How to Become a CPA in Texas

Becoming a CPA in Texas will well acquaint you with the fact that the Lone Star State’s economy is almost as big as its reputation. Manufacturing in Texas has given it a well-earned gross state product of $1.706 trillion, with the major industries including petroleum and natural gas, farming, steel, banking, and tourism. In a rare tax move, Texas is one of only a few states that does not require its residents to pay personal income tax. Texas also does not allow income tax to be collected at any lower level of government. The U.S. Government is the only income tax entity that collects Texans pay. Businesses still pay gross margins taxes, except for sole proprietorships and partnerships, and because of the abnormally large amount of money Texas businesses export, the state is able to make up for the lack of nickels and dimes from its citizenry.

With such a strong economy, becoming a CPA in Texas is a no-brainer. The state reports consistently low unemployment due to the abundance of unskilled and low-skilled labor positions available, as well as due to the sheer number of growing businesses and educational resources accessible to residents.

TX QUICK FACTS


*Source: BLS Data

Accounting Programs in Texas

Certified Public Accounting, is just like so many professional fields, in that The Texas State Board of Public Accountancy requires those who practice, to complete a state-specific type and amount of financial, tax, and legal education before they are entitled to practice. CPAs, for the most part, perform the same duties in every part of the country. The reason licensing is state specific is to ensure that CPAs are equipped to handle not only the federal tax, business, and financial laws and regulations, but also the varied and complicated state tax laws and guidelines. These may be similar but are not always transferable across state borders. Almost every state makes it an option for CPAs to practice outside of their home licensing state. Some states put restrictions on this practice, and de-incentivize working out of state by capping the number of hours or the amount of money a CPA can make elsewhere, while others require simply that the CPA not own property in the state they are practicing if it is not their licensing state.

The national requirements to become a CPA include a minimum standard of 150-semester units of post-secondary education, one year of accounting related work experience, and passing the Uniform Certified Public Accountant Examination. Once you are licensed as a CPA in any state, interstate CPA licensing requirements begin to apply, regardless of the type of client services you perform, and regardless of how well you know about the laws in the next state over. Educational programs in accounting include sections on inter-state laws regarding accounting practice.

ACCOUNTING DEGREES IN TEXAS

Source: AACSB Website

To become a Certified Public Accountant (CPA) in Texas, specific eligibility requirements must be met beyond those of the national minimums. The Texas State Board of Public Accountancy has a website describing these requirements, with links to the relevant statutes, contacts, and in many cases, downloadable and electronic submittable forms for CPA applicants. The person applying must have a bachelor’s degree in Accounting with 150 educational hours from an accredited post-secondary school (with a few exceptions). Unique to Texas, courses that are required to be eligible for a license include up to nine semester credit hours of intermediate accounting, advanced accounting, accounting theory, managerial or cost accounting, auditing and attestation services, internal accounting control and risk assessment, financial statement analysis, accounting research and analysis, up to 12 semester credit hours of taxation, financial accounting and reporting for governmental and/or other nonprofit entities, up to 12 semester credit hours of accounting information systems, including management information systems (“MIS”), provided the MIS courses are listed or cross-listed as accounting courses, and the institution of higher education accepts these courses as satisfying the accounting course requirements for graduation with a degree in accounting, fraud examination, and international accounting and financial reporting

Any non-traditionally-delivered course, like online accounting degree programs, must have been reviewed and approved by the Texas State Board prior to graduates applying for their CPA license.

In Texas, Applicants must complete work experience under the supervision of a licensed CPA. The duties performed in this capacity must be what Texas calls “non-routine” accounting, meaning duties that continually require independent thought and judgment on important accounting matters. Acceptable work experience includes internal auditor, staff, fund or tax accountant, accounting, financial or accounting systems analyst, controller.

CPA LICENSURE IN TEXAS, STEPS TOWARD ELIGIBILITY

To be eligible for CPA licensure in Texas, candidates must meet these following qualifications:

Anyone who wishes to become a CPA in the United States, must sit for and pass the Uniform Certified Public Accountant Examination (Uniform CPA Exam). The American Institute of Certified Public Accountants (AICPA) is the body that creates and regulates the exam, and National Association of State Boards of Accountancy (NASBA) administers it in each state. The Uniform CPA Exam is the same, or uniform, in every state, however, the requirements for being eligible to sit for the exam, and subsequently passing, determines if you can be licensed in your state.

In addition to these three minimum national standards, CPAs in Texas (and everywhere) must complete Continuing Professional Education (CPE) to maintain their CPA licensure. This can be accomplished through educational conferences held by the AICPA, or through specific coursework offered in-person or online through the AICPA website. Texas, CPAs must complete 20 hours annually, of continued professional education or CPE. Four of these 20 must specifically be in the area of a board-approved CPE Ethics in Accounting course. Licensees reporting CPE must document their participation and retain evidence of that documentation for the five most recent reporting periods. Authors and reviewers of published articles and books can claim CPE credits, as long as the effort in writing/publishing them increases the professional competence of the author or reviewer. Up to 10 CPE credits in any one-year reporting period are eligible to be claimed for preparation or review of such publications.

For instance, if you are an accounting professor, you can apply the hours you spend teaching towards CPE, or if you edit and publish educational material on accounting, you can apply the hours it took to plan and publish this as well. If you become a CPA in Texas and begin practicing, but neglect your CPE requirements in the first or any subsequent year, your CPA license will be placed on inactive status and will be inactive for three years. CPAs with an inactive license may reinstate to active status after the amount of time judged to be appropriate by The Texas CPA Board. Licensees will be subject to pay the current certificate application fee, submit three certificates of good moral character and endorsements of eligibility, and furnishing the Board with documentation of the completion of the necessary hours of CPE, including the required course on the Texas accountancy statutes and rules. Licensees may claim CPE credit for courses that are not registered by The Texas State Board of Public Accountancy, but not more than 50 percent of the total CPE in any three-year reporting period.

BEST CITIES IN TEXAS FOR ACCOUNTANTS (SALARY)

Source: BLS Data

As recently as 2007, federal regulations passed that ensure if, for example, a CPA had been working with a client for years, and that client moved to the next state over or took a job just over the border, or (a newer scenario) the client is telecommuting to a state neither of them lives in, that CPA could continue working with that client, even though the clients finances are now the concern of a state the CPA is not licensed in. The regulating bodies who govern accounting, and who passed this new regulation are the AICPA and NASBA.

The regulation itself is referred to as Uniform Accountancy Act (UAA) and the section dealing with mobility across state lines is section 23, or “no notice, no fee, no escape”. Section 23 is often compared to the driver’s license model. Any driver who is licensed in a U.S. state can, without penalty, drive across the country without applying for new driver’s licenses in each state she visits. If she were to disobey the traffic laws of the state she is visiting outside her licensing state, she can be disciplined by the state where the infraction occurred. The same applies to the UAA, and specifically section 23. The UUA in its entirety was developed and is maintained, reviewed and updated by the AICPA and NASBA. It provides a uniform approach to regulation of the accounting profession.


Source: BLS Data