Certified public accountants (CPAs) often earn higher-than-average salaries and are in high demand. Their services are required by businesses of all sizes. As a result, CPAs have the freedom to pursue advanced careers that suit their interests.
A CPA is a certified public accountant who specializes in accounting and financial management. Preparing financial accounts and tax filings, executing audits, and counselling companies or clients on financial issues are among their key responsibilities. Those interested in becoming a CPA should start with a bachelor’s degree and work their way up to a CPA license. Candidates must first pass the Uniform CPA Examination, a difficult four-section exam. This guide delves into every step of the CPA process.
The CPA exam is the next stage after completing a Bachelor’s degree. The exam requires a minimum of 36 quarter units in accounting and 24-semester units in business studies, among other qualifications. After finishing their undergraduate program, many students choose to pursue a Master’s degree. These degrees are advantageous since they often lead to a higher wage and greater prospects for job progression. They also assist students in preparing for the CPA exam.
What Is the Step-By-Step Procedure to Become a CPA?
Aspiring accountants must obtain a Bachelor’s degree and pass an examination in order to sit for the CPA exam. The exam has four components, and a passing score of 75 out of 100 is required. While the exam is designed to put applicants to the test with difficult subjects, The exam is also extremely challenging, therefore you should prepare by attending an exam prep course or working full-time once you earn your undergraduate degree. Some people finish their fifth year of community college and then sit for the CPA exam.
The AICPA demands that candidates finish four independent portions of the exam within an 18-month period, though they can take the exam again if necessary. The CPA exam takes about 100 hours to study for each area. Candidates might use a study guide to assist them to prepare for their exams. Exam preparation materials will ensure that you study all of the subjects on the exam and that you are not overwhelmed by the procedure.
CPA license does not necessitate graduate-level training. A master’s degree in accounting, on the other hand, may be advantageous. To become a CPA in some areas, such as California, students must pass an ethical exam. This exam takes 150 hours to prepare for and is given twice a year. You’ll also have to pass a thorough test on professional ethics and conduct. This is why obtaining a bachelor’s degree is necessary before applying for the exam.
CPA certification, unlike other degrees, does not require a graduate degree to work as a CPA. The CPA test necessitates the completion of 150 semester hours of undergraduate education. A bachelor’s degree typically requires 120 semester hours. To become a CPA, you must have graduate-level education.
In addition, the CPA test is available in a wide range of professions. A CPA must be licensed in at least one of these areas.
Is It Easy to Become a CPA?
It depends. You must have at least 120 semester hours of college education to become a CPA. A bachelor’s degree usually takes 126 semester hours to complete. A master’s degree, on the other hand, necessitates a minimum of 140 semester hours of study. To become a CPA, you must pass an exam administered by the American Institute of Certified Public Accountants (AICPA). A comprehensive test in accounting and company law is required to become a CPA.
You can sit for the CPA exam after getting your bachelor’s degree. The CPA exam is divided into four sections. Within the rolling 18-month term, you must pass all four components of the exam.
You may be required to take an ethics exam depending on your state. To work as a CPA, you’ll need to get your graduate license during this time.
The CPA exam is a four-part exam that takes four months to complete. In addition to passing the exam, you must also pass the examination. One of the most demanding professional tests in the country is the CPA exam. Half of all applicants must retake the exam, which means you’ll have to study for at least three years. Accounting, taxation, and law are the three areas of the exam.
While a bachelor’s degree is required for CPA licensing, you can also get your CPA certification without going to graduate school. The exam is challenging, and many applicants will have to retake it. If you are not planning on attending graduate school, you can complete the exam requirements by adding a year to your undergraduate studies. A double major is a popular choice since it allows you to enhance your knowledge without incurring the increased tuition costs associated with a degree.
What Are Some General Tips to Become a CPA?
A bachelor’s degree is a requirement. A bachelor’s degree and at least 150 credit hours of coursework are required for a CPA. Although it is advised, majoring in accounting or business is not required. If you want to major in something else, you’ll need to take a certain amount of accounting credits, as determined by your state’s accounting board.
Regulation (REG), financial accounting and reporting (FAR), auditing and attestation (AUD), and business environment and concepts (BEC) are the four components of the CPA exam (BEC). Each exam section has a four-hour time limit.
Each portion is divided into five subsections or testlets. Each testlet has 62-76 multiple-choice questions (MCQ) and 4-8 task-based simulations (TBS), which are case studies that evaluate real-world accounting skills. Three written communication assignments are included in the BEC section (WCT). Each test taker is required to prepare a professional document on a specific business scenario for these activities.
Take a look at graduate school. Adding a master’s degree to your resume could help you pass the CPA exam. According to the CPA Journal, first-time test takers with master’s degrees had a significantly greater pass percentage than those with only a bachelor’s degree. According to 2019 data, 58.3 percent of first-time test-takers with graduate degrees passed the exam. Meanwhile, just 48.8% of bachelor’s degree holders passed the exam.
