How to Become a CPA
Interested in learning how to become a Certified Public Accountant (CPA)? You are in the right place.
Privately held companies, multinational corporations and non-profit organizations alike depend on the skills of certified public accountants. CPAs help businesses stay strong and competitive, and ensure financial integrity through account analysis, strategic tax planning, risk management and investment consulting. As the global business environment becomes more complex by the day, so does the demand and salary ranges for CPAs.
Though becoming a CPA can be tough, knowing the requirements and steps involved can make the process seem simple. This is where we come in. Here you will find job descriptions, areas of specialization, salary information, requirements for qualifying for the exam, and thesteps involved in applying for licensure.
Did you know that today’s CPAs have more career options than ever before? Whether your interests lie in serving corporate America, saving the environment, investigating securities fraud or any number of challenging possibilities, passing the rigorous CPA exam can be your first step to a rewarding CPA career.
CPA Job Description
CPAs help individuals, for-profit businesses, government agencies and non-profit entities remain financially secure by keeping accurate records, assisting with tax preparation and properly filing required documents. In general, these professionals add value to their clients or employers by preparing and analyzing financials, planning tax strategies in alignment with company goals, and providing investment advice.
CPAs can choose to work in public accounting for one of the “Big Four” firms, for government agencies, non-profits, privately owned companies or publicly traded corporations.
CPA Areas of Specialization
Becoming a CPA means you’ll have a wide variety of career choices, in two general areas: public accounting, or corporate and business accounting. From there, the options are many and include:
- Internal auditing:Internal auditors verify the efficiency and effectiveness of a company’s internal controls, the accuracy of its financial data, and check for waste, mismanagement and fraud.
- Forensic accounting:These specialists look for evidence of securities fraud, money laundering, embezzlement and tax evasion.
- Managerial accounting: Consulting to and preparing financial documents for a company’s management team to help them make good business decisions. Preparing budgets and strategizing for the future are important aspects of the job.
- Information Technology: Combining IT and accounting, this specialization includes activities such as testing systems to ensure security, accuracy and compliance with regulations.
- Environmental accounting: Involves monitoring green initiatives, taking care of compliance audits, and managing disputes.
- Tax: Guiding companies in effective tax strategies to avoid unnecessary costs. Tax accounting involves staying on top of complex and changing tax laws.
Before the CPA Exam: Earning Your Degree
The CPA exam is rigorous and demanding, and requires a CPA exam review course to increase your chances of passing. Plus, there are additional requirements you’ll need to meet before you sit for the exam in 2015. Regulations vary by state, but most require 150 semester hours of instruction – which is 30 hours beyond the typical four-year bachelor’s degree. In addition, some states will require a minimum number of semester hours of accounting instruction, and a minimum number of hours of business instruction. For example, certain states require 30 hours of accounting and 25 hours of business, while others require 35 hours of accounting, but have no minimum for business instruction. Be sure to check the CPA Exam requirements for the jurisdiction in which you’ll be taking the CPA exam.
Many CPAs hold bachelor’s degrees in accounting; others earn business degrees, and then go on to an MBA with a concentration in accounting program. Some colleges offer accelerated master’s degree programs for working professionals. Many students opt to complete the 150-hour requirement while pursuing their bachelor’s degrees, while an accelerated five-year accounting program works best for others.
The Best Accounting Colleges
Perhaps one of the following universities, named “Best Accounting Colleges” by U.S. News & World Report, is the right choice for you to pursue your accounting degree:
- University of Texas – Austin
- University of Illinois – Urbana-Chicago
- Brigham Young University
- University of Pennsylvania
- University of Michigan
- University of Southern California – Los Angeles
- Indiana University
- University of Notre Dame
- New York University
- University of North Carolina – Chapel Hill
Why is the CPA Exam Required
Earning an accounting degree, being employed as an accountant (Non-CPA), and becoming a CPA are 3 different activities altogether. A CPA can be an accountant, but an accountant cannot claim they are a CPA without establishing licensure via passing the CPA Exam and applying for licensure. The CPA exam is necessary because CPAs have access to the sensitive financial information of countless businesses and individuals. In the wrong hands, finances could be used in a harmful manner. Certification is a means to ensure the public that CPAs possess the high-level technical skills, advanced knowledge and ethical standards to instill a sense of trust.
The Four Sections of the CPA Exam
The CPA exam consists of four separate exams, which are taken one at a time. Candidates may take the exams in any order; but once you pass the first exam, you must pass the other three within 18 months.
- Audit and Attestation (AUD): This is the longest section, at 4.0 hours. It covers topics like performing audits, evaluating evidence, professional responsibilities, ethics and communicating audit findings.
- Financial Accounting and Reporting (FAR): This section is 4.0 hours, and topics such as covers typical financial statements, specific transactions, governmental accounting and non-profit accounting.
- Regulation (REG): This section is 3.0 hours long, and tests candidates on tax ethics, business law, federal tax procedures, and more.
- Business Environment and Concepts (BEC): This section also at 3.0 hours, is still tough, covering things like corporate governance, information systems and strategic planning.
Candidates may sit for the CPA exam during the first two months of every quarter: January/February, April/May, July/August, October/November. Months when the exam is not offered are referred to as black out dates. The exam is usually offered on several days during the month; check within your local jurisdiction for specific dates and times.
CPA Exam Preparation and Review
Passing the CPA exam requires preparation. Through the second quarter of 2012, the collective pass rate of any section of the exam is less than 50% for first time test takers! When you’re ready to sit for the CPA exam, you’ll want every advantage to increase your chances of passing – so you can move on and start your career.