Where To Register For Cpa Exam Reg Part

CPA Exam REG Section

REG CPA Exam (Regulation) exam section tests a candidate's competency in applying the concepts of federal taxation, business law, and ethics. It is a four-hour examination with fifteen minutes interruption.

In the REG examination section, the main focus is on federal taxation. Federal taxation accounts for more than 50% of the examination questions. And so, ready this area with the utmost dedication. Emphasize memorizing, understanding, and applying all the concepts of taxation.

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REG Pass Rates

The boilerplate pct of students passing in the REG section is around 50%. In the concluding few years, the lowest recorded pass rate was effectually 44%. However, over the years, the pass rates have shown a remarkable upward trend, especially since 2018.
Since the past three years, this section has witnessed pregnant growth in pass rates, from 47% in 2017 to 62% in 2020. The second quarter of 2020 recorded the highest pass rate of around 76%.
Despite existence a challenging examination, REG has emerged as the second-best performing department in the contempo times. In the beginning quarter of the 2021, the REG pass rate stood at 59.29%.

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CPA REG Exam Format

The REG department comprises five small blocks or sections called testlets, with two types of questions:

Multiple-option question (MCQ) – ii testlets
Chore-based simulations (TBS) – three testlets

Each MCQ testlet contains 38 questions. One testlet from TBS contains ii questions, and the other two include three questions each. The overall weightage of these two segments is equal. In the following image, T stands for testlet, and Q stands for questions.

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A candidate needs to have an exhaustive understanding of the subjects and splendid time direction skills to finish on time and perform well in this section.

CPA REG Testing Process

A candidate has to take five testlets consecutively (2 MCQs and 3 TBSs) in the REG exam section. The AICPA labels the MCQ testlets as either 'hard' or 'medium,' depending on their difficulty levels.

#ane – MCQ Testing Process

AICPA uses a multistage adaptive test delivery model for the MCQ testlets. The first testlet is of the aforementioned difficulty for all the candidates. On the other paw, the second testlet is based on their performance in the outset testlet.

The candidates with a weaker operation in the commencement testlet get a medium-level second testlet, whereas the candidates who perform well become a difficult testlet.

Please annotation that scores for each question are factored in based on the difficulty of that particular question. A medium testlet doesn't ensure amend scores.

#2 – TBS Testing Procedure

The TBS testlets are common for all the candidates. The candidates get the TBS testlets afterward completing the second MCQ testlet. One time submitted, candidates cannot retake a testlet.

The scores of private sections (MCQs & TBSs) are scaled and weighted according to the AICPA's policy such as the answer to the question existence right and its relative difficulty. For more details related to grading, bank check the section below.

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CPA REG Question Types

There are two types of questions in the REG section.

#i – Multiple-Choice Questions (MCQ)

The multiple-choice questions nowadays multiple answer options, and the candidates accept to select the correct i. They appear in the first two testlets of the REG section.

#2 – Task-Based Simulations (TBS)

Task-based simulations are real-life instance study questions that examination candidates' ability to use the principles and concepts learned. They announced in the last iii testlets of the REG department.

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All questions in this section (MCQ and TBS) are either pretest or operational.

Operational Questions – The operational questions are the ones that contribute to a candidate'south overall score. There are 64 operational questions in MCQ and 7 in TBS.
Pretest Questions – Pretest questions are non scored. The AICPA puts them in the test to meet their viability in hereafter exams. These pretest questions are likely to exist seen in the forthcoming exams. There are 12 pretest questions in MCQ and one in TBS sections.

Keep in mind that a candidate cannot identify such nomenclature in the examination, then it is advised non to ponder it too much.

How is CPA REG Graded?

On a scale of 0 to 99, a candidate must score a minimum of 75 to laissez passer the REG test section. Both the MCQ and TBS sections contribute 50% each to the final score. The overall score of the REG section is a weighted combination of scaled scores of all testlets (MCQ and TBS).
MCQs behave weightage co-ordinate to their difficulty. A candidate performing well in the outset testlet might confront a hard testlet in the next circular. A difficult testlet implies that the questions would be carrying a college weightage than the others. This is where a candidate can increase the overall score.
AICPA does not score TBSs according to their difficulty. Please note that in that location is no negative scoring. So, delight make certain to attempt all questions.

