- ➻ by Bryan Kesler, CPA
ABOUT THE AUTHOR:
Bryan Kesler, CPA is a CPA Practice Advisor Top 20 Under 40, Licensed Certified Public Accountant, and founder of Kesler CPA Review, Community and Mentorship Platform.
- ✎ Updated
- 12 min read
- ❯ CPA Exam Structure
FAR is the section that breaks people. I say that not to scare you, but because I lived it. Financial Accounting and Reporting has the lowest pass rate of any core CPA exam section, and it covers more ground than any other part of the exam. When I was studying for FAR, I remember staring at my review course progress bar thinking, "How can there possibly be MORE content?"
But here's what I learned after helping thousands of candidates pass: most FAR failures aren't caused by a lack of intelligence. They're caused by poor time allocation. Candidates spend 80% of their study time on 50% of the content, then run out of gas on governmental accounting and task-based simulations. That's a strategy problem, not a knowledge problem.
This guide gives you the strategy. We'll cover exactly what FAR tests, how long you actually need to study, which topics to tackle first, and the specific mistakes that trip candidates up. If you're about to start FAR for the first time or you're coming back from a failed attempt, this is your roadmap.
Quick Context: Under the 2026 CPA Evolution exam structure, candidates pass 3 core sections (FAR, AUD, REG) + 1 discipline of their choice (BAR, ISC, or TCP). FAR is a core section, meaning every CPA candidate must pass it. It's 4 hours long with 50 MCQs and 7 task-based simulations.
What You'll Learn In This Guide
What Does FAR Test?
FAR stands for Financial Accounting and Reporting. It tests your understanding of U.S. GAAP, financial statement preparation, specific account balances and transactions, and governmental/not-for-profit accounting. Think of it as the section that verifies you actually know accounting at a professional level.
The AICPA Blueprints break FAR into four content areas. Here's the breakdown with the topics you'll actually see on exam day:
Covers the conceptual framework and standard-setting process, general-purpose financial statements for for-profit and not-for-profit entities, public company reporting, employee benefit plan financial statements, and special purpose frameworks. This area is about understanding what financial statements are, why they exist, and how they're structured.
The largest area on the exam. Covers cash and cash equivalents, trade receivables, inventory, PP&E, investments, intangible assets, payables and accrued liabilities, long-term debt, equity, revenue recognition (ASC 606), compensation and benefits, and income taxes. Each of these topics has its own measurement, recognition, and disclosure rules. Revenue recognition and leases (ASC 842) are heavily tested.
Covers accounting changes and error corrections, business combinations, contingencies and commitments, derivatives and hedge accounting, foreign currency transactions and translation, leases, nonreciprocal transfers, R&D costs, software costs, subsequent events, fair value measurements, and the differences between IFRS and U.S. GAAP. These are the "complex transaction" questions that often appear as TBS.
Covers state and local government concepts, CAFR format and content, deriving government-wide financial statements, and typical governmental entity transactions. Despite being the lowest-weighted area, this is where most candidates lose points because they under-study it or skip it entirely.
Source: AICPA CPA Exam Blueprints (2026)
The Government Accounting Trap: Area IV is only 5-15% of the exam, but it's the topic area most responsible for marginal failures. Candidates who score 72-74 on FAR almost always underperformed on government and not-for-profit questions. Don't be that candidate. Study it early, study it properly, and don't skip it.
FAR Pass Rate and Why It's Low
That number is worth sitting with for a moment. Fewer than half of all candidates who sit for FAR pass it on any given attempt. It consistently has the lowest or second-lowest pass rate of all six CPA exam sections, trading places with BAR.
Why? Three reasons.
First, FAR covers the most content of any section. It spans material from intermediate accounting I and II, advanced accounting, governmental accounting, and not-for-profit accounting. That's at minimum four college courses compressed into one exam. No other section comes close in breadth.
Second, governmental accounting catches people off guard. Most accounting graduates took one government accounting class years ago and retained almost nothing. When they see modified accrual, fund types, and CAFR questions on the exam, they're effectively starting from scratch on exam day.
Third, FAR's task-based simulations are notoriously complex. They often require multi-step journal entries, consolidation workpapers, or financial statement preparation from raw data. Candidates who only practiced MCQs get blindsided by the sim format.
This is also why most CPA exam advisors recommend taking FAR first. You tackle the hardest section while your motivation is highest, your study habits are sharpest, and you haven't burned through months of the 30-month credit window. If you can pass FAR, you can pass any section of the CPA exam.
See the latest FAR pass rates »
How Long to Study for FAR
The AICPA recommends 300-400 total study hours across all four CPA exam sections. FAR typically gets the largest share of that time because of its content volume.
