How to become a certified public accountant (CPA)

Most businesses need 2 things – a good lawyer, and an excellent CPA (Certified Public Accountant). As of August 2021, there are 669,130 actively licensed CPAs in the U.S., which represents about 15% of all accounting and finance professionals.

Credibility plays a key role in business. That is why accounting professionals who earn CPA certification gain a critical advantage, leading to better access to high-profile positions and increased earnings. As with any career, location has a massive impact on salary; but as a national average, accountants earn about $52,823 per year, while CPAs earn almost $20,000 more, at $70,942.

What is a CPA?

A CPA is a top-tier accountant who holds special certification through the American Institute of Certified Public Accountants (AICPA). CPA certification is the highest professional designation in finance and accounting. It allows accountants to perform several key functions that non-certified accountants, tax preparers, and bookkeepers cannot.

Most large accounting firms offer a salary bonus to accountants who earn CPA certification. “Once you pass the CPA, you get a bonus, and that bonus often decreases the longer it takes you to pass that exam”, says Steven L. Harris, CPA, CGMA, and a managing partner at Rubin Brown. “They want to create an incentive for you to get the exam out the way as soon as possible. In many cases, the size and stature of a firm is judged by the number of CPAs on staff. That is a major reason why firms want to have more CPAs in the organization.”

CPA requirements

The key requirements for becoming a CPA are listed below. Some states also stipulate an ethics examination (check details with your state licensing board).

• Bachelor’s degree (usually in accounting, finance, or business administration)
• 30 additional credit hours in accounting or a related discipline
• A minimum score of 75 on each section of the Uniform CPA Examination
• 1-2 years of professional accounting experience

» Read: Tips and strategies for passing the CPA exam

How hard is it to become a CPA?

Becoming a CPA is challenging – only about 20% of test takers pass all sections of the CPA licensing exam on their first try, and the total pass rate hovers at around 50%. However, the added professional opportunities and potential income available to CPAs make this certification an excellent career move.

How long does it take to become a CPA?

About 6-7 years: 5 years of college to earn the necessary 150 credits and 18 months or less to complete all 4 sections of the CPA exam.

CPA job outlook

The Bureau of Labor Statistics projects a 7% growth in job openings for all accountants and auditors between 2020 and 2030, which is about average. However, demand for CPAs specifically is likely much higher given continuing shortages of these top-tier accountants.

7 steps to becoming a CPA

The steps below outline the general path to become a CPA, but before you take any steps, check the specific requirements set out by the board of accountancy in your state or jurisdiction to ensure you know all the crucial details before you begin.

Step 1 – Earn a bachelor’s degree

A bachelor’s in accounting is likely to best prepare you for the CPA exam, but is not mandatory in all states as long as you take a sufficient number of accounting classes. Many states also accept degrees in finance or business administration, as long as you earn at least 30 accounting credits, 24 business administration credits, and at least 15 credits in upper-division or graduate classes.

Step 2 – Earn 30 additional credit hours

You will need to earn 30 additional credits beyond a standard bachelor’s degree to qualify for the CPA exam. These can be in an accounting-adjacent discipline, which can be an opportunity for aspiring CPAs to grain experience in other business disciplines.

Some states allow you to sit for the CPA exam with 120 credits, but require that you complete the additional 30 before applying for licensure. These are referred to as 2-tier states.

There are several ways to earn these additional 30 credits:

• by taking an extra year of classes at the bachelor’s level
• as part of a master’s in accounting
• by way of a special program, including accelerated bachelor’s-to-master’s; dual-degree or combined-degree; or 4+1 or 5-year accounting programs

Step 3 – Get a master’s in accounting (optional)

One way to earn your additional 30 credits is as part of a master’s in accounting, either in a traditional format, or as part of one of the alternatives listed above (accelerated, dual-degree, or combined-degree). Additionally, many programs embed CPA exam prep into the curriculum, meaning you can prepare for the exam while also earning an additional advanced credential.

