How to Become a CPA Steps & Certification Requirements

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Along with the education and work experience, all Certified Public Accountants must pass rigorous testing. Some accountants focus on business management accounting, which helps organizations leverage company performance metrics and other data to make business decisions. Others become a Certified Fraud Examiner (CFE) and help businesses and government agencies prevent, detect, and investigate fraud. Some work as financial advisors to help high-net-worth individuals manage their financial affairs.

• The Association of International Certified Public Accountants (AICPA) sets the standards and qualifications for the CPA professional designation.
• The lowest 10% of these employees earned $47,970 per year or less.
• In the cases of both tax and financial advisors, you’ll want to look for licensed professionals.
• They also give you an opportunity to gain experience using industry-standard computer applications and software.
• New York students should contact the NYSED Office of Professions regarding professional licensure.

Within those 18 months, there are several windows to retake tests, but you cannot retake a section in the same window. After receiving your test scores, you must wait 24 hours to reapply for the same section. As with other aspects of CPA exam planning, refer to NASBA for state-specific information.

Is a Two-Year Accounting Degree Worth It?

Christine graduated from Michigan State University with degrees in Environmental Biology and Geography and received her Master’s from Duke University. In high school she scored in the 99th percentile on the SAT and was named a National Merit Finalist. PrepScholar Admissions is the world’s best admissions consulting service. We’ve helped thousands of students get into their top choice schools, from state colleges to the Ivy League.

• As an undergrad, you’ll take classes in many business and accounting topics, such as economics, finance, marketing, business law, and more.
• You take each part of the exam individually, in any order that you like.
• Even though their titles are often used interchangeably, they perform different services.
• Accounting assistants gain experience by working as junior bookkeepers or accounting clerks.
• CPAs are often the people who are called in to conduct audits — assessments of a business’s paperwork and financial statements.

Sometimes this is because of their exceptional prior work experience, other times it is because they have put a great deal extra effort into advancing their career independently. In order to become an accountant, you need to either complete an accountancy degree or similar qualification, or acquire the knowledge through experience. The latter choice is inadvisable if you wish to work for a company, as they will prefer someone who has been trained and has proof of their knowledge before they will hire them.

What is the difference between an accountant and a CPA?

Pass rates for each section in 2022 ranged from around 45% to 60%, according to AICPA. Be sure to take your time studying and practicing for the exam, and review the CPA exam blueprints offered by AICPA. One aspect of this is forensic accounting—poring through financial history in search of misconduct. These CPAs perform compliance checks and develop systems to maintain that compliance. Just as a law license defines a lawyer, the CPA license tells the public that an accountant has mastered the critical elements of the profession.

They may be asked to handle financial documentation as companies go public or use their accounting expertise to assist with international trade and acquisitions. Accountants perform essential tasks across all industries, and their pay matches that responsibility. The U.S. Bureau of Labor Statistics (BLS) places accountants and auditors in the same category. The median annual wage for this group was $77,250 in May 2021, compared to a median salary of $45,760 for all workers. While accountants manage day-to-day financial tasks, CPAs are trusted with larger responsibilities.

For example, Alaska requires CPAs to get 80 hours of CPE every two years, with a minimum of 20 hours per year. One of the requirements of becoming a CPA is completing 150 college credit hours. This means that you’ll likely need to spend an additional year getting those extra 30 hours completed. A CPA (Certified Public Accountant) is an accountant who has passed the CPA exam and met additional licensing requirements, which vary by state. Therefore, all CPAs are accountants, but not all accountants are CPAs.

Summary: How to Become a CPA

Lizzette Matos is a certified public accountant in New York state. She earned a bachelor of science in finance and accounting from New York University. Matos began her career at Ernst & Young, where she audited a diverse set of companies, primarily in consumer products and media and entertainment.

What Is the Average Salary of a CPA?

Postgraduate education can help you be more appealing to employers, too. You can do the Online Master’s of Accounting (iMSA), offered by the University of Illinois Urbana-Champaign on Coursera. If you’re looking to take your accounting career to the next level, a CPA designation may be what you need. CPA licensure is the gold standard in the profession and can lead to increased earning potential, career mobility, and prestige. If you have a look at online accounting forums you will find countless stories of accountants who have succeeded in their career without a CPA.

With two of the more common financial roles—a financial advisor and an accountant—it helps to understand what each can do for your money. An accounting assistant performs accounting work but does not carry the direct title of “accountant.” Fortunately, working in this role can create a pathway to working as an accountant. Each certification lasts for a different period, and some require annual renewal. If you’re ready to kick off your journey, you can do so by launching a side hustle or small enterprise tailored to your passions.

Becoming a CPA

In doing so, they are likely to become CPAs, which qualifies them to perform the public accounting work that is limited, by law, only to those who’ve obtained CPA licensure. To acquire certification, CPA candidates need at least a bachelor’s degree and the equivalent of 150 semester hours of college credit. One year of relevant professional experience in academia, government, private industry, or public practice is also a common standard.

Examples include bookkeeping, accounts payable, and accounts receivable. Most small businesses may never need to file SEC-audited or reviewed financial statements, so your job prospects in small how to prepare an adjusted trial balance business environments can still be excellent even without the CPA credential. However, public companies must produce audited statements by law—hence the name Certified Public Accountant.

For those wondering how to become a CPA, the process begins with a bachelor’s degree, culminating with a CPA license. Candidates must first pass a challenging four-section test known as the Uniform CPA Examination. Accounting.com is committed to delivering content that is objective and actionable. To that end, we have built a network of industry professionals across higher education to review our content and ensure we are providing the most helpful information to our readers. Only CPAs are legally able to file these reports with the SEC, according to the BLS.

A CPA credential may even open doors to a different sort of career in the future, such as teaching at a college, financial planning, or running a non-profit. While you can be an accountant without a CPA, the credential can make possible a host of opportunities for you as a young professional. According to the US Bureau of Labor Statistics, accountants and auditors who have earned their CPAs have the best prospects in the industry. Generally, getting your CPA will set you up for greater success in your career, fast track you to a higher salary, a well-respected position, and more specialized accounting work.

So, while you won’t always need a CPA, understanding that there are times when you will need one is important for all small business owners. As valuable as a CPA can be for certain situations, there are also times when an accountant is the better choice. There are times when deciding between a CPA and an accountant can be tough. At other times, the decision is simple, such as under the following circumstances. In some cases, the differences are insignificant, while in other cases, those differences are of vital importance to your business.

CPA vs Accountant: Which Is Better?

The difference between state requirements for obtaining the CPA credential can be considerable. For instance, some states only require one year of work experience while others require two. Regardless of their line of work, all CPAs are held to a strict code of ethics by the American Institute of Certified Public Accountants, state boards of accountancy, state CPA societies, and other regulatory agencies. This code of ethics requires serving the public interest, integrity, objectivity, and taking due care when providing professional services.

It’s possible to complete this in five years, although some students take longer because they are getting a Master’s degree and/or more work experience. Additionally, some states require that students have a year of full-time work experience before they can receive their CPA license, which may add to the total time you need to account for. CPA requirements vary by state, but in most cases, CPAs must meet strenuous educational requirements, pass a qualifying exam and demonstrate at least two years of public accounting experience.