A certified public accountant (CPA) is an accountant qualified to perform specific tasks, such as drafting audited financial statements. While not required to practice as an accountant, CPA licensure leads to positive career outcomes. According to the National Association of State Boards of Accountancy, becoming a CPA is an excellent way to develop your career, increase job satisfaction, and boost your earnings.
Aspiring CPAs must meet the minimum requirements set by their state of residency and the American Institute of Certified Public Accountants (AICPA). These requirements include completing a minimum number of college credits and passing the Uniform Certified Public Accountant Examination. While not required, many CPAs complete at least a master's degree.
Becoming a CPA is a pragmatic decision for accountants. According to the Bureau of Labor Statistics (BLS), becoming a CPA can improve job prospects. The BLS also reported that accountants and auditors earn a median salary of $71,550, and the number of accounting positions is projected to grow by 6% from 2018-2028. This same data indicates that accountants who become CPAs typically receive the best job prospects and potential wages.
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Steps to Becoming a CPA
CPA licensure requires passing the CPA exam and completing a minimum amount of accounting education. The entire process takes as little as five years to complete, though current college students and recent graduates may take even less time.
The first step would-be CPAs must complete is a bachelor's degree. While CPA licensure does not require a specific major, aspiring accountants should major in accounting, finance, or a related business field. Most bachelor's degrees take four years to complete and require 120-128 credits.
However, AICPA guidelines require applicants to complete 150 total credits, and most states follow this requirement. So, future CPAs typically choose from two options after completing a bachelor's degree: completing a post-baccalaureate CPA preparation program or earning a master's in accounting.
Both a post-baccalaureate program and master's degree satisfy the credit requirement, though the master's degree is more difficult, longer, and potentially more costly. However, a master's degree can increase your employability and potential salary. Each option may also impact how well you perform on the CPA exam. Additionally, a master's in accounting often lets you specialize your education. While a specialization doesn't help with the CPA exam or licensure, it could help you secure your ideal job.
Specific requirements vary by state, and some states require professional accounting experience before you can sit for the CPA exam. Most states require at least two years of public accounting experience, though some states also accept other types of accounting experience. Depending on where you live, students can earn professional experience either before or after the examination. Those who earn experience after passing the exam typically don't receive CPA licensure until completion of that work experience.
If you ever feel lost and are unsure how to approach CPA licensure in your state, consider enrolling in an accredited accounting program in your state. Accounting programs that prepare students for CPA licensure typically meet the minimum state requirements for wherever the college or university resides.
How to Choose the Right Accounting Path For You
To take the CPA exam, students must first earn 150 college credits. However, aspiring CPA accountants may choose from various programs to earn these credits.
Future CPAs must choose between a post-baccalaureate program or a master's degree. Both options should satisfy state requirements for becoming a CPA, though the two lead to different outcomes. Depending on career goals and financial circumstances, either option should prove advantageous.
Learners should also consider online education. While on-campus programs provide a more traditional route to an accounting degree, online education offers several unique benefits. For instance, an online degree allows students to study from a distance, removing any commuting costs or commitments. Many online accounting programs use asynchronous courses, meaning students can access online coursework and lectures at any time. This provides increased flexibility and is ideal for busy learners who have family or career commitments.
Online education can also be much more affordable than its on-campus counterpart. Some online programs charge a flat per-credit tuition rate, and many extend in-state tuition rates to all online students regardless of where they live. Both of these benefits can make education less expensive. Also, studying online cuts any commuting costs or on-campus housing expenses.
A common concern is that online courses do not provide the same quality of education as in-person courses. As long as the accounting program is accredited, the quality of the online program should equal the on-campus counterpart.
Of course, many students still prefer in-person courses to online learning. Future learners who want to study on campus should consider factors such as tuition costs, living expenses, distance from home, professors, and expected program outcomes.
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Taking the CPA Exam
To become a licensed CPA, accountants must pass the Uniform CPA Examination. This exam consists of four sections: auditing and attestation; business environment and concepts; financial accounting and reporting; and regulation. Each section takes four hours to complete, and test-takers must pass all four sections within an 18-month period. Passing the exam requires a score of 75 or higher in each of the four parts.
The CPA exam uses three types of questions: multiple-choice, task-based simulations, and written communication tasks. Also, each section is further broken down into five testlets, all of which test-takers must complete in four hours.
Each section begins with a five minute welcome, then leads into the first testlet. All four sections use multiple-choice questions for the first and second testlet. The third testlet uses two task-based simulation questions. Once test-takers complete the third testlet, they may take a 15 minute timed break. During the fourth testlet, all four sections require several more task-based simulation questions. The final testlest uses task-based simulation questions for all sections except for business environment and concepts. During the final business environment and concepts testlet, test-takers complete three written communication tasks.
The AICPA offers the CPA exam during four test windows: January 1st-March 10th, April 1st-June 10th, July 1st-September 10th, and October 1st-December 10th. Test-takers must prepare for specific parts of the exam during these testing windows, ensuring they pass all four sections within the 18-month timeframe.
The AICPA answers common questions for test-taking days and offers sample tests online to help students prepare. Test-takers may complete the exam's sections in any order they choose.
Aspiring CPAs likely have more questions about the CPA exam, the test-taking process, what to expect on the exam, and the benefits of passing the exam. Others may be curious about what degree to earn or what career to pursue. Below are answers to some common questions regarding CPA degrees.
- What degree does a CPA need?
The degree a CPA needs depends on the state where the CPA practices. The AICPA technically does not require any specific degree or major aside from a bachelor's degree and 150 college credits. However, anyone who plans on taking the CPA exam should pursue a bachelor's degree in accounting or a related field, then either a CPA preparation program or a master's in accounting.
- What does a CPA do?
A CPA is a certified public accountant, meaning they perform accounting tasks. However, these tasks can vary significantly. Some CPAs find positions in accounting firms, work for the state or federal government, or start their own practice. Others choose not to work in accounting at all, instead using their education to pursue managerial or leadership positions. Becoming a CPA does not lead to any single job, but it does open the doors to many potential careers.
- Can I become a CPA without an accounting degree?
Whether you can become a CPA without an accounting degree depends on where you live, though the process can be very difficult. States typically require two years of accounting experience and 150 college credits to become CPA eligible. Also, the CPA exam covers complex accounting topics and requires plenty of studying. Even if becoming a CPA without an accounting degree is feasible in your state, doing so is not advisable.