Certified public accountant (CPA)

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Your guide to becoming a certified public accountant

There are many different certifications available for accounting professionals. If you’re interested in specializing in forensic accounting, you can become a Certified Fraud Examiner (CFE). If you want a prominent career in auditing information systems, become a Certified Information System Auditor (CISA). If your goal is to be a specialist in management accounting, think about becoming a Certified Management Accountant (CMA). However, you have the highest chances of a successful career with access to high-profile roles in the accounting world when you become a Certified Public Accountant (CPA).

The CPA designation is a certification awarded by the American Institute of Certified Public Accountants (AICPA) institution which organizes the Uniform CPA Examination in every state jurisdiction. A professional in the accounting field chooses to become a certified public accountant for many reasons. This type of certification offers great advantages in the accounting field, and we’ve listed some of the most important ones below.

CPA and credibility

In the world of business, credibility plays a crucial part. That is why accounting professionals who obtain the CPA certification gain a critical advantage in the field in terms of how they are perceived both by employers and their peers, which leads to greater access to higher-ranked positions, increased earnings, and all-in-all better opportunities.

CPA and employment opportunities

In the world of business, credibility plays a crucial part. That is why accounting professionals who obtain the CPA certification gain a critical advantage in the field in terms of how they are perceived both by employers and their peers, which leads to greater access to higher-ranked positions, increased earnings, and all-in-all better opportunities.

CPA and a level of income

If you become a certified public accountant, you’ll generally earn more than people in a similar role who have not obtained this type of licensure. BLS notes that, depending on the state you work in as a CPA and your level of experience, your salary can go as high as $150,000, which is double the median salary accountants earned in 2019.

CPA and employment stability

When you hold such an important qualification in your field of work, chances are you’ll keep your job longer and easier than other professionals who have not obtained it. When in dire straits, employers will more likely lay off people less qualified than professionals with high credentials, work experience, and practical skills.

Accounting certifications make a difference

Certifications show that you have a specific – typically high or very high – body of knowledge and skillset in your field of activity and that you meet standards that are officially recognized. The fact that there is a standardized process in place that one must go through to obtain them makes certifications excellent measuring tapes for employers who want to analyze potential hires or evaluate the performance of their current workforce.

When they acquire services provided by a certified professional, employers have the confidence they will receive high-quality results. Thus, obtaining a certification drives employee motivation and becomes an important goal in their careers. And it’s no secret why this happens – certified professionals have a competitive advantage over non-certified candidates in the recruitment process, meaning more, better paid, and higher-level employment opportunities.

Is becoming a CPA the right choice for you?

According to AICPA, you need to have a set of skills – both personal and professional – to become a CPA. First, you must have solid mathematical skills, an excellent eye for detail, and a keen interest in finance, business, and economics.

Accountants interpret, compare, and analyze numbers, so you need to have excellent problem-solving and decision-making abilities. You need to have excellent organizational skills to conduct extensive research, compile and organize reports. You must be well versed in working with current accounting software and information-processing programs and understand how technology impacts day-to-day operations in a business environment.

You need great communication skills as you’ll be working in a team and with other people, departments, and organizations. Punctuality and empathy are also essential qualities, as you’ll have to meet tight deadlines and be able to understand the challenges that others are facing. Honesty and integrity are paramount in any and every business, so you possessing high ethical standards is key.

Lastly, it’s not easy to become a CPA. It takes a lot of years of study, work experience, commitment, motivation, and hard work to get there, in addition to the associated costs. If you lack any or all the above, chances are becoming a certified public accountant may not be the right choice for you.

How to become a Certified Public Accountant

It may be a rewarding decision to become a certified public accountant, but the road to that moment when you can call yourself CPA is a long and winding one. It takes many years of study and at least 2 years of documented work experience in the accounting field to be accepted to sit for the CPA exam. But let’s go back to the start and look at every step in more detail.

1. Meet the education requirements

AICPA says that “to get your license, keep 3 E’s in mind: education, examination, and experience.” The first step towards becoming a CPA is education, and without it, you cannot meet the examination admission requirements. The educational criteria vary from one state to another as every jurisdiction in the United States has the power to impose its own entry requirements. Generally, you’ll be asked to prove that you have earned 150 semester credit hours. For more information, see a complete list of education requirements by state.

