated to reflect the recent changes in the textbook related to the latest guidance for ASC 606 (Revenue Recognition). The significant changes are listed below and the new videos are available for current students to watch in My Studies.

Candidates should review the changed material in the updated videos. If you have any questions about these changes, please contact us and we will be glad to assist you.

You can also learn more about the HOCK CPA and other exam prep materials if you are not already a HOCK student.

All Changes Are In Area II

Group C: Inventory

  • Permanent Decline in Value replaced Lower of Cost or Market

Group E: Investments

  • All of the Videos in Investments have been replaced.

Group G: Payables and Accrued Liabilities

The following three videos replaced Estimated Liabilities:

  • Estimated Liabilities – Compensated Absences
  • Estimated Liabilities – Warranties
  • Estimated Liabilities – Coupons and Premiums

Group J: Revenue Recognition

  • All of the Videos in Revenue Recognition have been replaced to conform to the changes in ASC 606.

CPA Exam Considerations for Non-US Candidates

A US CPA license is the most widely recognized professional accounting certification in the world. However, that does not mean that it is always the best choice for accounting professionals outside of the United States. There are issues connected to the content of the Exam, eligibility, taking the Exam, getting your license, and the investment of time and money, all of which need to be carefully considered before deciding to pursue becoming a CPA.

I have been teaching candidates outside the US to pass the CPA Exams since the year 2000, but I always want to make certain that each candidate we help is taking the CPA Exam for the right reasons. The five most important questions that a candidate from outside the US needs to ask and think about before deciding to pursue the US CPA are:

Is CPA the right certification for you?

Before starting any professional certification, you need to be certain that it is the right professional certification for you. This question is even more important for individuals outside the US who are considering the US CPA Exam because of the potentially large investment of both time and money that is required given the additional difficulties of qualifying and taking the exam from outside the US (discussed below).

Determining if the US CPA is right for you revolves largely around the question of why you are taking the CPA Exam, i.e. what is your goal in becoming a CPA? If being a CPA is required for a specific job that you would like to have in the future, then you will need to become a CPA for that position. However, even if the position you want requires being a CPA, if you are not eligible to take the Exam or get your license (discussed below), then you will not even be able to become a CPA.

One specific issue in assessing whether CPA is the right certification for you is the fact that the content of the CPA Exam is US-oriented. The FAR Exam covers US GAAP. The REG Exam covers US tax law and US business law. The Audit Exam covers US audit standards. If you will not be working with US GAAP, US tax or business law, or US auditing standards, then the CPA Exam will not be preparing you for your job. If you are studying topics that you will not be using in your career, it also becomes harder to study these topics because you are not motivated by the practical application to your work.

Are you eligible to take the Exam?

If you have determined that the US CPA is the right certification for you, the next step is to determine if you will be eligible to take the Exams.

While every state has its own requirements for eligibility for the CPA Exam, most states require the equivalent of a Master’s Degree in Accountancy from a US university. In addition to the education requirements, some states also require US citizenship and/or residency.

Even though most states require a Master’s Degree in Accountancy, there are a handful of states that do not have this requirement. These are the states that most foreign candidates register in. Some of these states require the equivalent of 5 years of university credit to be eligible and some require only 4 years. Most states also have requirements about the minimum number of accounting hours, non-accounting business hours, and auditing or business law hours that must be completed in order to be eligible.

All of this is to say that if you do not have at least a 4-year Accounting degree, it will be very difficult to be eligible to take the CPA Exam.

Will you meet the experience requirement to get your license?

In addition to making certain that you are eligible to take the Exam, you also need to confirm that you will be able to get your license after you pass the Exams.

Most states require 2 years of experience under a licensed CPA in public accounting (external audit or taxation). Some states allow non-public accounting experience, but usually more than 2 years, and some states do not require that all work have been supervised by a CPA.

The state in which you plan to apply for your license must be the same state in which you registered for the Exam. You cannot register for the Exam in one state and then apply for your license in another.

Where will you take the Exam?

Assuming that you qualify to take the Exams and be licensed, in order to calculate how much it will cost to take the Exams, you need to identify where you will be able to sit for the Exams.

The CPA Exam is available in only a few countries outside of the United States: Japan, Brazil, Bahrain, Kuwait, Lebanon, and the United Arab Emirates.

Additionally, only citizens and long-term residents of certain countries are eligible to take the Exam in these locations. You can see who is able to take the Exam in each of these countries here: https://nasba.org/app/uploads/2011/02/InternationalTestingChart.pdf. If you are not a resident of the countries listed, you will have to sit for the exam in the US.

