FREE CPA Study Guide 2026: Core + Disciplines

This free CPA study guide walks through everything the Uniform CPA Examination tests, organized to the current AICPA CPA Evolution blueprint.^[1] Since January 2024 the exam is built on a Core + Discipline model, and this guide is structured the same way.

It’s interactive, not a wall of text: every module has built-in checkpoint quizzes, flashcards, and practice questions, so you learn by doing — not just reading.

You sit four sections: the three Core sections — AUD, FAR, and REG — plus one Discipline you choose from BAR, ISC, or TCP. We teach a module for each Core section and a fourth module that breaks down the Disciplines so you can pick wisely.

Read a module, test yourself at each checkpoint, then drill gaps with our free practice test and flashcards. This is a high-yield overview that maps the official blueprint — not a full accounting textbook.

CPA Exam Snapshot

The exam moved to CPA Evolution in January 2024, replacing the old BEC section with the Discipline model and adding more data and technology content across the board.^[2] Here is how the four sections fit together:

Each Core section carries its own official content-area weighting. Study to the heaviest areas first — this guide leads with them in every module:

Module 1 · Auditing & Attestation (AUD)

A Core section. AUD is about gathering enough of the right evidence to opine on whether financial statements are fairly stated. It is the most conceptual, judgment-heavy Core section — and the only one that tests the highest skill level, Evaluation.^[1] It rewards understanding relationships (risk, evidence, reporting) over calculation.

1.1 Ethics, Independence & Professional Responsibilities

Ethics & General Principles is roughly 15–25% of AUD. The cornerstone is Independence: an auditor must be independent in fact and in appearance for every attest engagement. The conceptual framework approach in the AICPA Code of Professional Conduct tells you how to handle a threat — identify it, evaluate its significance, and apply safeguards.^[4] Memorize the common threats and what creates them.

1.2 Risk Assessment & Internal Control

Assessing risk and developing a response is 25–35% of AUD. It all hangs off the audit risk model: audit risk equals inherent risk times control risk times detection risk.

Inherent and control risk are the client’s risks (together, the risk of material misstatement); detection risk is the part the auditor controls. Set a low acceptable audit risk, and the higher the risk of material misstatement, the lower detection risk must be — meaning more, better, or later testing.

To assess control risk you must understand internal control, and the exam frames it with the COSO framework: control environment, risk assessment, control activities, information & communication, and monitoring. Materiality and performance materiality set the threshold for “how big a misstatement matters,” and the auditor presumes a fraud risk in revenue recognition on every audit, applying professional skepticism throughout.

1.3 Evidence & Audit Procedures

Performing procedures and obtaining evidence is the heaviest AUD area, 30–40%. Evidence must be both sufficient (enough) and appropriate(relevant and reliable). Reliability rises with auditor-obtained and external, independent sources. Procedures test management’s Assertions — claims like existence, completeness, valuation, and rights & obligations.

Two directional tests anchor the exam. Vouching goes from the recorded amount back to the source document and tests existence/occurrence; Tracing goes from the source document forward into the records and tests completeness. Confirmations are external evidence: a positive confirmation asks the recipient to reply either way, while a negative confirmation asks for a reply only if something is wrong, so it is used only when risk is low.

1.4 Forming Conclusions & Reporting

Forming conclusions and reporting is 10–20% of AUD, and the four opinion types are guaranteed points if you know the decision logic. Two questions decide the opinion: is the issue a misstatement (a GAAP departure) or a scope limitation(can’t get evidence), and is it material but isolated or material and pervasive?

An unmodified opinion is the clean result. A qualified opinion (“except for”) covers a material-but-not-pervasive problem of either kind. A pervasive misstatement leads to an adverse opinion; a pervasive scope limitation leads to a disclaimer of opinion. Know that a SOC report lets a user auditor rely on a service organization’s controls — SOC 1 for financial-reporting controls, SOC 2 for the Trust Services Criteria.