There are many ways in which you can accomplish that number. The traditional – and probably the most straightforward – way to do it is by graduating with a bachelor’s in accounting, which gives you 120 credit hours, and then earning a master’s in accounting program for the remaining 30 credits needed.

Check out the best bachelor’s in accounting and best master’s in accounting programs.

However, not all states require that applicants hold a BA in accounting, so you may have a level of freedom in deciding which degrees to include to meet your end goal. Basically, in some states, you can choose any combination of accounting degrees that you like which can give you the 150 credit hours needed to sit for the CPA examination.

What does matter is that these 150 credits provide the body of knowledge required to pass the test, offering you a thorough understanding of CPA guidelines so that you can meet the admission criteria.

2. Find out if you are eligible

Unfortunately, many people apply to take the CPA exam without knowing if they qualify. As already mentioned, every state has its own eligibility criteria for the CPA examination. Most – though not all – ask candidates to hold a bachelor’s and a master’s in accounting, and all of them require applicants to meet the education criteria of 150 semester hours. Before you submit your application, check if you meet all the requirements in the state jurisdiction where you want to sit for the exam.

3. Apply to take the CPA exam

After confirming that you are eligible to take the exam, you can start preparing your application. The first step in that process is to collect and send all your transcripts to the board of accountancy of the state in which you want to apply. After you do this, fill in the application form, consisting of personal and education-related questions.

4. Pay the application and exam fees

If the education requirements to sit for the Uniform CPA examination seem high, you may not be too surprised to discover that the fees are also steep. You have to pay multiple costs before you submit your application as well as after it is reviewed and deemed successful. Here’s a simple breakdown of the costs.

Pay the CPA application fee

The CPA exam includes the following 4 sections:

  • Auditing and Attestation (AUD)
  • Financial Accounting and Reporting (FAR)
  • Regulation (REG)
  • Business Environment and Concepts (BEC)

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

You have 6 months to take the 4 exams from the moment you meet all the requirements and get your Notification to Schedule (NTS). If this period of 6 months expires without registering for one of the sections, you must start your application all over and pay all the fees again if you still want to become a CPA.

Pay the CPA registration fees

Based on the state you choose to take the test in, you have to pay a different registration fee for each of the CPA examination sections. The registration costs around $200 if you choose to sign up for all 4 sections at once. However, given that you have 6 months to pass all 4 exams, you can do one section at a time, which increases the total cost by around $75 and takes away some of the pressure.

Pay the CPA ethics exam fee

Once you have successfully passed the whole CPA examination, AICPA will ask you to take an ethics exam. The ethics exam costs around $200, and you should take this amount into consideration in the total cost of the CPA exam.

Pay the licensing fee

After you pass the Uniform CPA examination and the AICPA ethics exam, you become a certified public accountant and have to pay a licensing fee every year to retain your licensure. This yearly fee is different from state to state, ranging from $100 to $500. Know that if you don’t pay this licensing fee, you risk losing your license and will not be able to practice public accounting anymore.

Become a CPA outside of the US

If you are not a US citizen, there’s no need to worry. You can still obtain your CPA certification through an examination offered by NASBA in collaboration with AICPA. Test centers are available in the UK, Germany, Japan, Brazil, Bahrain, Kuwait, Lebanon, and the United Arab Emirates, and – just like in the case of US citizens – anyone over the age of 18 can apply to become a certified public accountant.

American Accounting Association (AAA)

The AAA gathers under one roof an extensive community of accountants from all walks of life, including the academic field.

National Society of Accountants (NSA)

NSA is a society with a core mission of helping tax and accounting professionals further their knowledge.

American Institute of Certified Public Accountants (AICPA)

AICPA is the official body that represents CPAs, developing and grading the CPA certification examination at state and national level.

American Association of Finance and Accounting (AAFA)

The AAFA connects accounting organizations, firms, and professionals throughout the United States.

International Federation of Accountants (IFA)

This organization represents accounting professionals in more than 130 countries around the world, acting as a global common ground for networking and best practices in the accounting industry.

National Association of State Boards of Accountancy (NASBA)

NASBA acts like a forum for the 55 State Boards of Accountancy in the US, which administer the Uniform CPA Examination. In partnership with AICPA, NASBA facilitates CPA examination for professionals oversees.

Financial Accounting Standards Board (FASB)

FASB is an independent organization that sets the standards for public and private organizations following Generally Accepted Accounting Principles (GAAP) in the field of financial accounting.