After taking an exam, students frequently ask if they should start studying for the next part right away, or if they need to wait for their results first. If you feel that you did well on the exam, I suggest that you should start studying the next part, and here’s why:
- Even if you do not pass, you will not have a lot to re-study, so you would be able to re-study while you continue studying for the next Part.
- Once you have studied for an exam, you are the habit of studying. If you take more than a week or two off, it will be harder to start studying again later than if you just continue studying without a long gap.
- You will need to take all of the Parts eventually, so there is nothing to gain by waiting.
If you leave the exam knowing that you failed or did poorly, then I recommend you take a short break (no longer than a week) and start preparing to re-take that same Part, and then you should retake that same Part as soon as possible.
During your break, you should also think about your study materials and try to determine if your study materials contributed to your poor results. If there were questions on the exam that you did not think that the material covered, or covered poorly, then you might want to consider looking into other study materials for your second attempt.
If you determine that you need some additional materials, here are some things to keep in mind:
- Most of the question banks are going to be very similar among all of the providers because all providers should be using the same previously released exam questions as the basis for their question bank. Therefore, you normally should not purchase a second question bank.
- If you have a textbook from one company, it might be a better investment to purchase videos from another company instead of a second textbook. If the videos cover the entire syllabus (like the HOCK Videos do), the Videos will not only provide a different approach to some of the topics but also provide a different style of learning, which may be useful.
- If you decide to purchase HOCK materials as additional materials, be certain to take advantage of our “Switch to Hock” Discount. We know materials are expensive and want to help you when you are purchasing a second set of materials.
The time period after you take the exam and before you get your results is a period of anxiety. But, you can use this time wisely by preparing to either take the next exam or prepare to retake the exam that you just took. Whether it is the same exam or the next exam, we are confident that HOCK can help you pass the exam. Learn more about our CMA, CIA, and CPA exam materials and start studying today!
Brian Hock, CMA, CIA
When we talk about professional certification exams, we generally think of people with jobs taking the exams to advance their career and increase their earnings potential. However, if you are a university student in accounting or finance, you should seriously consider taking a relevant certification exam while you are still a student.
If you would like to be an internal auditor, you should take the Certified Internal Auditor Exams (3 exams). If you would like to work in management accounting or finance, you should take the Certified Management Accountant Exams (2 exams). If you would like to go into auditing, you should take CPA or ACCA (or other similar certification), depending on the required certification for auditors where you live.
No matter which exams you take, there are three reasons that you should start your Certification while you are still at university:
- You save money. Registering for the exams is cheaper if you do so as a student. For example, the costs of taking the 2 CMA Exams as a professional is $1,325, but the cost of taking them as a student is only $849. Additionally, some of the certifications have scholarships for students that make the registration for the exams free. You should contact the local Chapter of the organization that gives the certificate and ask if there are any student scholarships available for you.
- It is easier to study. While you are a student, you probably have studied many of the topics on the exams in your classes. This means that your studying for the exams is more of a review of these topics, and you can prepare more quickly while everything is fresh in your mind.
- It will help you get a job. It is a very competitive market for graduates in accounting and finance, and anything that you can do to differentiate yourself will help you get a better job and/or the job that you really want. By taking the exams (even if you have not passed them all yet) you are showing a prospective employer that you are serious about your profession and that you are also making a positive distinction between yourself and everyone else who graduated but did not take any exams.
We welcome any students (or professionals) with questions to contact us and we will be glad to discuss certifications and how to prepare to pass the exams. The sooner you start your professional exams, the sooner you will benefit from them.
If you are a university student, send us a copy of your unexpired student ID at email@example.com to get the 35% discount.
Brian Hock, CMA, CIA
In this video, HOCK international President Brian Hock discusses two of the main benefits of having professional certifications:
- Provides a differentiating factor when competing for a job
- Offers networking through a professional organization
We frequently hear from students after they take an exam, “The questions on the exam were different than the practice software!” Yes, that is both correct and expected because the examiners are constantly adding new questions to the exam that are different than the previously released exam questions. If the questions tested on the exam were available in advance, you could prepare for the exam just by memorizing all of the questions. The CMA, CPA, or CIA would not be a very valuable professional certification if this were the case.
What this means for you is that the books and videos that teach you the concepts are the most important part of your studies. If you understand the topics tested on the exam, you can answer any questions asked, even if it they are different than the ones you practiced. Just memorizing how to answer the questions that have been asked before will not prepare you to answer the new and different questions that you will see on the exam.
Brian Hock, CMA, CIA
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.
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
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?
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.
