If you’re an accountant or an accounting student, then you could really benefit from becoming a Certified Public Accountant (CPA). The advantages of becoming a CPA are numerous, so you should consider the certification process as soon as possible. To earn the CPA license, you must learn all about the CPA career paths, requirements, exam, and more. And thankfully, you can find all the information you need to know about the CPA right here.
A CPA is a Certified Public Accountant. But what is a Certified Public Accountant?
A Certified Public Accountant (CPA) is an accounting professional who has earned the CPA license from a state board of accountancy. In the United States, the accountancy jurisdictions hold the power to grant the CPA license, not the federal government. Additionally, the state boards award the CPA certification to individuals who have met a series of specific requirements, such as the education, experience, and examination requirements.
The CPA designates an accountant as an expert in a range of accounting areas such as internal auditing, financial statements, income tax, financial planning, tax preparation, and more. Consequently, the CPA license symbolizes that an accountant has mastered the most important elements of the accounting profession. Therefore, a licensed Certified Public Accountant can play a key role as a trusted financial advisor to businesses. Because a licensed CPA knows the ins and outs of the accounting profession, they are a valuable asset to many professional organizations.
A CPA can hold many kinds of positions in the financial industry. As these professionals maintain high standards of accounting knowledge and ethics, they are able to work as business advisors, tax accountants, auditors, accounting consultants, decision makers, and more.
So, some of the industries in which CPAs can work include:
CPAs are also able to operate in company management and hold executive positions such as:
Earning this certification comes with a number of CPA career benefits. Some of these benefits include:
CPAs have a higher earning potential than regular accountants do. With the license, your CPA salary will be about 10-15% more than that of an unlicensed accountant. You’ll also find that many companies offer bonuses for earning the CPA.
As the list of potential CPA positions shows, this certification brings a lot of job opportunities along. So, you’ll never have to get bored in your career. CPAs can find employment at private companies, non-profits, international firms, government agencies, educational institutions, and more. In addition, CPAs can also take on niche roles that allow for even greater job flexibility.
The Bureau of Labor Statistics expects the demand for Certified Public Accountants to increase over the next few years, meaning licensed CPAs will have plenty of job opportunities for a while. Furthermore, a CPA’s skills are always in demand, so employers will always value you. You could also consider working for yourself, which will provide you with both job security and flexibility.
The intense certification process that CPA candidates must undergo forces them to demonstrate a great deal of skill, knowledge, and ability. They must earn many credits of higher education, acquire years of professional experience, pass a rigorous exam, and once certified, participate in continuing education in order to maintain their license. Thankfully, this process not only strengthens your accounting knowledge but also increases your value and employability.
Since the CPA designates the highest caliber of an accountant, this certification comes with a lot of respect. So, you can expect many of your coworkers, clients, employers, and more to hold you in high esteem. Furthermore, completing the rigorous CPA licensure process proves your dedication to the career, and that dedication paves the way to better job opportunities.
In order to become a CPA, you must meet the state board’s CPA requirements. The requirements for candidates who wish to obtain a CPA license vary slightly by state.
However, almost every state board enforces some form of the following requirements, which are known as the 3 Es:
Typically, the state boards also have a CPA ethics requirement. Meeting this requirement involves passing the state’s ethics exam.
The 4 Es apply to the pursuit of the CPA license, but taking the CPA Exam also necessitates fulfilling a few specific requirements. While once again, these requirements change from state to state, one of the most common CPA Exam requirements is 120 credit hours (a bachelor’s degree) of education. So, in some cases, candidates can take the exam while they’re still in college, depending on the number of college credits they have earned.
Honestly, becoming a CPA can take several years. The process can last a while because some of the requirements can take years to complete.
Completing one requirement at a time stretches the CPA licensure process out for the longest period of 6-9 years. To do so, you would earn the 150 credit hours, then take the CPA Exam, and then acquire 1-2 years of accounting experience. But, you can become a CPA faster by tackling several of the requirements at the same time.
To speed the process up, you could pass the CPA Exam immediately after graduating from college. Knocking these 2 requirements out would take about 5 years, and then getting your 1-2 years of accounting experience would take your total to 6-7 years. Another way to cut your licensure timeline down is to sit for the CPA Exam while you’re working full-time. Doing this also allows you to complete the process in 6-7 years.
CPA candidates must pass the entire exam within 18 months, but passing the exam in as few as 3-6 months is possible. However, failing a section of the CPA Exam could push your schedule back by a month or even more, depending on what you sat for the exam section.
Therefore, the fastest you could earn the CPA is about 6 years, including the time it takes to earn 150 credit hours.
Those interested in earning the CPA certification must follow these steps:
The CPA Exam, officially known as the Uniform CPA Examination, is an exam that all CPA candidates must pass to become certified. The American Institute of Certified Public Accountants (AICPA) creates the exam. And, although the state boards make their own versions of the CPA requirements, all of them use the AICPA’s exam for the examination requirement.
The CPA Exam consists of 4 sections that cover an array of accounting topics. And, several types of exam questions test candidates’ knowledge of these topics. The CPA Exam question types are multiple-choice questions, written communications, and task-based simulations.
