Business Environment and Concepts

The Business Environment and Concepts (BEC) section of the CPA Exam tests CPA candidates’ understanding of business concepts and the significance of a CPA’s professional duties and responsibilities within the larger context of the business environment.
Areas covered on the BEC Exam are:

1. corporate governance
2. economic concepts and analysis
3. financial management
4. information systems and communications
5. strategic planning and operations management.

Many CPA candidates consider BEC to be the easiest section of the CPA Exam. However, BEC pass rates have historically been only slightly higher than those for other sections, and the exam still requires a serious study effort.

BEC EXAM CONTENT

1. 17-27% Corporate Governance
   1. Internal control and enterprise risk management frameworks
   2. Other regulatory frameworks and provisions
2. 17-27% Economic Concepts and Analysis
   1. Economic and business cycles
   2. Market influences on business
   3. Financial risk management
3. 11-21% Financial Management
   1. Capital structure
   2. Working capital
   3. Financial valuation methods and decision models
4. 15-25% Information Technology (IT)
   1. IT governance
   2. Role of IT in business
   3. Information security/availability
   4. Processing integrity (input/processing/output controls)
   5. Systems development and maintenance
5. 15-25% Operations Management
   1. Cost measurement concepts, methods and techniques
   2. Variance analysis
   3. Process management
   4. Planning techniques