Other options include a master’s in finance or MBA. “I had already been made partner when I went back to school to earn my executive MBA,” says Harris. “I was one of the youngest leaders in the firm at the time, and I wanted to be a great business-minded person instead of just being technically sound. I wanted leadership and strategy skills – to not just serve clients well by wowing them with my technical expertise – but to also serve my organization well. That’s why the MBA was the right choice for me.”

» Read: Choose the best colleges for MSA programs

Step 4 – Pass the CPA examination

The CPA exam is divided into 4 sections which are separate exams in themselves:

1. Auditing and Attestation (AUD)
2. Business Environment and Concepts (BEC)
3. Financial Accounting and Reporting (FAR)
4. Regulation (REG)

You must pass each with a score of at least 75 out of 99. The cost per section is around $200. To choose which of the 4 exams you want to take first, log on the National Association of State Boards of Accountancy (NASBA) website and follow the steps.

You have 6 months to take the first exam from the moment you meet all the requirements and get your Notification to Schedule (NTS), and 18 months total to pass all 4 sections.

Step 5 – Pass the AICPA ethics exam (most states)

The American Institute of Certified Public Accountants (AICPA) administers an ethics exam that is a requirement in most states. It usually needs to be taken within 1-2 years of passing the CPA exam and is multiple-choice, open-book, and taken online.

» Read: How accountants combat fraud

Step 6 – Get some professional accounting experience

All states require some (usually 1-2 years) professional public accounting experience before you can get your CPA license. If the experience is gained in a non-public sector, the requirement tends to be longer, sometimes up to 4 years.

The details vary significantly by state – for example, whether or not it has to be full-time work or weather teaching experience counts. It may be possible to gain professional experience abroad, as long as it is verified, and in most cases, supervised, by an accountant with an active U.S. CPA license.

Step 7 – Get your CPA license

Your state board of accountancy issues CPA licenses. As states have particular requirements, make sure you know the specifics that apply to you before you start the journey to becoming a CPA.

Most states require CPA license renewal every 1-3 years, requiring fee payment and a certain number of continuing professional education (CPE) hours to ensure CPAs remain up-to-date on all new accounting and tax laws and other changes to regulations.

Types of CPA jobs

The type of work CPAs do depends largely on the environment within which they are employed. Their essential role is to help businesses and other organizations manage their money while complying with government regulations, but the details vary significantly by sector.

• In corporations, CPAs are crucial to corporate leadership for assistance with financial regulations, particularly in the context of complex multi-state and international business transactions. They also prepare annual reports for shareholders.
• In the small businesses sector, CPAs can perform bookkeeping, but also help entrepreneurs choose the best legal structure for their business, tax plan, create a budget, and set pricing. CPAs also help small businesses with the transition to becoming a corporation.
• The NGO sector has a completely unique set of accounting rules, and CPAs can help NGOs ensure they are complying with these as well as providing assurance and auditing services.

Final thoughts

Accounting is the language of business, and CPAs are among its most fluent speakers. CPAs are a key player in organizational strategy and in holding industry accountable and ensuring compliance with financial rules and regulations, but truly exceling in the field also requires that CPAs cultivate non-technical skills.

“Accounting is far from just number crunching and spreadsheets,” says Harris. “So much of what we do is dealing with different people, personalities, and perspectives. This is especially true in public accounting, where I would say it’s a 60/40 split between technical knowledge and people skills. You may be the most technical person in the world, but if you can’t translate your knowledge so that a person that’s not as technical understands, you just can’t be as effective.”

The stringent certification criteria, including extensive educational and ethical requirements, make CPAs some of the most trusted accounting professionals in the field. Ready to start your journey towards becoming a CPA? Explore our college rankings to find the undergraduate or graduate program that fits your needs.

If CPA doesn’t sound like the accounting path for you, consider other options, such as becoming an internal auditor, financial analyst, or tax manager.