Secrets to Career Success
Stand out to recruiters and jumpstart your accounting career with this foolproof guide to success.
A Certified Public Accountant (CPA) is an accounting professional who has completed the necessary educational requirements, obtained experience, and passed the CPA Exam. The CPA license is issued by each state's Board of Accountancy. The American Institute of Certified Public Accountants (AICPA) provides guidance on how to obtain CPA licensure. The CPA designation aims to guarantee that professional accounting rules are implemented. Other countries, such as the United Kingdom, have qualifications that are equivalent to the CPA designation, such as Chartered Accountant (CA).
What Does a CPA Do?
You might be interested in what a Certified Public Accountant (CPA) does. The CPA is a professional certification, not a career path or job title, that can provide accounting professionals with greater career freedom and mobility. CPAs normally have only one state license, although reciprocity regulations allow them to obtain licenses in other jurisdictions.
CPAs are highly sought after in the business world due to their dependability, industry knowledge, and certifications. The AICPA lists a few common industries in which CPAs work:
- Public Accounting
- Corporate Accounting
This isn't a complete list. CPAs are not restricted to a single industry or even a single job function. Obtaining a CPA designation can lead to opportunities in practically any industry. As a result of the knowledge gained in exam preparation and continuing professional education (CPE) requirements, CPAs are able to conduct other services in addition to preserving and interpreting financial records.
You can choose to work in a big firm, a small firm, industry, government, or elsewhere, and you can also specialize within a practice. These include:
- Personal Financial Planning
- Information Management and Technology Assurance
- Assurance Services
- Environmental Accounting
- International Accounting
It takes time, effort, and planning to become a Certified Public Accountant. Additionally, being a CPA necessitates dedication to lifelong learning.
History of the CPA Profession
The American Association of Public Accountants (AAPA) was formed in 1887 by 31 accountants to enforce moral standards for the accounting industry as well as U.S. auditing requirements for local, state, and federal government entities. federal governments, private companies, and charities. CPAs became licensed for the first time in 1896. The American Institute of Certified Public Accountants (AICPA) has been the organization's name since 1957, after being renamed multiple times throughout the years.
In 1934, all publicly traded corporations were obliged to produce periodic financial reports certified by members of the accounting industry as required by the Securities and Exchange Commission (SEC). Until 1973, when the Financial Accounting Rules Board (FASB) was founded to set standards for private corporations, the AICPA developed accounting standards.
Large accounting companies expanded their services to incorporate various forms of consulting in the late 1990s, resulting in a boom in the accounting business. The Enron affair in 2001 resulted in significant changes in the accounting sector, including the closure of Arthur Andersen, one of the country's largest accounting firms. Accountants were subjected to stricter limits on their consulting jobs under the Sarbanes-Oxley Act, which was passed in 2002.
Public Accounting – What Can a CPA Do That Other Accountants Cannot?
CPAs are all accountants, but not all accountants are CPAs. Almost all states require that a person meet education, experience, and ethical requirements, as well as pass the Uniform CPA Examination in order to become a CPA. Individuals are then granted licenses to practice accounting by state boards of accountancy.
To become a CPA, one must have met the state's license criteria for practicing accounting. State licensure standards vary, but most require 150 semester hours (30 hours more than a regular 120-hour accounting bachelor's degree). CPA license criteria in each state mandate some documented experience and a passing score on the Uniform CPA Examination.
Only CPAs are qualified to prepare audited financial statements such as a balance sheet or an income statement, which is a significant distinction between an ordinary accountant and a CPA. A CPA's sole function is to provide an opinion on financial statements that have been audited, inspected, or prepared. CPA license is necessary to provide attestation services. Accountants perform regular tasks and can prepare tax returns, whereas CPAs analyze the work, represent their clients in a tax audit, and assist in making higher-level business and tax decisions.
Are There Different Types of Certified Public Accountants?
CPAs can obtain specialization in different industries and services. Hence, one can safely say that there are several types of CPAs in the profession. According to the AICPA, certain fields have been recognized for CPA specialization. Here is the list:
- Personal financial planning
- Forensic accounting
- Information management and technology assurance
- Audit and other attestation services
- Environmental accounting
- International accounting
CPA Specialty Fields
There are several additional areas of practice in which CPAs can specialize. This includes:
- Treasury and Cash Management
- Forensic Accounting Services
- International Accounting
- Environmental Accounting
CPA Firms – What Does A CPA Do When Working for an Accounting Firm?
CPAs help individuals establish a personal financial plan by examining financial statements, planning taxes, and assessing financial transactions for decision-making. Following are some of the critical functions of CPAs in various firms:
Assurance and Auditing
CPAs working in the auditing and assurance department of a firm conduct audits and assurance engagements, as well as deliver opinions accordingly.
Preparation and Tax Services
In the tax preparation and services division of a firm, CPAs conduct tax review and planning and are also in charge of generating necessary tax filings.
Services for Consultation
Consulting services include everything from assisting customers in creating and implementing new financial systems to helping clients understand financial reporting and recommending accounting best practices. Forensic accounting, financial and estate planning, and litigation assistance are some of the consulting specialties.
What Types of Skills Will You Need to Become a CPA?
Obtaining the CPA designation is a key milestone in your career progression as it can lead to a wide range of interesting and challenging roles and leadership opportunities. CPAs work in a wide range of roles in the corporate world today, such as internal auditors, IT managers, forensic experts, tax accountants, compliance officers, and CEOs.