CPA REG Exam Content

To assist you lot sympathise better, we have put together some of the Acts that form a crucial part of the REG department:

Compatible Accountancy Act
Compatible Commercial Code
Treasury Regulations
Internal Revenue Lawmaking of 1986, as amended
Treasury Department Circular 230
Public Law 86-272
Uniform Division of Income for Tax Purposes Act (UDITPA)

The AICPA divides the unabridged syllabus into areas, groups, and topics. Each section has a dissever weightage. As per AICPA CPA Exam Blueprint, below is a table briefly describing the syllabus for REG Section. From the post-obit pause-up of the content, it is evident that federal taxation forms a meaning portion of the REG section.

South.No.	Content Grouping	Topics	Weightage
i.	Ethics, Professional Responsibilities, and Federal Tax Procedures	i. Ethics and responsibilities in tax exercise • Regulations governing practise before the IRS • Internal Revenue Code and regulations related to tax return preparers two. Licensing and disciplinary systems iii. Federal revenue enhancement procedures • Audits, appeals, and judicial process • Substantiation and disclosure of tax positions • Taxpayer A taxpayer is a person or a corporation who has to pay taxation to the government based on their income, and in the technical sense, they are liable for, or subject to or obligated to pay tax to the authorities based on the state's revenue enhancement laws. read more penalties • Authoritative hierarchy 4. Legal duties and responsibilities • Mutual law duties and liabilities to clients and third parties • Privileged communications, confidentiality, and privacy acts	ten-20%
two.	Business Law	1. Agency • Authorization of agents and principles • Duties and liabilities of agents and principles ii. Contracts • Formation • Performance • Discharge, breach, and remedies three. Debtor-creditor relationships 4. Federal laws and regulations 5. Business structure Business organization structure is the legal framework adopted by a company to execute business activities in compliance with the corporate rules and regulations. An organisation tin be a sole proprietorship, partnership, express liability company or corporation. read more • Pick and formation of business entity and related operation and termination • Rights, duties, legal obligations and say-so of owners and direction	ten-20%
3.	Federal Taxation of Property Transactions	1. Acquisition Acquisition refers to the strategic movement of one company buying some other company past acquiring major stakes of the firm. Usually, companies acquire an existing business to share its customer base of operations, operations and market presence. It is one of the popular ways of business organisation expansion. read more and disposition of assets • Basis and property period of assets • Taxable and nontaxable disposition • Corporeality & character of gains and losses, and netting procedure (including installment sale An installment sale is a revenue recognition method. The seller allows the heir-apparent to make payment in installments over the specified menstruation without fully transferring gamble and rewards at the fourth dimension of sale. The seller recognizes the revenue and expense while collecting cash rather than at the time of sale. read more than ) • Related political party transactions (including imputed involvement Imputed Involvement is an involvement inferred by the regime for a particular prepare of transactions that involve payment made to someone past someone who essentially bears the nature of loan without charging interest or charging at a much lower rate than imputed interest where such interest is used to summate the tax to be attack such transaction. read more than ) • Cost recovery The Toll Recovery Method is one of the acquirement recognition methods in which the visitor does not record gross profit or income generated confronting appurtenances sold to customers until the total cost element related to the respective sale has been fully received by the visitor from the customer. Afterward the total cost corporeality has been received, the remaining amount is recorded as income. read more (depreciation, depletion, acquittal) • Gift tax A gift tax is levied on transferring belongings from one person to another when the person who receives the property does not pay the fair value. Revenue enhancement is imposed on the person making the souvenir and not on the receiver of the souvenir. read more	12-22%
