Uniform CPA Examination Blueprints: Regulation (REG)
REG3
Area II of the REG section blueprint covers several topics of Business Law,
including the following:
• Knowledge and understanding of the legal implications of business
transactions, particularly as they relate to accounting, auditing and nancial
reporting.
• Areas of agency, contracts, debtor-creditor relationships, government
regulation of business, and business structure.
- The Uniform Commercial Code under the topics of contracts and
debtor-creditor relationships.
- Nontax-related business structure content. Area V of the REG section
blueprint covers the tax-related issues of the various business structures.
• Federal and widely adopted uniform state laws and references as identied
in References below.
Area III, Area IV and Area V of the REG section blueprint cover various topics of
federal income taxation and gift tax. Accounting methods and periods, and tax
elections are included in the Areas listed below:
• Area III covers the federal income taxation of property transactions. Area III
also covers topics related to federal gift taxation.
• Area IV covers the federal income taxation of individuals from both a tax
preparation and tax planning perspective.
• Area V covers the federal income taxation of entities including sole
proprietorships, partnerships, limited liability companies, C corporations,
S corporations, joint ventures, trusts and tax-exempt organizations, from
both a tax preparation and tax planning perspective.
Section assumptions
The REG section of the Exam includes multiple-choice questions,
task-based simulations and research prompts. Candidates should assume
that the information provided in each question is material and should apply
all stated assumptions. To the extent a question addresses a topic that could
have different tax treatments based on timing (e.g., alimony arrangements
or net operating losses), it will include a clear indication of the timing (e.g.,
use of real dates) so that the candidates can determine the appropriate
portions of the Internal Revenue Code or Treasury Regulations to apply to
Section introduction
the question. Absent such an indication of timing or other stated assumptions,
candidates should assume that transactions or events referenced in the question
occurred in the current year and should apply the most recent provisions of the
tax law in accordance with the timing specied in the CPA Exam Policy on New
Pronouncements.
Skill allocation
The Exam focuses on testing higher order skills. Based on the nature of the task,
each representative task in the REG section blueprint is assigned a skill level. REG
section considerations related to the skill levels are discussed below.
• Remembering and understanding is mainly concentrated in Area I and Area II.
These two areas contain the general ethics, professional responsibilities and
business law knowledge that is required for newly licensed CPAs and is tested
at the lower end of the skill level continuum.
• Application and analysis skills are primarily tested in Areas III, IV and V. These
three areas contain more of the day-to-day tasks that newly licensed CPAs are
expected to perform and therefore are tested at the higher end of the skill level
continuum.
The representative tasks combine both the applicable content knowledge and
the skills required in the context of the work that a newly licensed CPA would
reasonably be expected to perform. The REG section does not test any content at
the Evaluation skill level as newly licensed CPAs are not expected to demonstrate
that level of skill in regards to the REG content.
Skill levels
Evaluation
The examination or assessment of problems, and
use of judgment to draw conclusions.
Analysis
The examination and study of the interrelationships
of separate areas in order to identify causes and nd
evidence to support inferences.
Application
The use or demonstration of knowledge, concepts
or techniques.
Remembering and
Understanding
The perception and comprehension of the
signicance of an area utilizing knowledge gained.
Regulation (continued)