Over the years, there has been a proliferation of different professional certifications available to become a CPA. With this in mind, this article explores the impetus for accountants to seek one or more certifications and also reviews approximately thirty-seven credentials currently available to accountants.
The classification CPA identifies licensed accounting professionals committed to the protection of the public interest. These practitioners provide financial statements audits and other qualification programs to help educate investors about organizations’ financial health. They have useful information and guidance on taxation and financial planning for individuals and families.
Companies and companies of all types need to plan and manage financial statements for accountants. As accountants directly impact their employers’ success, organizations are seeking professionals with training, experience, and expertise in their field. This means that employers are pursuing certified public accountants (CPAs) to fill many of these open vacancies.
Certified public accountants in the United States receive licenses from their home countries. Each State’s licensing requirements differ slightly but include the passing of an American Institute of Certified Public Accountants ( AICPA) uniform, certified public accounting test.
CPAs provide tax, financial reporting, and consulting services to companies around the world to guide strategic decision-making and promote market and sector development and development. Accounting professionals must have sufficient training — at least 150 hours — to pass a rigorous four-part test and meet the criteria for experience in order to receive a CPA license. They must also devote themselves to lifelong learning and abide by a strict Code of Professional Behavior requiring competence, objectivity, honesty, and freedom.
What is CPA?
A Certified Public Accountant is a financial planner who helps clients file taxes, abide by government laws, and handle their finances. They can choose from a number of career paths, including public accounting, corporate accounting, academia, non-profit, and government. Requirements to become a CPA vary by State, so students need to review the State’s licensing requirements in which they would like to operate as a CPA.
Now, before you roll your eyes, assuming that you already know what the CPA is and does, listen to us.
Since the CPA toolbox covers everything from tax preparation, financial statements, financial reporting, forensic accounting, internal auditing, and income tax, the primary role of the CPA is to help companies succeed. And while the CPA is an accountant, not all of the accountants are CPAs.
The CPA is different from the accountant. In fact, anyone who does any kind of accounting function-even anyone without a degree-may call himself an accountant. However, a certified public accountant (CPA) has received a professional certification through education, experience, and licensing. In addition to completing a study in accounting and gaining professional experience in public accounting, a CPA nominee must also be a Standardized CPA Review member. The test itself is developed and assessed by the American Institute of CPAs (AICPA). Licensing, however, is carried out by the State, the District, and the County Boards of Accounting. After licensing, then and only then, the individual can use the designation and present himself as a CPA.
The CPA exam is tough — intended so. In fact, according to AICPA, the average passing rate in 2015 was just under 50% for all four parts of the exam. That’s why, in addition to offering a wide range of skills, Franklin’s Accounting Curriculum and Graduate Program helps train practitioners for the CPA exam by providing the basic information needed to pass the exam.
Yet there are also incentives for being a CPA. Indeed, according to the Bureau of Labor Statistics, qualification in a particular area of accounting, such as the CPA, dramatically increases job prospects.
WHY BECOME A CERTIFIED PUBLIC ACCOUNTANT?
Professionals in all fields are certified and approved, and accountants are no different. Certified public accountants enjoy increased pay, increased job security, and more respect in the accounting profession. The five advantages below reflect only a few that can be enjoyed by certified public accountants. Bear in mind that if you already have applicable experience and/or advanced degrees, you can earn additional/enhanced benefits as soon as you become a CPA.
- Better Salary:
- Certified public accountant wages are usually higher than those received by non-certified employees. The pay rise that most CPAs earn shall cover all expenses associated with the licensing process in less than one year.
- Additional Work Opportunities
- Most of the top accounting professions require candidates to become certified public accountants. Bypassing the qualification test and obtaining a license in your home country, you can apply for a number of open positions that fit your level of education and experience. Also, 49 states allow CPAs to pass their licenses, which means that you can explore work opportunities throughout the United States.
- Work Security
- The least skilled and educated workers are often subject to layoffs in economic recessions. Becoming a certified public accountant serves as a policy to defend against recession. In addition, as financial regulations and legislation continue to evolve, companies should need CPAs to interpret these certain changes and ensure that their businesses maintain regulatory compliance.
- Credibility:
- Certified public accountants are usually well-trained, well-trained, and responsible accounting practitioners. As a consequence, companies value their opinions and rely on their judgment. Credibility also leads to increased duties, helping you to get promotions quicker than other accountants who are not CPAs.
- Working Abroad:
- Multinational companies need the skills of a certified public accountant. If you are certified, you can seek foreign career opportunities. Bear in mind that these positions may have other qualifications for application, like fluent speaking of a second language or having a background in the financial laws and regulations of a foreign country.
What Does a CPA Do?
Certified Public Accountant is a trusted financial planner who has met the stringent standards of being accredited by their State Accounting Board and has the authority to conduct duties such as preparing taxes, preparing government audits, representing clients in front of the IRS, accounting and financial planning. Certified public accountants can work for large companies, small businesses, non-profit organizations, and independent or group practices serving individuals and small, local groups and businesses.
