What is the Ethics Exam and is it a CPA Requirement?

As a CPA candidate, it is important to know what is required to become a CPA. Different states have different requirements, so always check with your State Board of Accountancy to ensure you’re on the right track when you begin your CPA journey. 

In many jurisdictions, one of the CPA licensure requirements is passing the American Institute of Certified Public Accountant’s (AICPA) ethics exam. The ethics exam is typically the final requirement for obtaining CPA licensure. Since the ethics exam is not required in every state, it is usually not on many candidates’ radar during their CPA journey. However, if you are one of the lucky CPA candidates who must take the ethics exam as the final step before obtaining licensure, you might find that it’s not as difficult a requirement as the others are to meet. 

The ethics exam for CPA licensure is generally taken before, during, or after the CPA Exam, but most candidates wait to complete it after they pass the CPA Exam. The results from the ethics exam are good for a two-year period. 

The ethics exam encompases the AICPA Code of Professional Conduct and Accounting Rules and assesses how a CPA candidate would handle ethical questions that might be encountered during their accounting careers. CPAs are expected to act with both honesty and integrity as they work with individuals and companies. So, the ethics exam exemplifies the type of conduct expected and required of a licensed CPA.

Why is the Ethics Exam Required?

CPAs are required to engage with and manage highly sensitive financial information. Therefore, it is important that they understand the importance of being trustworthy for the greater good of the profession. Ethical accountants play an important role in maintaining integrity in an ever-evolving world. 

What to Expect on the Ethics Exam

Below is the information you’ll need to know if you find yourself in one of the states that requires the ethics exam prior to becoming a CPA. 

1. The AICPA provides what is typically eleven hours of course material about the principles of professional ethics for CPAs and how to navigate these concepts in the real world. The topics included in the course cover legal and regulatory issues, code of conduct expected from the AICPA, and independence issues between client and employer.
2. The exam consists of 40-multiple choice questions.
3. The exam is an open-book test, so you can use self-study resources.
4. You can take the exam at home, work, or anywhere you have access to the internet.
5. Candidates are given three opportunities to pass the ethics exam.
6. The passing score for the ethics exam is a 90 or higher.
7. The ethics exam is administered by the AICPA. However, there are some states, like California, that administer the ethics exam. Like most CPA requirements, check with your State Board of Accountancy to find out if you need to take the exam and if they administer it.

If you are ready to take the CPA Ethics Exam, go to the AICPA Website or your State Board of Accountancy to register. If your state does not require the ethics exam, you still might have an ethics requirement in the form of an ethics course. If this is the case, your State Board of Accountancy will be able to direct you on where and how to register for the course for credit and to finalize your CPA credential. For more information on CPA Requirements, visit https://accounting.uworld.com/cpa-review/cpa-career/cpa-requirements/.