The main issue of the location of the Exam is the additional cost. If you will need to travel to take the Exam, you will have the costs of travel and hotel each time you go. If you plan to take one Exam at a time and you end up failing 2 Exams, you would have 6 trips associated with passing the CPA Exam.

Have you calculated the financial and time investment required?

The investment required to earn your CPA license is not only the financial costs of registration, preparation, and potentially travel, but also the investment of your time to prepare.

  • The cost of registration varies by state, but $1,500 would be a reasonable average (for all four exams).
  • The cost of preparation can be between $500 and $5,000, depending on how you prepare.
  • The cost of travel will depend on a number of factors, but can become very expensive depending on where you live and where you need to go.

While these costs will be different for each candidate, it will probably cost at least $3,000 to prepare for and register for the Exams, not including any necessary travel expenses.

In terms of time, you should expect to spend at least 300 hours studying for the Exams. Depending on your educational background and experience, it could be as many as 500 hours.

It is difficult to put a financial value on 300-500 hours (or more) of your time, but you need to remember that in order to get the benefit of being a CPA you must pass all of the Exams and get your license. If you pass only two of the Exams, run out of money, or cannot retake an Exam that needs to be retaken, the time and money that you invested in passing some of the Exams will be wasted.

While the financial and time investment that you will need to make to become a CPA is an essential part of the decision, only you can determine if the CPA Exam is what you need, if you will be eligible to take it, if you will be able to get your license, and where you will be able to take the Exams.


Choosing the correct professional certification is always a difficult process. As detailed above, for candidates outside of the United States, there are significant questions to be answered before making a decision to pursue the CPA Exam. First, make certain that the CPA will help you achieve your personal and professional goals. Then, make certain that you will be able to prove eligibility, that you will have the required experience, and that you will be able to travel to take the Exams, if needed. The final step is the cost/benefit analysis of the required investment to pass the Exams. If you do not have confident answers for all of the questions discussed above, then the US CPA Exam is probably not the best professional certification for you.

If you have any questions, please do not hesitate to ask us. At HOCK we want to help make certain that you pursue the best exam for your personal and career goals.

Brian Hock, CMA, CIA

Myths & Misconceptions about Preparing for Exams

In my twenty years of helping candidates pass their certification exams, I have come across many myths and misconceptions that can cause candidates to spend more time and/or more money than they need to. These myths are often perpetuated through the marketing that companies use to differentiate themselves from their competitors. Unfortunately, this marketing can be very misleading as you research the best materials to use to study.

Myth #1: More material means better material

There are not a lot of materials that you need to prepare properly; all you need is a way to learn and way to practice. Usually, this means a textbook (but can also include videos if the videos cover the entire syllabus) and practice questions from past exams. The quantity of pages, number of questions, hours of videos, etc. is not as important as whether or not that material is complete, relevant, and prepares you to pass the exams. You generally do not need multiple question banks, either, because the question banks from each provider are usually very similar, including the same previously-released exam questions.

Myth #2: More expensive material means better material

While it is usually true that “you get what you pay for,” it is true only if what you are paying for adds value for you. When a material provider pays to receive “status” from the examiner or has an affiliate agreement with another site that “recommends” them (more on this next), these are costs that are passed on to you but do not add any value. If someone “approves” or “recommends” certain materials, be certain to find out the criteria for that recommendation. Any non-quality-based recommendation adds no value to you.

Myth #3: Review comparison sites are really unbiased

For many professional exams, there are websites that claim to offer unbiased reviews of the different providers. What is not very well known is that most of these sites receive commissions from the material providers listed on them, meaning that the reviews are not objective. Usually, the company that is rated the highest is the one that pays the highest commission to the review site. On some sites this relationship is disclosed (though often not very prominently), but on many sites it is not disclosed at all.

As an example, one of the review sites for CMA materials used to list HOCK as their #1 provider with five stars. When the owner of the site asked HOCK to join an affiliate commission program but we chose not to participate, we lost 2 stars overnight and went from first place to third place in their rankings. The change had nothing to do with the materials, but rather the review site could make money recommending other providers who would pay a commission.

Besides the undisclosed financial relationship, these sites often have incorrect and/or outdated information because they write a review and then it sits online, unchanged sometimes for years. These sites also give no mechanism for the course providers to provide updated information or to respond to the reviews if there are inaccurate or incorrect statements.