Certified public accountants offer compliance, consultancy, and advisory services to customers in different fields, assisting individuals and companies with their financial planning and reporting, taxation, investments, mergers, and acquisitions. CPA in the business environment is part of the corporate management team, typically responsible for financial management or internal auditing.
How Many Years Does It Take to Become a CPA?
Becoming a CPA will take time. The steps to becoming a CPA involve a 4-year undergraduate degree and getting 30 additional credit hours over the course of one year. The majority of the states require two years of work experience. All this adds up to a 7-year process if you do it full time. Part-time, it will take you longer.
Education
Although all CPAs are accountants, not all CPAs are accountants. In order to become a CPA, you would need a mix of education and experience, as well as a Uniform CPA test, which is very comprehensive. Most countries need at least a bachelor’s degree as a minimum qualification.
However, in order to be approved, you must comply with the requisite on-the-job work experience and ethical standards. (For more information about how to become a CPA, visit Beat the CPA.) In short, CPAs are generally more trained than their peers (accountants). As a result, CPAs have higher pay than accountants. Companies respect the expectations that CPAs keep and are willing to pay more.
Why Earn CPA Certification?
Writing CPA behind your name will open up doors for leadership roles in organizations and will increase your career options, job security, and job satisfaction. CPA is a respected designation that shows that you have an in-depth knowledge of or board a range of finance-related subjects and that you are committed to excellence and ethics.
What is the key difference between an Accountant and a CPA?
An accountant usually holds a bachelor’s degree in accounting. However, to be a CPA, you must go that extra mile, in that you must obtain additional credit hours, gain work experience, and pass the Uniform CPA Examination. This additional effort is well rewarded in the job market because CPAs earn a premium salary and are preferred for management appointments. So you can see that all CPAs are accountants, but not all accountants are CPAs.
How to Become a CPA
The steps to getting your CPA certification are:
1. Earn a Bachelor’s Degree
2. Consider Earning a Master’s Degree
3. CPA Certification
4. Licensure
5. Continuing Education
Step 1: Earn a Bachelor’s Degree
First, students should earn a bachelor’s degree in accounting. To become a CPA, a student must have 150 semester hours of education. This is 30 credit hours in addition to the 120 credit hours required for a bachelor’s degree.
Students have several options for completing the required hours:
- Take some graduate-level courses in addition to their undergraduate courses.
- Enroll in a 5-year program that will fulfill the 150-hour requirement
- Double-major
- Take CPA exam prep courses at a community college.
- Earn a Master’s degree.
Students may be able to complete all or some of these credit hours to become a CPA online.
Consider Earning a Master’s Degree
A master’s degree is not required to become a CPA, though some employers might prefer candidates with one. To reach the required 150 semester hours of education, students may consider getting a MAcc (Master of Accounting) or an MST (Master of Science in Taxation). An MBA with a concentration in accounting is another option. Students may also consider 150 credit hour programs, which lead to a master’s degree.
CPA Certification
Once the educational requirements for taking the exam have been met, the next step to becoming a CPA is to take the Uniform CPA Examination, which is administered by the American Institute of Certified Public Accountants (AICPA). The exam consists of four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). Each section is four hours. Candidates must complete all four parts within 18 months and must earn at least a 75 on each part.
Licensure
Many states require that candidates have at least two years of public accounting experience to become licensed as a CPA. As with educational requirements, the type of experience and amount of experience required varies by State, so candidates should check these requirements before they begin their initial job search. Some states will also require candidates for CPA licensure to take an ethics course or an ethics exam. Once all of the State’s requirements for CPA licensure have been completed, candidates may apply for licensure through the State’s Board of Accountancy.
Continuing Education
To maintain their licensure, most states require CPAs to take continuing professional education courses (CPE) and participate in professional development opportunities to maintain their professional competence. The rules and regulations will vary by State. CPAs must keep up with their State’s Board of Accountancy’s continuing education requirements, which typically means attending classes and seminars.
CPA salary outlook by years of experience
CPA salaries vary greatly depending on the number of years of experience.
Entry-level CPAs
The data from the United States Bureau of Labor Statistics indicates a large gap in earnings, with the lowest 10% earning less than $43,650, while the highest 10% is earning more than $122,840. Below is a pictorial illustration of the entry-level (less than one year) of CPA salaries.
Entry-level CPAs can be expected to make between $40,000 and $65,000 depending on the organization’s location and size.
As CPAs gain experience, they are able to perform more tasks with confidence. As such, junior CPAs with one to three years of experience can expect to earn anywhere from $52,000 to $87,000. Most of the public accountants have already chosen their career paths at this point.
For example, others choose to specialize in tax matters, and others choose to specialize in auditing, whether public accounting or corporate; senior accountants with four to six years of experience are expected to earn between $66,000 and $110,000.
CPA Manager and Director Salary
Managers and directors typically have more than seven years of experience. With this amount of experience, CPAs have the highest pay, with some receiving up to $150,000 or more.
CPA Exam
You must mandatorily first pass the Uniform CPA Examination ® to become a Certified Public Accountant ( CPA).
The CPA Exam consists of 4 four-hour sections: Audit and Attestation (AUD), Market Climate and Principles (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). You must compulsorily pass all four parts within 18 months, receiving a minimum score of 75 for each segment.