Every section of the CPA Exam contains a series of smaller sections known as testlets. Specifically, each section of the exam has 5 total testlets.
The CPA Exam has 4 sections:
You’ll find the following amounts and types of questions on these 4 exam sections:
The CPA Exam covers a wide range of accounting topics related to business, auditing, financial reporting, regulation, and attestation.
The CPA Exam Blueprints outline the topics that each exam section covers. The exam sections feature the following coverage percentages and content areas:
You will have 4 hours of total testing time to finish each of the CPA Exam sections. Therefore, the exam lasts for a combined total of 16 hours.
As mentioned, you must pass all 4 sections of the CPA Exam in 18 months. Your 18-month period starts once you pass one section of the CPA Exam. If you don’t pass the remaining 3 exam sections during the 18-month period, you will lose credit for the section you passed first.
If you fail more than one CPA Exam section, the 18-month window will continue to move back to the earliest section pass date. You will also lose credit for the earliest passed section each time your 18-month window moves back.
What makes passing the CPA Exam during the 18-month window tricky is the exam availability. Candidates can only test during the 4 CPA Exam testing windows.
The testing windows are:
While you can sit for as many exam sections as you want during the testing window, you cannot sit for the same section twice during that testing window. Meaning, if you fail a section of the exam, you can’t retake it until the next testing window.
Several factors indicate that the CPA Exam is very challenging.
The first of these factors is the CPA Exam pass rate. Currently, the CPA Exam pass rate hovers right above 50%, with the pass rates for each section of the exam ranging between 40-60%. While the pass rates of some of the exam sections have been rising recently, there’s still about a 50% chance that you will either pass or fail the exam. So, you definitely don’t want to take this exam lightly!
The amount of knowledge the exam requires of CPA candidates further demonstrates how difficult it is. The exam expects deep levels of knowledge and skill to ensure that candidates have the abilities necessary to fulfill the duties of a Certified Public Accountant.
The AICPA has identified 600 representative tasks that they consider critical for a newly-licensed CPA to have in order to protect the public interest. The AICPA has assigned one of 4 skills levels to each of these tasks to help candidates see how much they must know.
|Evaluation||The examination or assessment of problems, and the use of judgment to draw conclusions.|
|Analysis||The examination and study of the interrelationships of separate areas in order to identify causes and find evidence to support inferences.|
|Application||The use or demonstration of knowledge, concepts, or techniques.|
|Remembering and Understanding||The perception and comprehension of the significance of an area utilizing knowledge gained.|
Each of the four CPA Exam sections evaluates candidates for these levels of skills to varying degrees.
|Remembering & Understanding||Application||Analysis||
*includes written communication
Since the CPA Exam sets a high standard for candidates and has only moderate pass rates, it’s clearly a difficult exam. That being said, the exam is still passable.
CPA Exam scores range from 0 to 99. In order to pass the exam, you must score at least 75.
The basis of your score is not the number of questions you’ve answered correctly. So, 75 is not 75%. Instead, the CPA Exam score is a scaled score that the AICPA determines based on your scaled score for the multiple-choice questions, task-based simulations, and written communications. The AICPA weights these your scores for each question type and combines them.
For AUD, FAR, and REG, the multiple-choice questions and task-based simulations each have a total scoring weight of 50%. For BEC, the multiple-choice questions are worth 50%, the task-based simulations are worth 35%, and the written communications are worth 15%.
You won’t get your score immediately after sitting for the CPA Exam. Instead, you’ll receive your score on one of the predetermined target CPA Exam score release dates.
The score release dates vary every year, but each quarter typically has 5 score release dates. The AICPA generally schedules the first score release date for a testing window during the first week of the second month of the quarter. The next score release dates tend to occur every 2 weeks after the first score release date.
In some instances, such as when the CPA Exam has changed significantly, the AICPA will hold the scores for standard-setting. In these scenarios, each quarter has fewer score release dates.
What you need to do after passing the CPA Exam depends on the order in which you’ve completed the CPA requirements. For example, you might need to finish satisfying the education or professional experience requirements after you’ve passed the CPA Exam.
But once you have met all of the CPA requirements, you’ll need to apply to your state board for the license. After you have received your license, you will then need to meet your state’s CPE requirements in order to maintain your license. Keeping your license up to date ensures that you reap the benefits of the CPA for years to come!
Each state may have different CPA requirements, but you’ll need to choose just one when planning to sit for the CPA Exam. So, which board of accountancy should you choose? Here are the most popular states, in alphabetic order:
When you’re ready to pass the CPA Exam in your pursuit the CPA certification, you’ll need to purchase a CPA review course. To do so, you should learn about the best CPA review courses on the market. Then, you can save big on your course using CPA review discounts.
The three most popular CPA review courses are:
But before you go through all that, you can get more help with the CPA process in this free CPA course. This course tells you how to earn the CPA license and how to pass each exam section on your first attempt. So, sign up today so you can start the process of becoming a CPA!