CPAs are strategic business advisors who consult individuals, businesses and other organizations to help them reach their financial goals. With a high standard of financial knowledge and expertise, CPAs can make an average salary of almost $120,000 a year.
Taking on the CPA exam is therefore a solid career move if you’re looking to establish yourself professionally within the accounting and financial world.
If this sounds like the career for you, then here is everything that you need to know about how to become a CPA.
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What is a CPA?
A ‘CPA’ is the title given to qualified accountants in the US who have passed the CPA exam and earned their CPA certification, therefore becoming a certified public accountant.
If you’re based in another English-speaking country outside of the US, you might have heard of a chartered accountant. Well, in the US, a CPA is the equivalent to a chartered accountant.
The professional CPA qualification enables accountants to be recognized as experts in their field and to perform certain tax and accounting duties which other accountants cannot.
CPAs generally utilize their expertise to help businesses and clients reach their financial aims by advising them on financial matters and creating financial reports. Unlike accountants without a CPA designation, CPAs can also represent clients in IRS (Internal Revenue Service) cases, and both perform and sign off audits.
Is it worth becoming a CPA?
Earning a CPA designation can open many doors as the qualification allows you to work in a variety of fields and specializations.
CPAs can expect to experience a lot of mobility in their careers: many accountants move into public or corporate accounting, government services, education, non-profit, or executive roles after earning CPA licenses. They tend to choose an area to specialize in, which can range anywhere from tax assurance to forensic services to financial planning.
The CPA designation is highly regarded, providing strong career opportunities. CPAs are well respected as experts in their field and can expect to be valued and recognized by many organizations. As a CPA you can earn an estimated 10-15% more than non-CPA licensed professionals working in accounting-related jobs. You can also expect a degree of job security.
“A CPA license is a valuable asset,” says Professor Lasse Niemi from Aalto University School of Business.
“Having a CPA license enables you to have your own business as an accounting professional. It is also a great way to start your career as the competencies you learn are very broad and can open many doors,” he adds.
CPA requirements: how to become a CPA?
To become a CPA in the US, you must first meet a set of specified CPA requirements which can vary from state to state. Before applying to sit your CPA exam, make sure to check your state's specific exam requirements.
Most states require you to hold a bachelor's degree in business administration, finance, or accounting. As well as a bachelor's degree, you'll also be required to have 150 additional semester hours before sitting the uniform CPA examination.
While an accounting degree is not required, many states will expect you to take a certain amount of accounting credits in order to qualify for the exam.
The uniform CPA exam has up to 300 multiple-choice questions, 28 task based simulations and three writing components. The test is divided into four main categories. These are auditing and attestation, financial accounting and reporting, regulation, and business environment and concepts. You will have four hours to complete each section on the exam.
It is important to remember that once you pass the first CPA exam section, you have 18-months to pass the remaining three sections. If you don't pass all four within this time period then you could lose your exam credit for the sections you've already passed and will have to reapply for the test.
READ: CPA Vs MBA: Why Not Both?
What happens after I pass my exam?
After completing your exam, you will still need to take extra measures before you can gain your full CPA license.
You'll need to take on one to two years of accounting work experience which must be verified by a licensed CPA before qualifying for your full license. Some state accounting boards will also specify what type of work experience they require.
After passing the CPA uniform exam, you will need to take the American Institute of CPAs (AICPA) ethics exam which includes 40 multiple-choice accounting related ethics questions.
Once you have obtained your full CPA license, you will be expected to take on professional education courses either online or in-person each year to retain your license. The number of credits depends on your state, but can be up to 40-hours a year.
It is worth checking your accounting board's requirements online.
How to become a CPA via business school
An accounting degree is not a necessity for becoming a qualified CPA. However, higher education can be a worthwhile step as an accounting degree will prep you with the knowledge needed to ace your CPA exam first-time.
Candidates with a master's degree in accounting who take the CPA exam are 10% more likely to pass first time than those taking the exam with just a bachelor’s degree. But there are other options beyond master's degrees as other business degrees in relevant fields can also help you prepare.
Brian Armstrong studied a master's degree in business taxation and data analytics at Villanova University, before later gaining his CPA license. But even after graduating from the program, fulfilling the necessary requirements was challenging.
"I went through every lesson in the book that my study provider assigned to me, I took some time to do my own review. I did practice tests. I made sure I was above the threshold where I needed to be, and then I worried about scheduling the exam,” he says.
Brian's experience is fairly typical of b-school students who become CPAs, showing the journey to becoming a CPA is not easy. But the skills and opportunities that you can gain through gaining a CPA designation could transform your career.
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