For first-time FAR candidates, plan for 120-150 hours of focused study time. For retakers who scored above a 60, you can usually budget 80-100 hours since you already have a foundation to build on. The key word is "focused." Staring at a textbook while checking your phone doesn't count.
At 15-20 hours per week, that translates to 8-12 weeks. If you're working full-time (and most candidates are), budget 10-14 weeks to give yourself breathing room. Cramming FAR into less than 6 weeks is one of the most common mistakes candidates make. The material is simply too voluminous to absorb in a month.
FAR Study Timeline Estimator
Adjust the sliders below to get a personalized study timeline estimate.
Best Study Order Within FAR
Study order matters more on FAR than any other CPA exam section. The content builds on itself, and getting the sequence wrong can cost you weeks of rework. Here's the order I recommend based on what I've seen work for thousands of candidates:
Start with the conceptual framework and general-purpose financial statement structure. This is the skeleton that everything else hangs on. If you understand how a balance sheet, income statement, and cash flow statement fit together, every other FAR topic makes more sense.
Yes, tackle this early. I know it sounds counterintuitive. Most candidates save government accounting for last, get burned out, rush through it, and fail. By studying it in weeks 2-4 while your energy is still high, you give yourself time to actually learn fund types, modified accrual accounting, and CAFR format. You'll also revisit it during final review, which means it gets two passes instead of one panicked cram session.
This is the heaviest area (30-40%) and includes revenue recognition under ASC 606, leases under ASC 842, inventory, investments, and income taxes. Give revenue recognition and leases dedicated time. They are heavily tested and the standards are detailed enough to require multiple study sessions before the rules stick.
Business combinations, derivatives, foreign currency, error corrections, and other complex transactions. These topics often appear as task-based simulations, so start mixing TBS practice into your study sessions during this phase.
Use your course analytics and practice exam scores to identify weak spots. Do targeted MCQ sets in those areas. Take at least 2 full-length practice exams under timed conditions. Review government accounting one more time. Practice at least 20-30 TBS in this phase alone.
Study Strategy for FAR
Knowing what to study is only half the battle. How you study determines whether you pass or fail. Here's what works on FAR specifically.
MCQ volume matters. Aim for 1,000-2,000+ multiple choice questions before sitting for FAR. That sounds like a lot, and it is. But FAR's content is so broad that you need enough reps to have seen the major topic variations at least twice. The goal isn't to memorize answers. It's to build pattern recognition so you can identify what a question is testing within seconds of reading it.
Review wrong answers deeply. Don't just read the explanation and click "next." For every question you get wrong, ask yourself three things: what concept was being tested, why your answer was wrong, and what rule or framework you need to remember for next time. This takes longer per question, but it's where the actual learning happens. Candidates who answer 1,500+ questions without reviewing are less prepared than candidates who answer 1,000 questions with deep review.
Simulation practice is non-negotiable. Do at least 50+ full task-based simulations before exam day. FAR sims are the most complex on the CPA exam. They may require you to prepare journal entries from raw transaction data, complete a consolidation workpaper, or build a government-wide financial statement from fund-level data. The only way to get comfortable with these is to practice them. Many candidates do zero sims before sitting. Don't be one of them.
Government accounting needs its own treatment. Create separate flashcard decks for fund types (governmental, proprietary, fiduciary), journal entries under modified accrual vs. full accrual, and the structure of the CAFR. These topics have a different vocabulary and logic than the rest of FAR, and mixing them into your general flashcards causes confusion.
Use practice exams to find your blind spots. Take a full practice exam by week 6-7. Don't freak out at the score. Practice exam scores on FAR are typically 10-15 points below your actual exam score (this is sometimes called the "Becker Bump," though it applies to most courses). The real value of the practice exam is the topic-level breakdown showing you where you're weak. Loop back to those areas, do 100+ targeted MCQs, and then take another practice exam in week 9-10 to verify improvement.
For more study strategies, check out our 21 CPA Exam Study Tips and Kesler's Adaptive Study Funnel Plan.
Best CPA Review Courses for FAR
Your course choice matters, but how you use it matters more. That said, certain courses have specific strengths that align well with FAR's demands. Here's how the major players stack up for this section specifically:
Kesler CPA Review
FAR is a long grind and motivation is the hidden variable. Kesler's gamification keeps engagement high across 10+ weeks of study, and the mentorship program helps optimize your study plan so you're not wasting hours on topics you already know. 8,000+ unique MCQs across all 6 sections. $97/month.