Module 2 · Financial Accounting & Reporting (FAR)

A Core section, and the one most candidates fear. FAR has the broadest content and one of the lowest pass rates because it is calculation-heavy and the simulations build full schedules from scratch.

The payoff: FAR is the foundation for the BAR Discipline, so mastering it twice pays off. Study to the two heaviest areas — Financial Reporting and Select Balance Sheet Accounts (each 30–40%).^[1]

2.1 The Conceptual Framework & Financial Statements

Everything in FAR rests on the accounting equation: Assets = Liabilities + Equity. The Conceptual framework (FASB) sets the objective of financial reporting and its qualitative characteristics — relevance and faithful representation. Know the five core statements and what each one answers.

2.2 Assets, Liabilities & Equity

Select Balance Sheet Accounts is the second heavy area. Know inventory cost flows (FIFO, weighted-average, and LIFO — permitted under U.S. GAAP but prohibited under IFRS), lower of cost or net realizable value, receivables and the allowance method, long-lived assets and impairment, and Goodwill.

For equity, the recurring trap is treasury stock under the cost method versus the par-value method. Ratios round it out — be fluent in the core ones below.

2.3 Select Transactions

Select Transactions (25–35%) is where the famous FAR “big” topics live. Revenue follows ASC 606’s five-step model. Leases follow ASC 842: a lessee records a right-of-use asset and a lease liability, then expenses a finance lease as interest plus amortization or an operating lease straight-line.

Bonds use the effective-interest method. Business combinations use the acquisition method, generating Goodwill. And income taxes (ASC 740) create a deferred tax asset or deferred tax liability from temporary differences, while a permanent difference never reverses.

2.4 Governmental & Not-for-Profit

FAR tests basic governmental and not-for-profit accounting; the advanced material moved to the BAR Discipline.^[2] For governments, distinguish modified accrual fund statements (revenue when measurable and available, a current- resources focus) from full-accrual government-wide statements, and know that a reconciliation bridges them.^[10] For not-for-profits, net assets are reported in two classes: with donor restrictions and without donor restrictions.

Module 3 · Taxation & Regulation (REG)

A Core section covering federal taxation, business law, and tax-practice ethics. REG is heavily weighted toward taxation — entity taxation (23–33%) and individual taxation (22–32%) together are over half the section.^[1] The single most important concept across REG is basis. Note: the 2025 OBBBA (H.R.1) tax changes become testable on REG starting July 1, 2026.

3.1 Ethics & Federal Tax Procedures

Ethics and tax procedures is 10–20% of REG. Circular 230 governs practice before the IRS — due diligence, conflicts of interest, and standards for tax positions. Know the statute of limitations (generally three years to assess, six years if income is understated by more than 25%, and no limit for fraud or a non-filed return) and preparer penalty rules.^[4]

3.2 Business Law

Business Law is 15–25% of REG. The heavy hitters are contracts (offer, acceptance, consideration), agency (when a principal is liable for an agent’s acts within the scope of authority), negotiable instruments, secured transactions under UCC Article 9 (attachment vs. perfection), debtor- creditor relationships, and bankruptcy (Chapter 7 liquidation, Chapter 11 reorganization, Chapter 13 adjustment).

3.3 Individual Taxation

Individual tax (22–32%) walks from gross income to taxable income: include all income unless excluded, subtract adjustments to reach AGI, then subtract the greater of the standard or itemized deductions and the qualified business income deduction. The 20% §199A QBI deduction was made permanent under H.R.1.^[8] Know capital gains (long-term vs. short-term), the $3,000 annual net capital loss deduction against ordinary income (excess carries forward), and §1244 small-business stock ordinary-loss treatment up to $50,000 single / $100,000 married filing jointly.

3.4 Entity Taxation & Property Transactions

Entity tax (23–33%) contrasts C corporations (taxed at the entity level), S corporations, and partnerships (pass-throughs). The master concept is outside basis: a partner deducts losses only up to basis, and a distribution above basis triggers gain.

