CPA Exam Glossary

Key terms, acronyms, and definitions every CPA exam candidate should know across all six sections.

Audit Terms

AU-C: Clarified Auditing Standards. GAAS: Generally Accepted Auditing Standards. PCAOB: Public Company Accounting Oversight Board. SOC Report: Service Organization Control report. ISA: International Standards on Auditing. Substantive procedure: Audit procedure designed to detect material misstatements. Test of controls: Procedure to evaluate the operating effectiveness of controls. Sampling risk: The risk that a sample is not representative of the population.

Financial Accounting Terms

GAAP: Generally Accepted Accounting Principles. ASC: Accounting Standards Codification (FASB). IFRS: International Financial Reporting Standards. GASB: Governmental Accounting Standards Board. ARO: Asset Retirement Obligation. OCI: Other Comprehensive Income. EPS: Earnings Per Share. ROU: Right-of-Use (asset under ASC 842). PBO: Projected Benefit Obligation. DTA/DTL: Deferred Tax Asset/Liability.

Tax Terms

AGI: Adjusted Gross Income. AMT: Alternative Minimum Tax. MACRS: Modified Accelerated Cost Recovery System. QBI: Qualified Business Income. E&P: Earnings and Profits. DRD: Dividends Received Deduction. AAA: Accumulated Adjustments Account. NOL: Net Operating Loss. NIIT: Net Investment Income Tax. SE Tax: Self-Employment Tax. NTS: Notice to Schedule.

Business Terms

COSO: Committee of Sponsoring Organizations. ERM: Enterprise Risk Management. SOX: Sarbanes-Oxley Act. WACC: Weighted Average Cost of Capital. CAPM: Capital Asset Pricing Model. NPV: Net Present Value. IRR: Internal Rate of Return. CVP: Cost-Volume-Profit. ABC: Activity-Based Costing. ROI: Return on Investment. EVA: Economic Value Added.

Business Law Terms

UCC: Uniform Commercial Code. SOF: Statute of Frauds. PMSI: Purchase Money Security Interest. SEC: Securities and Exchange Commission. 10-K: Annual report filed with SEC. 10-Q: Quarterly report filed with SEC. Material misrepresentation: False statement of material fact that induces reliance. Privity: Direct contractual relationship between parties.