4.	Federal Taxation of Individuals s (including tax grooming and planning strategies)	1. Gross income The difference between acquirement and cost of appurtenances sold is gross income, which is a profit margin made by a corporation from its operating activities. It is the corporeality of money an entity makes earlier paying non-operating expenses like involvement, rent, and electricity. read more (inclusions and exclusions) 2. Reporting items from pass-through entities The laissez passer-through entity tin can be divers as a process by which any system is relieved from double taxation burden. In guild to avoid the double taxation, business organization income is considered to be the personal income. read more 3. Adjustment and deductions to arrive at adjusted gross income and taxable income The taxable income formula calculates the total income taxable under the income tax. It differs based on whether you lot are calculating the taxable income for an individual or a business corporation. read more than 4. Passive activity losses (excluding foreign tax credit implications) 5. Loss limitations 6. Filing status seven. Ciphering of tax and credits	15-25%
5.	Federal Taxation of Entities (including tax preparation and planning strategies)	one. Tax treatment of formation and liquidation Liquidation is the process of winding up a business or a segment of the business organization by selling off its assets. The amount realized by this is used to pay off the creditors and all other liabilities of the business in a specific order. read more than of business entities 2. Differences betwixt book and revenue enhancement income (loss) 3. C corporations According to US tax laws, any corporation that is not a S corporation is considered a C corporation, which has a different legal status and is taxed accordingly. It has its ain articles of incorporation that defines its activities and is held by the shareholders, while its liability is limited. read more • Computations of taxable income, tax liability, and allowable credits • Net operating losses The term "net operating loss" refers to an operating loss that occurs when a company's expenses exceed its revenues in a given menstruation and is reflected in the accounting books in the period when the company's allowable tax deductions exceed electric current taxable income. read more than and capital loss limitations • Entity/owner transactions, including contributions, loans, and distributions • Consolidated tax returns • Multijurisdictional tax problems (including consideration of local, country & international problems) four. S corporations is some other topic covered under the REG CPA exam. The topic covers • Eligibility and ballot • Determination of ordinary business income (loss) and separately stated items • Footing of shareholder's interest • Entity/possessor transactions (including contributions, loans, and distributions) • Congenital-in gains revenue enhancement v. Partnerships • Determination of ordinary business income (loss) and separately stated items • Ground of partner'southward interest and basis of assets contributed to the partnership • Partnership and partner elections • Transactions between a partner and the partnership (including services performed by a partner and loans) • Impact of partnership liabilities on a partner's interest in the partnership • Distribution of partnership assets • Ownership changes six. Express liability companies Limited liability refers to that legal structure where the owners' or investors' personal assets are not at pale. Their accountability for business loss or debt doesn't exceed their capital investment in the visitor. It is applicative in partnership firms and limited liability companies. read more 7. Trusts eight. Tax-exempt Taxation-exempt refers to excluding an individual'due south or corporation's income, property or transaction from the tax liability imposed by the federal, local or state government. These exemptions either allow full relief from the taxes or provide reduced rates or charge tax on some items but. read more than organizations • Type of organizations • Unrelated business income	28-38%