Property transactions hinge on basis too — gain equals amount realized minus adjusted basis. Know the Section 1031 exchange (real property only after the TCJA), and depreciation recapture: Section 1245 recaptures all depreciation on equipment as ordinary income, while net Section 1231 gains get long-term capital treatment and net §1231 losses are ordinary.

Module 4 · The Discipline Sections

Choose exactly one Discipline as your fourth section: BAR, ISC, or TCP. All three are 4-hour sections scored the same way (75 to pass), and your choice does not restrict your CPA license.^[2] Each Discipline deepens one of the Core sections, so most candidates pick the one that matches their career and pair it with its related Core.

4.1 Choosing Your Discipline

Pick by your strengths and where you want to work. A useful sequencing tip from candidates: take each Discipline right after its sibling Core section so related content stays fresh.

4.2 BAR · Business Analysis & Reporting

BAR is the most quantitative Discipline and a continuation of FAR. Business Analysis is 40–50% — financial-statement and ratio analysis, variance analysis, cost accounting (contribution margin, cost-volume-profit, breakeven), and forecasting.

Technical Accounting & Reporting (35–45%) picks up the advanced FAR topics that moved here: lessor leases, derivatives and hedging, stock compensation, business combinations, and revenue. State & Local Governments (10–20%) covers advanced governmental accounting.^[1] BAR has one of the lowest pass rates, so an un- remediated FAR weakness — especially government accounting — tends to resurface here.

4.3 ISC · Information Systems & Controls

ISC is the technology and controls Discipline and the most recall-heavy section (Remember/Understand is 55–65%). It is also the only section weighted about 60% MCQ / 40% simulations. Information Systems & Data Management (35–45%) and Security, Confidentiality & Privacy (35–45%) make up the bulk, with SOC Engagements at 15–25%.^[1]

The foundational distinction is IT general controls (access security, change management, IT operations) versus application controls built into individual programs — and the SOC reporting you met in AUD, applied in depth, including the Trust Services Criteria behind SOC 2.

4.4 TCP · Tax Compliance & Planning

TCP is the tax Discipline and a continuation of REG, and it has the highest pass rate (candidates self-select into it). Individual tax compliance and planning plus personal financial planning is 30–40%; entity tax compliance is 30–40%; entity tax planning is 10–20%; and property transactions is 10–20%.^[1]

It goes deeper than REG into planning — gift and estate strategies (the 2026 annual exclusion is $19,000 per donee), retirement and tax-advantaged planning, and the advanced individual and entity planning that moved here from REG. Like REG, its 2025 OBBBA provisions become testable starting July 1, 2026.

How to Use This CPA Study Guide

This guide is built to be worked, not just read. The most efficient path to passing all four sections:

• Take one section at a time. Most candidates start with FAR or AUD, then pair each Discipline after its Core (BAR after FAR, ISC after AUD, TCP after REG).
• Study to the weights. Lead with the heaviest content areas in each module — FAR’s reporting and balance-sheet accounts, AUD’s evidence, REG’s taxation.
• Check off as you go. Use the Study Guide Contents to mark each section done; it raises your exam-readiness score.
• Take every checkpoint. The end-of-module quizzes show exactly which areas need another pass before you commit to a simulation-heavy section.
• Drill the simulations. Candidates universally find task-based simulations harder than MCQs — practice building calculations from scratch with our practice test and flashcards.

CPA Glossary

The high-yield CPA terms in one place — hover any dotted term in the guide, or flip the whole deck here as a self-grading flashcard set.

Accounting equation

Assets = Liabilities + Equity; the identity that keeps the balance sheet in balance.

Acquisition method

The required method for a business combination: measure identifiable assets and liabilities at fair value and recognize goodwill or a bargain-purchase gain.

Adverse opinion

An opinion that the financial statements are materially and pervasively misstated.

Application controls

Controls built into a specific program that govern the completeness, accuracy, and authorization of individual transactions.

ASC 606

The FASB revenue standard establishing a single 5-step model for recognizing revenue from contracts with customers.

ASC 842

The FASB lease standard; a lessee recognizes a right-of-use asset and a lease liability for most leases over 12 months.