Becker CPA Review
Becker's SkillBuilder videos are particularly strong for FAR's complex TBS format. Their question bank (9,000+ MCQs across all sections) covers FAR's breadth thoroughly, and the Newt AI assistant can answer specific accounting rule questions during study sessions. Starting at ~$2,499.
UWorld Roger CPA Review
Roger Philipp and Peter Olinto's shorter lectures (15-30 min) help you maintain focus across FAR's massive content. When you're grinding through week 8 of FAR study, lecture engagement matters more than you think. 9,000+ MCQs and 500+ TBS. Starting at ~$1,699.
Gleim CPA Review
With 10,000+ MCQs, Gleim gives you the most practice volume available. For a section like FAR where you need 3,000-4,000+ MCQs, having a deeper question pool means you're less likely to see the same questions on your second pass. Prep Pal AI for instant answers. Starting at ~$1,250.
Surgent CPA Review
Surgent's adaptive A.S.A.P. Technology identifies your weak areas and focuses your study time there. This is especially valuable for FAR, where the content is so broad that studying everything equally wastes time. ReadySCORE tells you when you're ready. 88% pass rate among ReadySCORE 75+ students. Starting at ~$800.
NINJA CPA Review
If your primary course's question bank isn't deep enough for FAR, NINJA is a solid MCQ supplement at a lower price point. Audio lectures are useful for reviewing concepts during a commute. Not a full standalone course, but a strong addition to any primary course.
Not sure which course fits your learning style? Compare all CPA review courses side-by-side »
Common Mistakes on FAR (Click to Check Off)
These are the mistakes I see candidates make over and over. If you can avoid all five, your odds of passing FAR go up significantly. Click each one to mark it as "noted" as you read through them.
Frequently Asked Questions About FAR
FAR is widely considered the hardest CPA exam section. It has the lowest pass rate of any core section (~42%) and covers the broadest content, spanning material from intermediate accounting, advanced accounting, governmental accounting, and not-for-profit accounting. That said, difficulty is personal. Candidates with strong government accounting backgrounds may find AUD harder. But statistically, FAR fails more candidates than any other core section.
Most CPA exam advisors recommend taking FAR first, and I agree. You tackle the hardest section while your motivation and study habits are freshest. FAR also builds the accounting foundation that makes AUD and BAR easier to understand later. And psychologically, passing FAR first gives you enormous confidence for the remaining sections. The main exception: if you work in tax and REG material is fresh in your mind, starting with REG can make sense.
Aim for 1,000-2,000+ MCQs before sitting. Volume matters on FAR because the content is so broad. You need enough reps to have seen the major topic variations at least twice. Quality of review matters too: always read the explanation for wrong answers and understand why the correct answer is correct. 1,000 questions with deep review beats 2,000 questions with no review.
You need a 75 to pass FAR (and every other CPA exam section). This is on a 0-99 scale and is not a percentage, so a 75 doesn't mean you got 75% of questions right. The score factors in question difficulty and partial credit on TBS. Harder questions are worth more points. For more detail on how CPA exam scoring works, see our exam day guide.
Plan for 120-150 hours for a first-time attempt, spread over 8-12 weeks at 15-20 hours per week. If you're working full-time, 10-14 weeks is more realistic. Retakers who scored 60+ can budget 80-100 hours. Don't go below 8 weeks. FAR's content volume requires time to absorb, review, and reinforce. Use the study timeline estimator above to get a personalized estimate.
Ready to Start Studying for FAR?
You've got the roadmap. Now it's time to pick your tools and execute. Here's what to do next:
Step 1: Choose a CPA review course that fits your learning style and budget. Try the free trials before committing.
Step 2: Build your study schedule using the timeline estimator above and the study order I recommended.
Step 3: Apply to sit for the CPA exam if you haven't already. Here's my step-by-step CPA exam application guide.
Step 4: Start studying. Seriously. The biggest mistake I see is candidates who spend weeks "preparing to study" instead of actually studying. Open your course, start the first module, and do 20 MCQs. Momentum beats perfection.
And if you've already failed FAR? Don't quit. You just discovered one way NOT to pass. Read my CPA exam retake strategy guide to come back stronger on your next attempt.
ABOUT THE AUTHOR:
Bryan Kesler, CPA is the founder of Kesler CPA Review & Ultimate CPA Exam Guide which earned him a spot on CPA Practice Advisor's Top 20 Under 40.
He has helped thousands of CPA candidates pass the CPA exam since 2013. You can contact him via email bryan@cpaexamguide.com
Link Disclaimer: Please note that some of the links are affiliate links or links to my Kesler CPA study supplement, and at no additional cost to you, assume I will earn a referral fee if you decide to invest in a course listed below. Please only use my links if you feel that I have helped you in your review course decision.