Obtain a passing score on the CPA exam. Candidates must pass the American Institute of Certified Public Accountants’ CPA exam in order to work in the United States (AICPA). The test is divided into four sections. In most states, exam takers have 18 months to complete the remaining three sections after passing the first.
Obtain your driver’s license. The method for acquiring CPA licensing after passing the examination differs by state. Many countries require CPAs to have at least one year of professional experience after passing the test. Specific forms of experience, such as auditing, are also required by some state accounting boards.
CPAs must renew their license every 1-2 years in most states. Continuing education is frequently required as part of the renewal process. Continuing education programs in several jurisdictions are required to include a certain percentage of the professional ethics curriculum.
What Are the Required Credentials to Become a CPA?
CPAs have professional licenses, which increase their employability and stature. The certification could lead to a wider range of career prospects. It can also help you earn more money, increase your work stability, and gain access to higher-level positions.
For aspiring CPAs, the sections below discuss the licensure, credentialing, and continuing education processes. You must have a CPA license from your state licensing board in order to practice as a CPA. Licensure is not the same as CPA certification. Simply put, certification indicates you passed the CPA exam and are ready to move on to the next stage of the licensing procedure. State accounting boards give licenses, which must be maintained through extra actions and professional development hours.
Many CPAs pursue extra certifications in order to advance their careers. Professional organizations such as the Institute of Internal Auditors and the Institute of Management Accountants offer credentials to accountants.
These certifications require candidates to have at least six months of professional CPA experience, but the time commitment varies. The particular talents indicated by these credentials are highly valued by many employers.
To keep their license, most states require CPAs to take continuing education credits every year. Credit criteria, on the other hand, differ per state. Most CPAs put in at least 40 hours of continuing education each year. CPAs can continue their education in person or online through professional organizations and universities.
Candidates for the CPA exam do not need any prior work experience. Those who pass the test, however, must gain experience before being eligible for a full license. Specific experience requirements vary by state, as they do with other components of the licensing process.
The majority of U.S. jurisdictions, according to the AICPA, offer licensure paths to candidates with two years of relevant professional experience. Most states recognize general accounting experience gained in positions open to all accountants.
Internships in accounting that are completed while in school do not usually credit toward the experience-based CPA requirements. Nonetheless, these options provide significant opportunities for professional development and networking.
Should I become a CPA?
According to a 2017 NASBA article, earning a CPA license has numerous advantages, including:
- Improved prestige and access to more desirable job opportunities
- Promotion and responsibility ceilings are higher in higher-level jobs.
- Job security is higher, and job happiness is higher.
- Increased earning potential overall.
Those interested in learning how to become a CPA should be aware that the road is not easy. Each of the four sections of the CPA exam had a success rate of roughly 50% in the past.
For some accountants, the difficult journey is worth it because of the rewards. Others find that the required effort is incompatible with their long-term job objectives.
In any event, keep in mind that obtaining a CPA license opens up more job prospects. Some law enforcement authorities, for example, engage CPAs to investigate financial crimes. Licensure is typically pursued by aspiring accounting professionals who want to expand their choices. CPAs with a lot of experience have a lot of room for promotion. Financial controllers and chief financial officers are two high-level accounting positions (CFOs).
In private businesses, financial controllers are in charge of accounting departments. Comptrollers are the title given to them in charity and government organizations. These senior executives oversee accountants and collaborate with top executives to manage the organization’s finances. To complement their CPA backgrounds, several controllers pursue graduate degrees in finance or business administration.
CFOs frequently come from a management accounting background. Some, on the other hand, are former CPAs with postgraduate degrees and expertise in business administration or financial management. The financial activities of their company are overseen and directed by these C-suite executives.
Both positions have a high earning potential. As of October 2021, financial controllers earned an average of $85,740 per year, while CFOs made $137,290 per year, according to PayScale.
A four-year bachelor’s degree and 150 total credits are required for a CPA. You don’t need a degree in accounting, business, or finance to get started. Your degree, however, must include a certain amount of credits in accounting and business. CPA licensure normally takes at least 5-6 years to achieve due to the educational and experience requirements. Candidates with non-accounting backgrounds and those pursuing their degrees part-time will have to wait longer.
Is it possible to become a CPA if you major in finance or economics? Yes, but the amount of effort required will depend on how many accounting and business courses you’ve done and how eager you are to complete the remaining prerequisites.
For someone pursuing a finance degree, completing the required number of business credit hours is usually straightforward. If you also take any accounting classes, you’re already halfway to satisfying the CPA education requirement. You’ll probably need to concentrate on meeting the 150-credit-hour requirement, and the best place to do it is at your local university or other approved educational institutions.
Two main credentials are required for CPA licensing. To begin, you’ll need a four-year bachelor’s degree as well as additional credits. To meet the educational requirements, some individuals obtain graduate degrees or a certificate. Second, you must pass the CPA exam to become certified.