Financial Accounting and Reporting
The FAR segment measures the experience and comprehension of business companies’ financial reporting systems, non-profit organizations, and government agencies. It contains 90 multi-choice questions as well as seven task-based simulations that use real-life job scenarios to test your skills.
Auditing and Attestation
The other four-hour chapter, AUD, is a bit easier, particularly if you’ve tackled FAR first. It also contains 90 multi-choice questions and seven task-based simulations. It includes the preparation and analysis of commitments, internal controls, information collection and reporting, and the preparation of communications.
As with FAR, test-takers need to demonstrate knowledge of international accounting standards, in particular the distinction between International Auditing Standards (ISAs) and U.S. auditing standards. They shall recognize circumstances that may be immoral or a violation of professional ethics and shall assess the necessary measures to be taken in such situations.
Regulation
You’re permitted to take REG for up to three hours. It includes ethics and professional accountability, corporate law, tax and accounting practices, and federal taxation of persons, corporations, and property transactions. This segment includes 72 multi-choice questions and six task-based simulations.
Testers must demonstrate that they recognize the ethical and legal obligations of certified public accountants as well as the legal ramifications of business transactions in terms of accounting, auditing, and financial statements. This portion deals with federal and commonly followed state legislation. You must prove that you recognize the rights, obligations, and responsibilities of the debtors, creditors, and guarantors, the examination and appeal procedure used by the Internal Revenue Service ( IRS), and the important alternative minimum tax and both estate and gift taxes.
Business Environment and Concepts
BEC is possibly the toughest section, and most of the candidates go through it in their first attempt. This three-hour segment deals with market processes, economic concepts, financial management, and information technology. You must demonstrate that you understand corporate governance, financial risk management, financial management methods, information and communications systems, strategic planning and business management, and understand the economic principles of global business and how they affect the organization’s business strategy. Testers are called upon to determine the effect of market cycles on an entity’s activities and to analyze operations and quality management measures to track and monitor efficiency and costs.
The Bottom Line
Even without the appropriate preparation and work experience, the CPA test takers have their work cut out for them. However, the award is a prestigious professional distinction that most frequently comes with a slightly higher rate of pay.
The job outlook for CPAs
The Bureau of Labor and Statistics (BLS) already projects that accountants and auditors’ jobs will rise by 6% between now and 2028. Those eligible for CPA work are in much greater demand, with public accounting firms and other organizations hiring at all levels. Most of the activity focuses on audit and tax experts’ addition, but companies are also pursuing expertise in risk, enforcement, and mergers and acquisitions.
As CPAs gain more experience under their belts, many naturally want to take on more responsibilities, make more strategic business decisions, and step up the career ladder.
CPA requirements
The following are a few most common requirements that are needed to become a CPA:
- Must be a minimum of 18 years
- Complete the necessary minimum experience requirements to become licensed in your State
- Must have a good moral character
- Strong organizational skills
- Excellent attention to key detail and strong analytical skills
- Strong mathematical skills
- Must have a social security number
- Understanding of accounting software and Microsoft Office
- Great communication skills
- Knowledge of local, State, and also federal tax laws and regulations
- Complete the necessary education
- and fulfill the requirements to become licensed in your State
- Obtain your Certified Public Accountant (CPA) certification
Common CPAs Career Paths
CPAs and future CPAs have a range of career options to choose from. In the field of public accounting, you can work with any big organization, ranging from a large multinational CPA company to a small local accounting firm. Within the business, you can work in areas such as audit, tax, and management consultancy. The same applies to business and industry, where you can select jobs in businesses of all sizes, working in a variety of fields such as financial accounting and reporting, management accounting, financial analysis, and treasury/cash management. CPAs may also provide services in specialist accounting fields such as financial forensics, company valuation, personal financial planning, and I.T. Counseling. Inside the government, you will build a path to success at the federal, State, or local levels. Non-profit agencies and education also provide a wide variety of resources.
CPA License
There is still a lot of misunderstanding between a CPA certificate and a license. They both mean different things. They even grant you varying quantities of legal authority and obligation, but they seem to be the same thing.
In most instances, a CPA certificate is a clear acknowledgment. This indicates that you have passed the CPA exam and have met the minimum criteria to take it. On the other hand, a CPA certification is given when you meet all the accounting board criteria to become a CPA. As a result, you are given state authorization to practice public accounting.
Understanding Certified Public Accountants (CPA)
The designation of a certified public accountant (CPA) requires a bachelor’s degree in business management, finance, or accounting. Individuals are also expected to complete 150 hours of education and have no less than two years of public accounting experience. CPAs must pass a certification test, the criteria of which differ by State. In addition, retaining the CPA status requires the completion of a minimum number of continuing education hours each year.
CPAs have a wide variety of career opportunities available, both in public and corporate accounting. Individuals with a CPA designation can also transfer to executive roles such as controllers or chief financial officers ( CFOs). CPAs are known for their role in preparing income tax but may specialize in many other fields, such as auditing, accounting, forensic accounting, management accounting, and information technology.
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