CPAs are accountants who have met the state board of accountancy's strict requirements for education, testing, and experience on the job. Employers frequently look for candidates with a varied range of abilities and attributes when recruiting CPAs, especially for management roles. In today's CPAs, many employers look for the following seven skills:
- Analytical research skills
- Interpersonal skills
- Tech savviness
- High ethical standards
- Marketing/client focus
- Project management
- A broad business perspective
How Do I Become a CPA?
To become a CPA, one must satisfy the requirements established by your state's board of accountancy. While these requirements are similar in each state, there are some exceptions.
1. Understanding the requirements
Technically, the requirements for becoming a CPA vary per state, although most of them follow very similar and uniform guidelines. The general CPA qualifications are as follows:
- A bachelor's degree
- A total of 24-semester units in accounting
- A total of 24-semester units in business
- 150-semester units of education
- Pass the four-part CPA Exam.
- Obtain a passing score on the AICPA ethics exam.
- A year of accounting or accounting-related experience confirmed by a licensed CPA
2. Studying for the CPA Exam
Planning, discipline, and commitment are necessary for CPA Exam success. To achieve this, it is highly recommended that candidates use a top CPA Exam review course with proven results. A reputable course will provide candidates with a comprehensive study plan that may be adapted to individual needs and access to high-quality study resources that can prepare candidates for the AICPA test blueprints.
According to the AICPA, successful candidates spend 300–400 hours preparing for the four-part CPA Exam, which can be condensed to just a few months (we recommend at least 3 months) or spread out over several months.
3. Submitting an Application/Taking the CPA Exam
The application process for the CPA Exam is extensive and cumbersome. The first step is to have the state board of accountancy confirm that all educational requirements have been satisfied, and then submit a formal application once accepted.
The National Association of State Boards of Accountancy (NASBA) will issue a Notice To Schedule (NTS) when the board approves an application. Once approved, candidates can arrange to sit for their first exam section.
Note: Candidates are issued only one NTS per individual exam section, and each NTS has a set validity–6 months in most states. If an NTS expires, candidates will need to reapply and repay associated fees.
4. Passing the Ethics Exam
In addition to passing each component of the CPA Exam, a candidate may be required to pass the AICPA ethics exam. This is a fast-paced self-study course that concludes with a quiz. While not required in every state, it is a prerequisite in most states.
What Are the Benefits of Becoming a Certified Public Accountant?
One of the most important advantages of being a CPA is that it earns you respect from coworkers and clients. CPAs are seen as an elite group professionally, with more weight, trust, and respect than non-certified accountants.
In public accounting, obtaining CPA licensure is especially important to advancing your career. If you want to advance to management or become a partner, the CPA designation will prove extremely beneficial.
Technology, artificial intelligence, cybersecurity, healthcare, energy, sports and entertainment, government, and other fields offer immense potential for CPAs. CPAs are needed in every business!
While accountants are ubiquitous and in high demand, trained CPAs may be rare (especially in industries where higher specialization is required). This increases job stability and negotiating power during a job search.
Job satisfaction is a huge career plus for CPAs. They can choose from a range of career choices and have a beneficial impact on the lives of people, businesses, and non-profit efforts.
Increased Salary and Benefits
While entry-level CPAs do not earn significantly more than conventional accountants (on average), an experienced CPA can earn significantly more than a regular accountant. Junior-level CPAs with one to three years of experience can expect to make between $52,000 and $87,000 per year. Average wages range from $66,000 to $110,000 after four to six years of expertise. A CPA's salary might rise to $150,000 or more as their career progresses.
Becoming a CPA in the USA and Other Countries
The CPA is a license to perform public accounting services in the United States. Each of the 50 states grants the CPA license to practice in that state. It is often equivalent to the title of Chartered Accountant (CA) in other countries, such as Australia, Canada, Hong Kong, New Zealand, and so on.
CPA in the USA
To become a CPA in the USA, candidates must generally have a bachelor's degree or equivalent. CPA requirements also include 150 credit hours of university coursework and approximately 2,000 hours of job experience in accounting. Furthermore, most states require candidates to pass the Ethics Exam. This criteria varies from state to state, so it is important to check specific CPA requirements by state.
CPA in Australia
To become a CPA in Australia, candidates must hold an accounting degree that has been approved by CPA Australia and The Chartered Professional Accountants of British Columbia (CPABC), have completed the CPA program, and have relevant practical experience. Many CPA applicants take the traditional route of earning a degree in accounting or management. Candidates with a variety of educational backgrounds may also apply for the CPA Program, but they may be required to first complete the Foundation Program.
CPA in Canada
Even if you don't have a bachelor's degree, you can sit for the CPA tests in Canada. You must, however, show that you have at least eight years of experience in CPA technical competency areas.
CPA stands for Certified Public Accountant, and it is an accounting credential that confers expertise in the fields of accounting and auditing. CPAs hold accounting licensing requirements for the state in which they practice. These requirements vary by state, but typically include 150 semester hours (30 semester hours more than the standard 120-hour bachelor’s degree in accounting). A Master of Business Administration, or MBA, is a degree that everyone agrees gives you the skills you need for a career in business or management. Most MBA programs include a “core” curriculum of subjects like accounting, economics, marketing, and operations, as well as electives.
UWorld Roger CPA Review provides CPA candidates with guidance and resources to help candidates get a deeper understanding of the CPA career path, expected salaries, and ways to improve their employment prospects. Additionally, it will assist you in deciding which career option among CPA, CFA, CMA, and Accountant is right for you.