1. Not looking at sample materials before making a purchase
We talk, email, and chat with a lot of exam candidates, and too often we hear from students who spent a lot of money – sometimes over $1,000 – on a competitor’s course only to find out that the materials are not easy to understand, not complete, or don’t come with teacher support. Fortunately, there is a very easy solution to this problem: thoroughly review the sample materials that each provider offers on their web site. Don’t just sign up and flip through the book, but sit down and read a section of the textbook, answer practice questions, and watch some of the videos as if you had purchased the materials and are using them to prepare. Ask the provider some questions, and evaluate if the answers are prompt, complete, and professional.
What should you do if a provider does not provide free samples? If a provider does not want you to see their materials, I would assume that it is because they know that they are not very good, and therefore you should not consider that provider. Here at HOCK, we are proud of our materials and want candidates look at them before buying because we are confident in the quality of our materials.
2. Overestimating what they already know
While relevant work experience and education are very helpful for passing the exam, many candidates assume that the questions on the exam should be answered the same way that they would be at work. This is not always the case, however, because usually the exams have to simplify the real world in order to make questions that can be solved in the time frame allowed by the exam. In the real world, almost every decision must consider quantitative and qualitative factors and everyone will assess those factors differently. On the exam, there is a correct way to make a calculation and a correct decision. Candidates with a lot of real-world experience still need to answer the past exam questions to understand how it is that the exam asks the questions and what the examiners consider to be the correct answers.
3. Underestimating the value of practice questions
Answering practice questions is critical to preparing to pass an exam, for a number of reasons:
- “Practice makes perfect.” While the goal is not perfection, practicing the questions will absolutely increase your understanding and therefore your exam score.
- You learn how the examiners have asked questions in the past.
- There is a learning curve in the amount of time that it takes to read and answer a question. For candidates who are concerned about running out of time (which is most candidates) taking the exam, you need to go through this learning curve months before the exam, not during the exam.
- You do learn from your mistakes. Learning from missed practice questions should not be your primary learning tool, but making mistakes can reinforce concepts and also show common mistakes and pitfalls. Again, it is best to learn these lessons while practicing and not on the real exam.
4. Underestimating the benefit of asking questions
If there is something that you do not understand after reading the textbook, answering the practice questions, and making a reasonable effort on your own, there are three things that you can do with that topic:
- Research the topic and teach it to yourself.
- Hope that you will not be asked about that topic on the exam (a risky strategy).
- Ask your provider for help.
Not only is it more effective to ask an exam expert, it is also the most efficient use of your time. Most likely your provider will be able to answer the question quickly, or let you know that the question you are asking is outside the scope of the exam. In either case, you have received an answer without spending a lot of your time trying to do the job of your provider, or perhaps trying to learn something that is not on the exam.
5. Starting too late to prepare
One of the most common questions that exam candidates ask us is “How many hours should I study?” Your material provider should give you a suggested number of hours. Of course, this is only a starting point and depending on your background, you may need to adjust the number of hours.
Let’s say that the recommended number of study hours is 100. On one hand, this is a simple math question: if you need to study 100 hours and you plan to study 5 hours a day, you theoretically will be ready in 20 days, or three weeks. On the other hand, there is a limit as to how many hours you can effectively study in a day or week on a long-term basis. Even if you can study all of the hours in a short period of time, some topics require additional time to “sink in” beyond just the hours you spend studying. So, not only is a certain number of hours required, but there is also a minimum amount of time for understanding.
Overall, most people have in mind 3-4 months to prepare for an individual exam, and that is a good rule of thumb to use. Yes, some people can prepare for an exam in 1-2 months, but for the vast majority of people, 3-4 months is a good amount of time to be able to prepare comfortably and pass confidently. You cannot cram 3 months of learning into 2 weeks, no matter how many hours you study per day.
Occasionally, a student will contact us asking about a different way that they have to calculate an answer to an example or question in our CMA, CIA, or CPA materials. While these alternative ways are sometimes valid, a professional exam is not the place to try out a new theory, disagree with the syllabus, or experiment with an alternate method.
It is true that there are some things on the exams that can be calculated in more than one way. I know that there are different procedures and different ways to calculate a number or ratio that vary from company to company. However, for a professional exam, there is one way to correctly calculate a ratio and usually one way of how a process should be completed. For example, there may be dozens of ways to do a capital budgeting assessment in practice, but for the CMA exam, there are only a limited number of ways that are acceptable.
So, when you are studying for or taking the exam, remember that the questions will be asked from a certain perspective and will use specific processes and calculations. If you have questions about the “right” way to do something for the exam, remember that the “right” way is the way in your materials, because that is the way that the correct answer will be calculated on the exam.
Brian Hock, CMA, CIA
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