If you are pursuing a degree in accounting, you should consider becoming licensed as a Certified Public Accountant. Having a CPA license can catapult your career and open doors of opportunity for you. Whether you decide to work in public accounting or private industry, a CPA license can separate you from the competition and improve your earning potential. Read on to learn more about Certified Public Accountants.
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What is a CPA, exactly?
Certified Public Accountants, or CPAs, are trusted financial professionals that have met the tough licensing requirement in their state. They are knowledgeable advisers that can work in a variety of positions in either public accounting or private industry. They are considered experts in their field and must meet a high standard of ethics and skill within the profession.
How do you become a CPA?
CPAs become licensed in the state that they choose to practice in. While many of the requirements to become a CPA are the same regardless of which state you take the exam in, there are some differences.
The main requirements for becoming a CPA include:
- A Bachelor’s Degree in accounting or business
- Meet the state-specific requirements for the types of classes that you must complete
- Complete 150 credit hours
- Pass all 4 sections of the Uniform Certified Public Accounting Exam
- Meet the state’s work experience requirement
- Complete an ethics exam
Once you have satisfied all of the above, you can apply to become a Certified Public Accountant with the board or regulatory agency in your state. You can read more about the requirements for becoming a CPA here.
What is on the CPA exam?
According to the American Institute of Public Accountants, the CPA exam is made up of four sections:
- Auditing and Attestation
- Business Environment and Concepts
- Financial Accounting and Reporting
You must pass each section of the exam with a minimum score of 75. Each section is taken on its own. Once you pass the first section, your grade is good for 18 months. If you haven’t passed all four sections by the end of the 18 months, you will be required to retake any section that exceeds that timeline.
What does a CPA do?
While they can perform general accounting and bookkeeping services, licensed CPAs can also deliver a variety of other services. These include:
Audit and Assurance Services
A CPA typically provides audit and assurance services to public and private companies. The highest level of service that a CPA provides is an independent audit of a company’s financial statements. Here they perform various procedures in order to issue an opinion as to whether or not the statements are free from material misstatements. A company may need to provide audited financial statements to a regulatory agency, its bank, or its shareholders. CPAs also perform other assurance services, such as financial statement reviews and compilations. Only CPAs can perform audit and assurance services of this nature.
Tax Planning and Representation
CPAs often work with individuals and businesses to prepare and file their tax returns. In addition, they can help with tax planning services to help their clients minimize their tax burden. They can also represent clients who have issues with the Internal Revenue Service or their state or local taxing agency.
- Consulting Services –
A CPA can provide a wide array of consulting services for its clients. They can assist with daily accounting operations. CPAs can also provide operational and strategic support for companies. They can assist with preparing financial budgets, analyzing data, evaluating the controls that a company has in place, and help with long-range planning. A CPA that specializes in technology may also assist a company when implementing new software programs.
CPAs can perform investigative accounting services where they look for instances of fraud in a company or an individual’s transactions. They are often looking for criminal activity such as embezzlement and fraud.
What positions do CPAs typically hold?
A CPA may work in public accounting firms or for private companies. They can work in a variety of position including;
- Tax accountants
- Business consultants
- Chief Financial Officers
- Finance Directors
- Forensic accountants
In addition to the above, CPAs may be employed in other operational roles within a company, such as a Chief Operating Officer, or they may even become business owners themselves.
Why should you become a CPA?
There are quite a few benefits to becoming licensed as a CPA. These include:
CPAs have to complete 150 hours of coursework and pass a rigorous exam to become licensed. In addition, they are often required to complete continuing education courses to maintain their license. With such extensive licensing requirements, CPAs are often highly regarding for their expertise and skill. Having a CPA license can give you an advantage over other professionals that have not attained their milestone in their career.
On average, CPAs can make between 10-15% more money than an accountant without a license. Due to increased globalization, CPAs have been more valuable across the world and have opportunities to take multiple paths in their career. Finally, the profession is expected to experience above-average growth in the coming years due to more CPAs retiring.
Most states require CPAs to take continuing professional education in order to renew their licenses. This requires the CPA to stay current with regulatory changes in the accounting profession. In addition, CPAs can also specialize in their services focusing their services in certain areas such as estate and tax planning, forensic accounting, and internal control audits.
CPAs who have speciality practices may find more job security as there is less competition. Also, changing rules and regulations continue to open up opportunities for CPAs to expand their skills.
Deciding to pursue a CPA license will require an investment in your time. However, the investment will pay off as it can help you to advance your career and increase your earning potential. Plus, the prestige and respect that a CPA license can pave the way for new career and growth opportunities.
1. What is a Certified Public Accountant (CPA)?
A CPA is a professional who has met certain requirements set by their state board of accountancy. In order to become licensed as a CPA, an individual must complete 150 hours of coursework, pass the Uniform CPA Exam, and meet any other requirements set by their state board of accountancy.
2. What does a Certified Public Accountant (CPA) do on a daily basis?
A CPA's job description varies by employer, but they generally provide financial services such as preparing financial statements, preparing tax returns, and auditing financial records.
3. What is included in the Certified Public Accountant (CPA) exam?
The CPA exam covers a variety of topics, including auditing and attestation, business environment and concepts, financial accounting and reporting, and regulation. The exam is comprised of four sections, each of which must be passed in order to become licensed.
4. What are the benefits of becoming a Certified Public Accountant (CPA)?
Some of the benefits of becoming a CPA include increased prestige, earnings potential, and career development opportunities. Additionally, licensed CPAs typically enjoy greater job security than those without the designation.
5. What is the difference between an accountant and a Certified Public Accountant (CPA)?
All CPAs are accountants but not all accountants are CPAs. The main difference between an accountant and a CPA is that a CPA has met additional requirements to become licensed as a certified public accountant.