CPA Exam For Dummies with Online Practice
Kenneth W. Boyd
- English
- ePUB (mobile friendly)
- Available on iOS & Android
CPA Exam For Dummies with Online Practice
Kenneth W. Boyd
About This Book
Get started on the path to passing the CPA exam today
Passing the CPA exam can be the first step to a long and rewarding career. With CPA Exam For Dummies, you'll get a full overview of the exam, information on how to register, the requirements for taking and passing the tests, as well as a review of the four sections. This comprehensive introductory study guide provides you with a wealth of information, including all the current AICPA content requirements in auditing and attestation, business environment and concepts, financial accounting and reporting, and accounting regulation. From start to finish, the text is designed to prepare you for each portion of this rigorous exam.
Preparing for the CPA exam can be a daunting process. With the classic For Dummies approach, CPA Exam For Dummies offers an overview and steps on how to get started. Go at your own pace to master the various sections of the exam, and use the book as a reference on an ongoing basis as you prepare for the exam portions. Dive into the book to find:
- An overview of the CPA exam, featuring exam organization and information on scoring
- A content review, including practice questions and explanations of answers
- Online bonus practice exams to boost your knowledge and confidence
- An overview of the benefits of passing the CPA exam and becoming a certified public accountant
For those seeking to pass the CPA exam and launch their accounting careers, CPA Exam For Dummies is the go-to resource for getting started!
Frequently asked questions
Information
Getting Started with the CPA Exam
- Find out what it takes to become a CPA — and why all the work is worth it.
- Become familiar with the structure of the exam and what types of skills it tests.
- Find out how to register for the exam and what to expect when you arrive on test day.
- Put together a study plan that works around your busy life to ensure that you’re as successful as possible on the exam.
So You Want to Become a CPA
Added Responsibilities with a CPA Designation
- Balance sheet and debt: A potential lender to the company may want details on the amount of debt a business already owes to creditors. Some lenders compare the company’s total debt to total assets. That ratio indicates the assets a company can sell to pay off debt, assuming that the company can’t make payments of principal and interest. You can compare this situation to using a car as collateral for a loan. If the car buyer can’t make the payments, the lender can sell the car to recover some (or all) of the amount loaned.
- Stockholders and earnings: A common-stock owner may look into the amount of earnings an entity generates. One measurement of earnings is earnings per share (EPS). EPS is defined as the company earnings divided by average common stock shares outstanding. This ratio explains the dollar amount of earnings that a business generates for each common stock share. Average common stock is defined as follows:
Many investors feel that EPS is an indication of a common stock’s value. - Regulatory requirements: Regulators require many financial institutions to maintain a certain amount of equity, which is defined as assets less liabilities. To a regulator, equity represents funds available for investors. If a financial institution violates a rule or regulation, the business can repay investors using its equity.
Considering What a CPA Does
Accounting work and controller positions
- Controllership: Controllership refers to maintaining control over the financial transactions of a company. The CFO needs to ensure that the accounting transactions are posted correctly. Controllership also refers to generating accurate and timely financial statements shortly after the end of each month and year.
- Treasury: Treasury refers to the cash needs of a company. Businesses use debt and equity in some combination to raise capital, which refers to the cash and other assets the company acquires. The decision on how much debt or equity to raise is in the hands of the CFO. The CFO plans for short-term cash needs to operate the company each month. The CFO also plans for long-term financing needs, such as planning for an expensive purchase (building, equipment, machinery, and the like).
- Financial strategy: The CFO has overall responsibility for financial strategy. This includes analyzing company profit by department or product line. A CFO is expected to recommend how each department can make changes to improve profit. Because nearly every company has a limited amount of capital, the CFO needs to analyze how that capital should be used to maximize earnings. That may mean buying a new piece of equipment for Department A and closing the operations of Department B. A CFO works closely with the company’s operations managers to make processes more efficient.
- Controller and treasurer: The CFO hires a controller to manage the accounting transactions and financial-statement process. He or she also hires a treasurer to manage the treasury activities.
- Accounting manager: A CFO, using input from the controller, may hire one or more accounting managers. These managers are responsible for certain areas of the controllership process. One manager, for example, may handle the company’s accounts receivable process. That manager processes sales, receivables, and bad-debt transactions. The position also includes reporting financial results to the controller and CFO.
- Staff accountant: Accounting managers, in turn, hire staff accountants. This type of position is responsible for the day-to-day transactions of a company. If the staff accountant works with accounts receivable, he or she reviews incoming customer payments and reduces accounts receivable. That same person analyzes credit sales and posts accounts receivable. A staff accountant position may be the first position you work in as a CPA.
Auditing, reviews, and compilations
Reviewing jobs in the field
- Partner: A partner has an investment in the partnership. The partner is responsible for the management of a particular group of audit clients. Like a CFO, the partner selects an audit staff and manages the audit. Audits involve layers of review. The audit partner is responsible for the final review of the audit work.
- Manager: A manager works for the partner. Each manager may be responsible for several audits that are in process at the same time. The manager reviews the work of the audit staff below him or her. A manager is the client contact for most of the audit client’s managers. When a question or concern needs to be discussed with the auditors, the company manager usually goes to the audit manager first.
- Senior: A senior has day-to-day responsibility for the audit work performed. This individual is present at the client’s offices during the audit’s fieldwork. Fieldwork refers to when the auditors gather evidence at the client’s offices. The auditor and the client agree on when and how long fieldwork will take place.
- Staff accountant: Staff accountants perform the bulk of the audit procedures. This may include testing accounting transactions using company documents or interviewing the client’s staff. If you join a CPA firm’s audit department, you’ll probably start as a staff auditor.