You may have noticed that there are a lot of these review comparison sites for CMA, CPA, and CIA materials that do not include HOCK. This is usually because we refused to pay a commission to the person who runs the site. I am certain that we have lost business over the years because of this decision, but I also know that it has allowed us to keep our prices more affordable for you, because we do not need to include a 20% or 25% commission mark-up in our price. What you pay for HOCK materials goes to value-added activities, and not to expensive marketing relationships.

Myth #4: Pass rates are accurate and honest

Many course providers post a pass rate for candidates who use their materials. I have written about this in the past (https://www.hockinternational.com/why-pass-rates-useless-why-we-dont-publish-them/), but these pass rates mean almost nothing because there is no straightforward and consistent way to calculate them. Which candidates are included? Or excluded? How do we determine a “pass?”

For example, if a candidate buys materials from Provider X and fails, but after purchasing Provider Y materials they pass the exam, is that candidate a “pass” for Provider X, Provider Y, or both? Does Provider X still include the first failure in their pass rate? Provider X could claim a 100% pass rate for that one student because they eventually did pass, but a 50% pass rate would be more accurate and honest.

Or, if a candidate uses materials from three providers and passes on their first attempt, who claims that “pass?” One way that you can see the inaccuracy of pass rates is by looking at all of the providers who publish pass rates. Every company claims a pass rate that is significantly higher than the exam’s published pass rate by the examining body. If these claimed pass rates were true, the real pass rate for the exam would as high as the claims made by the providers.

Myth #5: You must attend a class

For many years I taught live classes, and I know that a good class can be very helpful. However, the materials that a company sells should be sufficient to pass the exam with self-study. If you are going to study in a classroom, please make certain that the class will be value-added. See this post that I wrote previously listing some questions you should ask a classroom provider (https://www.hockinternational.com/questions-live-taught-classes/).

In addition, pay attention to the number of hours in the class. Some classes (including online classes) can include a large number of hours of instruction, which may be used to “justify” a higher price. No matter how good the teacher is, however, you need to spend time yourself studying and practicing questions. Not all of your study hours need to be instructor-led and if the class goes on too long, you are not getting any value from many of those hours.

For the CMA exam, both HOCK and the ICMA recommend 150 hours of study per part, and our videos are currently only 24 hours for Part 1 and 25 hours for Part 2. I have been teaching CMA since 2000 and we use those videos as the basis for our “You Pass or We Pay Guarantee.” If I am able to teach the content that you need in 25 hours per part, you do not need to be in a classroom for 100 hours per part.

Myth #6: Personal counselors are personal and needed

Some companies offer a personal counselor or similar service. While this sounds good, we believe that personal counselors are of limited added value to your studies. There is a specific syllabus for the exam, and every candidate must learn the material on the syllabus. You are able to determine in what areas you need additional study by looking at the statistics in your practice questions. If you have 94% for a topic, you know that topic well. If you have 43% for a topic, you do not know that topic well and you need to keep studying it. Maybe the counselor helps keep you motivated because they contact you every one or two weeks, but a good study plan can also keep you keep on track.

Besides statistics, only you know how well you understand a topic, regardless of the statistics. Are you guessing on the questions a lot? Are you confident in your knowledge as you read questions and answer them? Those are indicators about your preparedness that only you know. The counselor can’t tell you what your understanding and confidence level is.

In the end, interacting with a personal counselor adds time to your study process because the time you take talking to them or trying to meet specific administrative reporting tasks is time that you could be studying and learning the material instead.

Myth #7: There are shortcuts to passing the exam

Occasionally, a company will claim to have materials that reduce the time that you need to spend studying or have a shortcut to focus on “the right topics” for the exam. While that would be nice, there are no shortcuts! There is a syllabus for the exam and you need to learn all of it. Some common shortcuts include mnemonic devices or memory tricks, which may seem like they are working when you practice with questions that you become familiar with in the practice software, but on the exam you will have questions that you have never seen before. If you have only memorized a handful of key terms or phrases, you will not be able to answer questions on the exam that are different than the practice questions.

Using such shortcuts may reduce the amount of time you spend preparing for your first attempt on the exam, but you will spend the full amount of time later when you need to prepare to take the exam again. Not only do the shortcuts not save you any time, they cost you money as well when you don’t pass on the first attempt.

Final Thoughts

I hope that it is not too late for you to avoid some of these myths and misconceptions that could make your studies more expensive or take more time than necessary. You won’t find any shortcuts or marketing gimmicks at HOCK; instead, we will prepare you effectively and efficiently to pass the exams on your first attempt with comprehensive materials and support that give you all of the tools that you need – no more, and no less.

Brian Hock, CMA, CIA