Assertions

Management's implicit or explicit claims about the financial statements (e.g., existence, completeness, valuation, rights and obligations, presentation).

Audit risk

The risk that an auditor expresses an unmodified opinion on financial statements that are materially misstated.

Audit risk model

AR = IR × CR × DR — audit risk equals inherent risk times control risk times detection risk.

Circular 230

Treasury regulations governing practice before the IRS, including standards of conduct for tax practitioners.

Conceptual framework (FASB)

The objectives and qualitative characteristics (relevance and faithful representation) underlying U.S. GAAP financial reporting.

Conceptual framework approach

The AICPA Code method of identifying threats to compliance, evaluating their significance, and applying safeguards to reduce them to an acceptable level.

Control risk

The risk that a misstatement will not be prevented or detected on a timely basis by the entity's internal control.

Core sections

The three sections every CPA candidate must pass: Auditing & Attestation (AUD), Financial Accounting & Reporting (FAR), and Taxation & Regulation (REG).

COSO framework

The internal-control framework with five components: control environment, risk assessment, control activities, information & communication, and monitoring.

CPA Evolution

The exam model effective January 2024 that replaced the AUD/BEC/FAR/REG format with 3 required Core sections (AUD, FAR, REG) and 1 chosen Discipline (BAR, ISC, or TCP).

Deferred tax asset

A future tax benefit from a deductible temporary difference or carryforward, reduced by a valuation allowance when realization is doubtful.

Deferred tax liability

A future tax obligation from a taxable temporary difference between book and tax accounting.

Detection risk

The risk that the auditor's procedures will not detect a material misstatement; the auditor controls it via nature, timing, and extent of testing.

Discipline section

The fourth section, chosen from BAR, ISC, or TCP; it does not restrict the resulting CPA license.

Disclaimer of opinion

A statement that the auditor could not obtain sufficient appropriate evidence and therefore expresses no opinion.

Effective-interest method

Bond accounting where interest expense equals the beginning carrying value times the market (effective) rate, amortizing the premium or discount.

Finance lease

A lease that, for the lessee, recognizes interest plus amortization (front-loaded expense), economically like owning the asset.

GAAS

Generally Accepted Auditing Standards — the standards governing the conduct of a financial statement audit in the United States.

Goodwill

The excess of the acquisition price over the fair value of net identifiable assets acquired; not amortized under U.S. GAAP, but tested for impairment.

Government-wide statements

Full-accrual, economic-resources statements that report all of a government's assets and long-term liabilities.

Independence

Freedom from relationships that would compromise an auditor's objectivity; required in fact and in appearance for attest engagements.

Inherent risk

The susceptibility of an assertion to material misstatement before considering related controls.

IT general controls

Entity-wide controls over the IT environment — access security, change management, and IT operations — that underpin application controls.

Management participation threat

A threat to independence arising when a member takes on management responsibilities for an attest client.

Materiality

The magnitude of an omission or misstatement that could influence the judgment of a reasonable financial-statement user.

Modified accrual

The basis for governmental fund statements; revenue is recognized when measurable and available, with a current-financial-resources focus.

Negative confirmation

A request asking the recipient to respond only if the stated balance is incorrect; used only in lower-risk situations.

Operating lease

A lease that, for the lessee, recognizes a single straight-line lease expense while still recording an ROU asset and liability.

Outside basis

A partner's basis in the partnership interest; it limits deductible losses and determines gain on distributions in excess of basis.

Pass-through entity

A business (partnership, S corporation, sole proprietorship) whose income is taxed at the owner level rather than at the entity level.

Performance materiality

An amount set below overall materiality to reduce the risk that uncorrected and undetected misstatements exceed materiality.

Performance obligation

A distinct promise in a contract to transfer a good or service to the customer.

Permanent difference

A book-tax difference that never reverses (e.g., municipal-bond interest); it affects the effective rate but creates no deferred tax.

Positive confirmation

A request asking the recipient to respond whether or not the stated balance is correct.

