A CPA, or Certified Public Accountant, is a popular career choice for those studying accounting and related fields of business finance. For many accountants, licensing can be a crucial bridge to professional accounting practice in many instances. Like other accounting professionals, licensed CPAs can work for third-party accounting firms or start their own business, offering a variety of accounting services from tax preparation and balancing books. What sets CPAs apart is a certification that proves they have the training, education, and experience to excel in these areas and more, including the performance of full audits.
Are you interested in learning how to become a CPA? The key word in CPA is “Certified,” which means the accountant must go through a specific career path. Aspiring CPAs must plan on taking an important professional exam to earn this valuable certification. This certification is often vital for practice in the field because it reflects the expertise and experience necessary to offer others professional accounting guidance, as well as sign off on the validity of financial statements. Take a look at the steps to becoming a CPA to see if it’s the right choice for you!
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1. Decide What Financial Position You Want
It may sound simple, but you should start by making sure that becoming a CPA is right for you. You can certainly choose a financial position that doesn’t require a CPA or isn’t even in accounting. Financial analysts, financial managers, budget experts, and many other roles are possible if you enjoy crunching some numbers but aren’t a fan of the accounting path.
If you decide that you prefer an accounting career, there are a variety of accounting positions that you can choose. Many of these are entry-level roles that help new accounting professionals gain entry into their field of interest where, with experience and further education—and, potentially, a CPA designation—they could eventually progress into positions such as senior accountant, CFO, or controller. For those interested in practicing public accounting, there is the chance to grow within the ranks of a firm.
Entry opportunities can include basic bookkeepers for businesses, Licensed Tax Preparers that specialize in helping people complete tax forms, Licensed Tax Consultants for more complicated matters, or even aiming for a position at an IRS branch to deal with specific problems. There are also a number of other career paths for accountants, such as forensic accountants, internal auditors, financial analysts, and more. The Bureau of Labor Statistics reports that, as of 2019, accountants and auditors made a median pay of $71,550 per year.
A Certified Public Accountant has earned a license that allows them to work for a public accounting firm and support accounting functions that require a CPA license to perform. CPAs work in a variety of settings, including both public accounting firms and private organizations, and are often hired by large organizations to oversee financial functions of the organizations in roles such as controller, auditor, and CFO. It’s the career path that offers the flexibility to pursue varying organizational functions and levels of responsibility.
2. Plan Your Higher Education Path
Before you take the CPA Exam, you are required to hold a bachelor’s degree with 120 credits. Some states require you to have 150 credits prior to sitting for the exam, so you’ll want to check with your state to be sure you understand the requirements you’ll need to follow. All states require 150 credits to be licensed as a CPA. Individual states differ on what those credits need to be in. Almost all states have a minimum number of accounting credits as well as a minimum number of business credits required. While your bachelor’s degree does not have to be in an accounting field if you are aiming to be a CPA you will want as much accounting specialization as you can get.
A master’s degree is not required to be a CPA. However, options like a Master of Science in Accounting online are excellent paths to prepare for the exam if you feel like you need more time or experience. The master’s degree will get you the additional 30 credits needed to become certified as a CPA. A master’s degree can also help you specialize in more specific accounting fields, start your own business, or offer a higher skill set that can make finding an accounting job at a big firm easier.
3. Take the CPA Exam and Ethics Exam to Earn Your License
Wondering how to get your CPA, how to know when you’re ready? Many states allow students to take the CPA exam after completion of their undergraduate accounting degree. The license is issued after you pass the exam and you have earned 150 credits and fulfilled work experience requirements, which vary from state to state. The Unified CPA Exam is created, regulated, and updated by the NASBA, or National Association of State Boards of Accountancy. This organization can also be a huge aid in studying for the Exam and finding the right career path.
Steps to becoming a CPA can also require that you take an additional Ethics Exam that covers the AICPA’s professional code of conduct and pass with at least 90%. Although the majority of states don’t require an Ethics component outside of Continuing Professional Education (CPE) requirements for CPAs, wherever it is required, the Ethics Exam must be taken within one to two years of the Unified CPA Exam.
Note that even though the CPA exam is only taken once, CPA licensing requirements can vary by state. Once you have passed and fulfilled the requirements where you choose to practice, the license is issued to you. However, if you choose to practice in another state, while you will not need to retake the Unified CPA Exam, you may need to meet additional requirements for licensing set forth by that state.
4. Earn the Required Amount of Work Experience
With the CPA and Ethics exams passed, accountants then (if necessary) earn the rest of their education hours, and then prepare to meet the required amount of work experience. Similar to a residency for doctors, accountants must work for a certain amount of time under a licensed CPA. State requirements can vary, but usually 2,000 to 4,000 hours—one to two years—is the common requirement.
It’s a good idea to make arrangements to intern during your education or arrange to complete your qualifying work experience before you take your CPA exam for a clearer route to earning the necessary field experience after you pass. States allow for the flexibility to meet work experience requirements through qualifying comparable experience completed in settings other than public accounting firms as long as the work is supervised by a licensed CPA. Your college career services can be a big help here. After the work hours have been affirmed by the licensed CPA, you will earn your own full CPA license.
5. Choose a CPA Specialization
Not so fast! Your CPA license is a great start, but throughout this process, you should also be thinking about what sort of specialization you want to have in the world of accounting. Choosing a specialization allows you to aim for additional credentials that open the door for higher positions or a larger salary—it’s also a great way to decide what master’s degree program you may want to choose. Common CPA specialties include:
- Auditing: This refers to third-party audits businesses may want of their current books and financial systems for legal or strategic purposes.
- Government: Government agencies need accountants, and this specialty deals with many of the unique budgeting requirements public institutions have.
- Nonprofit: Much like public organizations, nonprofits have specific accounting concerns and unique goals that can require specializations.
- Taxes: CPAs that specialize in taxes can offer businesses advice on how to save money and help companies complete complicated tax forms.
- Forensics and Valuation: CPAs with this specialty can dig into asset valuation and financial documents to look for criminal activity like fraud.
- Information management: This specialty focuses on technological advances in accounting and how tech solutions can make accounting easier for businesses.
- Personal financial planning: CPAs don’t strictly need to work for businesses. There is also demand for tax and retirement planning, estate management, and investment advice.
6. Renew Your License as Needed
With your CPA in hand, you are ready to pursue your career path. Hopefully, by this time you have an idea about what specific accounting firm you would like to work for, or if you would prefer to start your own business. Either way, this is also a good time to consider further study in your specialization, and perhaps a master’s degree to round out your education.
Becoming a CPA does take one final step: For those working as active CPAs, states often require periodic CPA license renewal, including completion of CPE credits with an Ethics component as part of this renewal process. The requirements for license renewal periods vary from state-to-state. Both public and private CPA practitioners must observe the licensing and CPE requirements. Accounting firms are typically aware of continuing education standards for CPAs and may provide time and resources to make licensing renewal easier.
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