Accounting is one of the top academic fields, pursued by many each year. According to the American Institute of CPAs (AICPA), certified public accountants will be among the leading professionals in this sector. A number of factors have been highlighted, which have increased the need for skilled CPAs. These are:
The business environment has become more regulated, pressing the need for skilled accountants
75% of current CPAs will be retiring in the next 15 years, leading to many new job openings
Globalization has stressed the need for more standardized accounting procedures, practices and international reporting standards
Certified public accountants offer highly-specialized accounting services in auditing, international financial reporting, taxation, management, and other areas.
How to Become a CPA
What sets these professionals apart from regular accountants is their license and technical training. To become a certified public accountant, individuals must meet the state licensing requirements and pass the CPA exam. Each state has a board of accountancy or CPA that determines the minimum requirements for becoming a CPA. This board is mainly responsible for governing the rules and setting standards for all CPAs.
The basic steps to becoming a CPA have been outlined below:
Get a bachelor’s degree
Pass the CPA exam
Complete an ethics course
Meet the experience requirements
Apply for a CPA license
A Bachelor’s Degree
While there is no exact academic route to becoming a CPA, it is recommended that individuals earn a bachelor’s degree in accounting or business related field. Most states require candidates to complete a defined number of semester hours in certain accounting courses, professional courses, and business related courses. Here are a few of the areas students must cover in their programs:
Accounting is among the most basic courses that must be covered. Students must have an in-depth understanding of the principles of accounting and finance.
This field highlights the legal aspects of business activities, and regulations designed for corporations. Individuals must have a thorough understanding of the current business laws and legal boundaries.
This area emphasizes on the main financial concepts and management principles. In this course, individuals will acquire a thorough understanding of financial modeling, fund management, and develop strong quantitative skills.
A course in economics will enable students to learn about the social science processes and economic principles that govern various aspects of the society. Individuals must be aware of concepts related to distribution, supply and demand, and production.
Other courses such as liberal arts, taxation, auditing, mathematics, statistics, marketing, communications, information systems, and management may also be included in the educational requirements. It is important that all CPA applicants check with their state accounting boards to learn about the educational requirements.
Take the CPA Exam
Individuals who meet the educational requirements may take the CPA exam in their state. This exam is conducted by the state board of accountancy and is developed by the AICPA. To apply for the exam, applicants must submit the required documentation and fill out the necessary application. The exam is computer-based and comprises of a set of questions. Applicants must complete all the sections and acquire passing marks.
The main sections covered in the exam are:
Financial accounting and reporting
Auditing and attestation
Business environment and concepts
Each section must be completed within the allotted time. Upon receiving the scheduled exam date, applicants are advised to revise the learning material and prepare thoroughly for the exam. The test preparation courses may be available in the form of books and online materials.
CPA Ethics Exam
The ethics exam is also a requirement for getting a CPA license in most states. Applicants must check with the accountancy boards in their states to learn about the ethics exam. The AICPA offers an online professional ethics comprehension course. Individuals can study this course online and take the test. The scores are then communicated by the AICPA to the relevant state board of accountancy. Most states require individuals to take this test after the CPA exam.
Work Experience Requirements
After taking the CPA exam and successfully passing it, individuals may then seek work in relevant fields and acquire work experience. Having at least two years of work experience is mandatory to qualify for a CPA license. The work experience must include at least 500 verifiable hours. The exact requirements may vary from state to state.
Get the License
Individuals who meet all the educational and work experience requirements may successfully qualify for a CPA license. The application process will vary from state to state. Individuals must regularly renew their license and keep up with the continuing education requirements.
Professional CPA Organizations
There are many professional bodies that regulate the profession. These bodies offer various services such as licensing and renewal services, career guidance services, and membership. Here are a few of the main professional CPA bodies:
American Institute of Certified Public Accountants (AICPA)
State Societies of CPA
CPAs must demonstrate proficiency and skill in their field, and must be able to tackle various business complexities. Their income level will depend upon a number of factors such as a state where they work, employer organization, and specialization area. However, according to O*NET OnLine, accountants and auditors earned a median annual income of $65,080 in 2013. The demand for finance professionals such as CPAs is high, and is expected to grow at a steady rate in the coming years.