If you are a current university student or someone who has been out of school for a while and you’re thinking about a career as a Certified Professional Accountant (CPA), you’ll want to find out what steps you need to take to become licensed. There are several requirements to become a CPA which include educational requirements, passing the CPA Exam, gaining experience under a licensed CPA, and in some states, passing the ethics exam. While it might seem like a lot of requirements to become a CPA, the time and effort are worth it. CPAs make 10-15% more than non-CPAs and over three million dollars in lifetime earnings over non-CPAs.
Fulfill Educational Requirements
All of those wishing to become a CPA must check with their State Board of Accountancy to find out how many credit hours are needed for their particular state to apply towards their CPA license. The 150-hour rule is a generally accepted rule by most jurisdictions that requires CPA candidates to complete 150 educational credit hours before moving to the next requirement of passing the CPA Exam. They also have minimum academic credit requirements where you must take a certain number of accounting courses to fulfill the educational requirement. Thankfully, some states allow candidates to register for the CPA Exam with only 120 credit hours of educational credit. You can find more information about the 150-hour rule on our CPA Requirements page.
Some CPA candidates who need extra accounting credits decide to get a master’s degree in accounting (MAcc). Whatever you choose, you’ll need to take some accounting and business courses to make up for the educational requirements and find out how many accounting credits your state requires. It is important to note that even if a state has easier educational requirements, it doesn’t mean that all its requirements are easy to obtain. Some states with lower educational requirements have higher experience requirements, so it all balances out.
Pass the CPA Exam
Once you have the educational requirements completed, you’ll need to study for, register, and take the CPA Exam. The CPA Exam is a four-part exam that covers Auditing & Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). The exam takes approximately sixteen hours to complete and you must pass each section of the exam with a score of 75 or higher. You have 18 months to complete the full exam and your time starts as soon as you pass the first exam. If you’re looking for specific steps to follow to apply for the CPA Exam, check out our CPA Requirements page.
When you decide to move forward with the CPA Exam, be sure to consider partnering with a CPA prep course. Studying for and successfully passing the CPA Exam is one of the most difficult endeavors you will undertake along your CPA journey, so set yourself up for success by studying with a CPA Review course. If you’re not sure which CPA Review course to take, find out how to choose a CPA Review course.
Meet Experience Requirements
As with educational requirements to become a CPA, experience requirements can vary by jurisdiction. However, most states typically require around two years of experience working in accounting under a licensed CPA. The good news is that all of your work experience does not need to be completed within the same company or organization. Most jurisdictions require that all work experience must have a proper sign-off, but this could be from multiple companies in different cities.
Pass the Ethics Exam (not required in all states or jurisdictions)
After taking the CPA Exam, some candidates in certain jurisdictions will have to take the ethics exam. The ethics exam is an exam that covers the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct and Accounting Rules. It examines how well a future CPA would handle professional ethics questions they may encounter during their time working in the accounting profession. The exam is a reminder to CPAs about the conduct expected and required of them when working with and in professional organizations.
The ethics exam is a multiple-choice test and it is administered as an open-book test. You need to pass with a 90 or better, but you have three attempts to pass the exam. Thankfully, the AICPA provides course materials to prepare you for the exam if your jurisdiction requires it. Topics on the exam cover legal and regulatory issues, the importance of maintaining independence from client/employer, and the code of conduct of the AICPA. Keep in mind that some states do not accept the AICPA’s Ethics Exam to meet these requirements, so be sure to check with your State Board of Accountancy for more information.
If you want to become a CPA and you don’t have an accounting degree, you can still work towards your licensure. If you have a degree in finance, you’ll have an even easier time transitioning over to accounting to work towards your CPA. Either way, the benefits of obtaining a CPA certification are numerous and outweigh any roadblocks you might encounter during your CPA journey.