Delight prepare a report schedule, keeping in mind the weightage assigned to each group. Furthermore, the AICPA'southward CPA Exam Blueprints comprehensively specify the content and skill levels tested for the REG exam section.

How Difficult is it to Laissez passer REG?

CPA is one of the most challenging exams to laissez passer. All the four sections are undeniably tough. Although the pass pct has been around fifty% in the past decade, the vast form makes it hard to ensure quality training.
The REG section tests a candidate for skills to match the high standards required for revenue enhancement practice. Information technology is considered a challenging exam department as it involves memorizing many laws and regulations related to taxation, which are subject to frequent changes.
Apart from memorizing, a candidate must use his/her reasoning ability to answer real-world task-based questions. The length of the examination is another factor that makes this section hard to crack.
To clear this section, a candidate must have a thorough understanding of the construction and content of the examination. The design or the type of questions shouldn't come every bit a stupor to the candidate.

Skill Levels Tested in REG Exam

The CPA exams A Certified Public Auditor (CPA) is a US state board-issued license to practice the accounting profession read more unremarkably examination candidates based on four skills, remembering, awarding, assay, and evaluation. The REG examination section checks the candidate for all these skills except for evaluation.

A candidate expected to memorize the provisions and sympathise their underlying purpose. Based on the understanding, candidates are supposed to express their skills in the application of these provisions.

The weightage of each skill in the REG section are as follows:

S.No.	Skills Tested	Weightage
i.	Memorizing and understanding	25-35%
2.	Application	35-45%
iii.	Analysis	25-35%

When should I take the REG CPA Exam?

It is a crucial decision to place the REG section in the proper sequence to perform well. The candidates are supposed to consider many factors while deciding the timing of the test.
Commencement and foremost is their liking towards the subject field. Some candidates, who accept a thing for taxation and law, can consider taking this department first. Also, candidates should be enlightened of their strengths and weaknesses. If you feel that you are sufficiently prepared for REG, you could opt for the exam during the 18 months every bit it will not take abroad the preparation time of other sections.
Since the REG section mainly comprises federal tax laws, a candidate with prior feel in taxation could too appear for this section outset. The course requires a considerable corporeality of memorization, which could be difficult without working in the relevant field. However, candidates who are generally good at memorizing can give information technology a shot first.
Candidates with no prior experience in taxation, general dislike for the subject or insufficient preparation may schedule information technology first. Doing and so will get out them more than preparation time as opposed to the restrictive 18-calendar month period.
Nonetheless, some may argue that appearing for this section first and not clearing it tin deter and demoralize them. So, the candidates must accept this call themselves according to their circumstances.

REG CPA Exam Time Direction

All CPA exams are for iv hours. With limited fourth dimension and a multitude of tough questions, fourth dimension management is very crucial.

The MCQs (76 questions) and TBSs (8 questions) contribute 50% to the exam score. Thus, we have two hours or 120 minutes for each. Prima facie calculation tells the states that a candidate must take 1.5 minutes (120/76) for each MCQ question to finish the MCQ testlets in two hours.
Nonetheless, since MCQ questions are marked on difficulty level, allotting 1.five minutes to each question is not sensible. We must factor in extra time for difficult questions and the TBS section. Hence, a maximum of 1 minute for medium and 1.5 minutes for difficult MCQ seems ideal. So, an average of 1.25 minutes per MCQ question.
In the TBS section, we arrive at 15 minutes (120/8) for each TBS question. Since the TBS section is more often than not tough and time-consuming, xv minutes won't suffice. The time factored from the MCQ department (25 minutes) can be accommodated here. We can utilise around 3 minutes (25/8) more for each TBS question. Hence, a TBS question should not take more than 18 minutes.

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Please remember that the REG section contains a higher number of MCQs, and so don't spend more than one.five minutes on an MCQ. If you lot stumble upon a question that is likewise difficult and y'all cannot solve it within the stipulated fourth dimension, jump to the next question. Return to information technology merely if you have whatsoever time left.

Also, note that there is no time limit for each testlet. Candidates accept the freedom to manage information technology according to their comfort.

How do I Prepare for REG?

AICPA issues blueprints for each section containing the entire syllabus. It divides content into areas, groups, and topics. Every expanse has a separate weightage in the exam.

Your preparation should be according to the weightage provided in the AICPA exam blueprints. You can prioritize your syllabus according to it merely go on in heed that every surface area is crucial. You cannot afford to skip any topic. For more exam tips on the REG, check the section beneath.

What is the best way to study for the REG CPA Exam section?

Consider the following exam tips while preparing for the REG CPA section:

#one – Do not ignore Business Police force

The portion mainly consists of federal taxation, because of which many students tend to ignore or give less attention to business organization laws. CPA is a professional exam, and information technology requires a professional arroyo. Your preparation should exist towards a fool-proof study program to cover every topic at an early phase itself.

#two – Focus on applied application

The REG department requires both memorization and applied awarding of the provisions. Examinees tend to ignore the application role of the exam and only focus on learning the relevant provisions. This volition not give the desired results, and they might have to reappear.

#iii – Take a program

Having a well-structured study programme volition ever ensure that all topics are prepared well in advance. As these exams take a lot of time to set up, candidates are at the run a risk of getting drained and giving upwardly without a proper schedule.