Learn how to become a CPA. There are over half-a-million licensed Certified Public Accountants in the U.S. The CPA credential is a license issued by a state or territory of the U.S. that authorizes the holder to practice as a CPA in that state or territory. Licensing of CPAs helps protect the public interest because only those who have met prescribed requirements can identify themselves as CPAs. Becoming a CPA involves years of education, professional accounting experience, and months of hard work and commitment to pass the exam.
What do CPAs do?
CPAs provide a wide variety of services and are employed in public accounting and other professional services, business and industry, government, and education. CPAs offer various services including accounting, auditing, financial reporting, implementing and managing internal controls and information systems, personal financial planning, tax, technology consulting, and business valuation.
CPAs have a number of career paths from which to choose.
- Public CPAs can work for a large, international CPA firm or a small accounting practice in audit, tax, and management consulting.
- Corporate CPAs can choose careers in companies working in financial accounting and reporting, management accounting, financial analysis, and treasury/cash management.
- Government CPAs have responsibilities in auditing, financial reporting, and management accounting. At the federal level, CPAs work for the FBI, IRS, Department of the Treasury, and the General Accounting Office. At state and local levels, CPAs conduct financial performance or compliance audits for school districts, government departments, correctional facilities, worker’s compensation systems, etc.
- CPAs in Non-Profit Organizations provide the information these institutions need to determine that the benefits and services don’t exceed revenues. A CPA can help the organization solve tax problems, set up an internal control system, budget resources, and prepare financial data for fundraising.
CPAs also provide services in specialized areas of accounting like financial forensics, business valuation, personal financial planning, and IT consulting.
The Benefits of Being a CPA
The CPA certification is highly respected and internationally recognized.
- To a potential employer, it means you have high ethical standards, valuable experience, superior education, and amazingly good skills.
CPAs are always in demand.
- Every moneymaking entity requires the skills of a CPA.
- CPAs are needed anywhere and everywhere.
- Internal company accountants often climb the corporate ladder and become officers or board members because of their experience and expertise.
CPAs make a good salary.
- Most big public accounting firms offer a nice bonus for passing the CPA exam.
- Once you become a CPA, you can expect a salary raise of 10-15%.
- Serious earning potential over time gives CPAs excellent job security.
Current CPA Job Outlook and Salary Statistics
The Department of Labor and Statistics predicts that the employment of accountants and auditors will grow faster than average for accountants and auditors at a rate of 11% through 2024. Accounting and auditing regulations are getting stricter, and the economy will continue to expand around the globe.
- Accountants just out of college typically start their careers with a salary range of low to mid $50K.
- With 4-6 years of experience professionals in accounting can expect their salary to reach $60K to mid $70K.
- At a senior management level with 10+ years experience, a CPA can make well over $100K
7 Steps to Becoming a CPA
1. Meet your state board of accountancy educational requirements to take the CPA exam.
Each state has different education requirements for the exam, but most require at least a bachelor’s degree in business or accounting with specific coursework and credit hour requirements. Check with your state’s board to see what the requirements are in your state.
2. Apply for the CPA Exam
Apply for the CPA exam can be confusing because there are several steps involved in the application process.
- Send college transcripts to the state board. Send in all of your college transcripts to your state board of accountancy before applying for the CPA exam. It can take a while for the colleges you attended to send your transcripts to the state board. You don’t want to hold up the board review of your application because they are waiting for your transcripts. Order them early on.
- Complete the CPA Exam application and submit it with the application fees. Application fees can range from $150 to $250.
- Receive your ATT and sign up for the Exam sections you plan to take. Once your application for the CPA exam is approved, you will receive an authorization to test (ATT), which will allow you to sign up for a CPA exam section. The ATT is in effect for 90 days, so you should decide which part of the exam you want to take first. You’ll log in to the NASB account and pay the exam section fees, which usually run $200 –$250 per section. A word of caution: If you do not sign up for an exam section within 90 days of receipt of the ATT, you forfeit your application fee.
- Schedule your exam dates. Within four weeks of applying for the CPA exam, you should receive a Notice to Schedule (NTS). The NTS is you official document that allows you to sit for the CPA exam. Once you have the NTS, log in to the Prometric testing center website and schedule your exam date. The NTS is valid for six months, so you have six months to schedule the exam date for the section you want to take. At the time you schedule your exam, a CPA Exam registration fee of between $30 and $150 will be due.
Don’t sign up for and schedule and pay for all sections of the exam at once. Only sign up and pay for the CPA exam sections you want to take within the next six months. You can schedule and take the rest later.
3. Set a Study Schedule and get CPA Review Course
How you plan to study and what materials you use to study from can make all the difference between passing each section on the first try or failing.
Set up a study routine and stick to it.
- Pick times each week where you study and do nothing else.
- During your study times, you need 100% focus; so get rid of distractions that keep you from studying.
- Build breaks into your study time to give your mind a rest.
There are many live or technology-based CPA Review Courses on the market, the cost of which can run between $1,800 - $3,500.
Use Test-Guide’s reviews of the top 6 CPA review courses to make your choice based on budget, learning style, guarantees, and more.
4. Pass Your CPA Exam
To become a licensed Certified Public Accountant you must first pass the Uniform CPA Examination®. The CPA Exam is a 16-hour exam that consists of four, four-hour sections:
- Auditing and Attestation,
- Business Environment and Concepts,
- Financial Accounting and Reporting, and
Each section is composed of five “testlets” or groups of test questions. You need to pass all of the four sections in 18 months by earning a minimum score of 75 on each part. If you fail to pass all four sections in the 18-month window, the first exam passed will expire and have to be retaken.
5. Passage of the Ethics Exam
After you pass the CPA exam, you will need to take an 11-hour ethics exam administered by the AICPA. Once you sign up for the ethics exam, you will be mailed a textbook that contains all of the ethical duties and obligations that CPAs are required to uphold in their practice.
The exam is an open-book, multiple-choice test that you can take online or through mail correspondence. Not every state requires the ethics exam, so you should check with your state board to see if it is required. A score of 90% or above is needed to pass the exam. The cost of the ethics exam is $140 for AICPA members and $189 for non-members.
6. Complete the Work Experience portion of the CPA exam eligibility requirement.
All states have different work experience requirements. They range from 6 months to 2 years of experience under the direct supervision of a CPA, sort of like an apprenticeship. You can check and see how many hours you need and track how much experience you already have at NASBA’s Experience Verification section.
7. Apply for your CPA license
The CPA designation is not a federally issued license. Instead, it’s issued by each state individually. After you have completed all of the educational and work experience, and passed the CPA exam, you just need to fill out your CPA license application, pay the state license fees and obtain your certificate. Depending on which state you live, your license fee will cost between $50 - $500.
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