Professional skepticism

An auditor's questioning mind and critical assessment of evidence, alert to conditions indicating possible misstatement from error or fraud.

Qualified business income deduction

The §199A deduction of up to 20% of qualified business income for eligible pass-through owners; made permanent under H.R.1 (OBBBA).

Qualified opinion

An 'except for' opinion issued for a material but not pervasive misstatement or scope limitation.

Right-of-use asset

The asset a lessee records under ASC 842 representing its right to use the leased asset over the lease term.

Scaled score

A 0–99 score derived from raw performance and item difficulty; 75 is required to pass each section and is not a raw percent correct.

Section 1031 exchange

A like-kind exchange that defers gain on real property held for business or investment when exchanged for like-kind real property.

Section 1231

Property used in a trade or business; a net §1231 gain is treated as long-term capital gain while a net §1231 loss is ordinary.

Section 1245

Depreciation recapture rule treating gain on the sale of depreciable personal property as ordinary income up to depreciation taken.

Self-review threat

A threat to independence arising when a member must evaluate work the member's own firm performed.

SOC report

A System and Organization Controls report; SOC 1 covers controls over financial reporting, SOC 2 covers the Trust Services Criteria (security, availability, processing integrity, confidentiality, privacy).

Task-based simulation

A case-style exam question (TBS) requiring the candidate to apply knowledge — completing forms, calculations, or research — making up roughly half of each section.

Temporary difference

A difference between book and tax basis that reverses over time and creates a deferred tax asset or liability.

Tracing

Following source documents forward into the records to test completeness.

Trust Services Criteria

The five criteria a SOC 2 engagement may address: security, availability, processing integrity, confidentiality, and privacy.

Uniform CPA Examination

The single licensing exam for U.S. Certified Public Accountants, owned by the AICPA and administered with NASBA; under CPA Evolution it has 3 Core sections plus 1 Discipline.

Unmodified opinion

An audit opinion stating the financial statements are presented fairly, in all material respects, in conformity with the applicable framework.

Vouching

Tracing recorded amounts back to supporting source documents to test existence/occurrence.

CPA Study Guide FAQ

References

1. 1.American Institute of CPAs. “Uniform CPA Examination Blueprints.” aicpa-cima.com. ↑
2. 2.AICPA & CIMA. “CPA Evolution and the Core + Discipline Model.” aicpa-cima.com. ↑
3. 3.National Association of State Boards of Accountancy. “CPA Examination.” nasba.org. ↑
4. 4.American Institute of CPAs. “Code of Professional Conduct.” aicpa.org. ↑
5. 5.Financial Accounting Standards Board. “ASC 606: Revenue from Contracts with Customers.” fasb.org. ↑
6. 6.Financial Accounting Standards Board. “ASC 842: Leases.” fasb.org. ↑
7. 7.Financial Accounting Standards Board. “ASC 740: Income Taxes.” fasb.org. ↑
8. 8.Internal Revenue Service. “Qualified Business Income Deduction (Section 199A).” irs.gov. ↑
9. 9.Internal Revenue Service. “Like-Kind Exchanges (Form 8824 Instructions).” irs.gov. ↑
10. 10.Governmental Accounting Standards Board. “GASB Standards & Guidance.” gasb.org. ↑
11. 101.American Institute of CPAs (AICPA). “AU-C 200: Overall Objectives of the Independent Auditor.” aicpa-cima.com, accessed 19 June 2026. ↑
12. 102.American Institute of CPAs (AICPA). “System and Organization Controls (SOC) Reports.” aicpa-cima.com, accessed 19 June 2026. ↑
13. 103.Financial Accounting Standards Board (FASB). “ASC 805: Business Combinations.” fasb.org, accessed 19 June 2026. ↑
14. 104.Internal Revenue Service. “Topic No. 703 and Partner's Basis (Pub 541).” irs.gov, accessed 19 June 2026. ↑
15. 105.Internal Revenue Service. “How to Depreciate Property (Pub 946) and Sales of Business Property.” irs.gov, accessed 19 June 2026. ↑

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