How Hard is it to Become a CPA?

How Hard is it to Become a CPA?

How hard it is to become a CPA depends on many factors, but deciding to be a CPA can be the first step toward a rewarding accounting career. With a CPA designation, accountants can earn a higher salary than non certified accountants and have many more job opportunities.

The Certified Public Accountant is a highly educated professional in the accounting and business world. Becoming a CPA requires education, training, and a commitment to maintaining the required certification with continuing education. So, if this field interests you, keep reading the steps to become a CPA.

What is a CPA?

A CPA is an individual who completes the educational requirements to be an accountant. Then, they obtain relevant experience working as an accountant and pass the CPA certification exam. After taking the exam, a state CPA license certifies them to work for the public, sign off on attest engagements, and legally practice before the IRS.

Licensed CPAs may work in accounting firms or independently as freelance accountants. The CPA prepares tax forms, prepares financial documents, and ensures the company complies with government and company laws. They also monitor a company’s financial status and look for account discrepancies.

How Do you Become a Certified Public Accountant (CPA)?

It is not an easy task to earn a CPA license. The process requires a significant amount of training and coursework, as well as an exam. Depending on the state, you may also need to complete an internship or supervised practicum to be a licensed CPA. Below are the main requirements and steps an individual must take to become a CPA.

  1. Education: meet the education requirements. The minimum level of education for aspiring CPAs is a bachelor’s degree in accounting. You can also have a degree in a related field instead of accounting.
  2. Work Experience: to meet the work experience requirements, applicants need a minimum of one year of full time professional accounting experience.
  3. Exam: Pass all four sections of the CPA Exam (Uniform CPA Exam).
  4. Continuing Education: Meet additional state board licensing requirements in the state where you plan to practice.

CPA Educational Requirements

What are CPA education requirements? CPA education requirements vary from state to state. Generally, they require a minimum number of 150 semester hours of college coursework, including a baccalaureate degree, at least 30 semester hours of accounting, and 24 semester hours of business-related coursework.

Individuals who wish to become CPAs must have at least a bachelor’s degree in accounting. While some may pursue a master’s degree, the baccalaureate degree is the minimum educational requirement. An individual does not need an accounting degree to become a CPA. Depending on their major, they may need 18 months to an extra year to complete the 150 credit requirements.

To be eligible to take the CPA exam, the candidate must complete 150 credits, and 30 of those credits should be college graduate credits. So a master’s degree can also count for these credits. Some colleges offer a 5-year bachelor’s or master’s degree combination program that satisfies the CPA requirements. Each state has its requirements regarding the credits and exams. This state-specific information is on the American Institute of Certified Accountants website.

What are CPA Experience Requirements?

The exact CPA experience requirements vary by jurisdiction. Generally, candidates must have at least one year of professional experience in accounting, auditing, or a related field. The candidate’s employer must verify the relevant work experience requirements. And they must be obtained after the candidate has their CPA license. Many jurisdictions also require that candidates have at least two years of public accounting experience.

What are the CPA Exam Requirements?

Candidates must also pass the Uniform CPA Examination to become a CPA. The American Institute of Certified Public Accountants (AICPA) administers this exam. There is an application fee and the CPA exam is four parts. In addition, most states require CPA candidates to complete an ethics exam or ethics course and have valid professional experience.

To pass the CPA exam and earn the credential of CPA, applicants must pass all sections. However, the candidate does not need to pass all four exams at one time. But they must complete all of them within 18 months of the date they took the first test. However, if they wish, applicants can take the parts in a short period of time. For example, an international candidate may arrange to take the sections close together if they need to travel for the exam.

CPA candidates have four and a half hours to complete each section. Each of the four sections has multiple choice questions and task based simulations. Additionally, the CPA exam uses a testing process known as multistage testing (MST).

What’s on the CPA Exam?

Test takers must earn a 75 or higher on each section to pass the CPA exam. The four exam portions cover a wide range of accounting topics. The Auditing and Attestation (AUD) section covers financial accounting and reporting, the FASB framework, statement preparation, US GAAP rules, and also IFRS rules.

The Business Environment and Concepts (BEC) section is a comprehensive section on business. It covers microeconomics, cost accounting, macroeconomics, information systems, technology, and management. The Financial Accounting and Reporting (FAR) section is the most challenging. And finally, the Regulation (REG) section focuses on business law, ethics, and the taxation of businesses. The exam sections cover the following areas.

CPA Exam SectionsMultiple Choice QuestionsTask-based Simulations
Auditing and Attestation (AUD)728
Business Environment and Concepts (BEC)624
Financial Accounting and Reporting (FAR)668
Regulation (REG)768
Exam sections for CPA licenses.

Each section of the CPA exam includes five smaller parts. Each CPA exam section has multiple-choice questions and task-based simulations. Students must also complete three written communication tasks and correctly answer one research question. Each test is different regarding the number of each type of question or task. More information about out how to sit for the exam is on the NASBA website.

CPA Exam Review

An exam review is integral to preparing for the Certified Public Accountant (CPA) exam. The review process typically involves studying the material from the AICPA’s official CPA Exam Blueprints, taking practice exams, and studying the material from review courses.

Many accounting professionals take a CPA review course to prepare for exam day. These classes provide study materials, additional guidance, and support to help individuals prepare for the exam. Additionally, students may use exam review software programs to help them practice and prepare for the exam. And some websites offer students a free guide for exam review.

A CPA Exam review can be a great way to help you prepare for the CPA Exam. Two things many candidates do for a successful test day are to create a study schedule and arrive at the testing center early. Taking the CPA exam is difficult. So most candidates start studying early and dedicate 5 hours of study each week to prepare.

Continuing Education for CPAs

CPAs must complete continuing education courses to main their certification. Failure to complete the courses in the required time can result in the individual losing the CPA credential. The amount that each state requires can vary. Every year, the laws are changing for the financial and accounting industries. Information regarding the continuing education requirements is also on the AICPA website.

CPA Licensure

CPA licensure is the process of becoming a CPA. This process involves meeting the requirements of the state in which you will be practicing as a CPA, including completing the necessary education, passing the Uniform Certified Public Accountant Examination, and meeting any additional requirements of the state’s Board of Accountancy, such as completing continuing professional education and passing an ethics exam.

How Long Does it Take to Become a CPA?

It typically takes a minimum number of 150 credit hours of college coursework and passing the CPA exam to become a CPA. Then applicants have the 18 month period to complete the exam parts. So, depending on the individual’s educational background, completing the requirements can take four to seven years.

Can you become a CPA online? Students can earn an accounting degree online. However, the parts of the exam must be taken in person. So, while individuals can fulfill many requirements online, it is not entirely online.

What is the Job Outlook for CPAs?

The job outlook for CPAs is very positive. The US Bureau of Labor Statistics (BLS) projects that the demand for accountants and auditors, including CPAs, will grow 11 percent from 2021 to 2031, much faster than the average for all occupations. The increasing complexity of the global economy and the need for organizations to maintain accurate financial records and comply with regulations drive this growth.

What is a CPA Salary?

CPA salaries vary depending on experience, employer, location, and certification. The US Bureau of Labor Statistics (BLS) also reports that accountants earn an average annual wage of $77,250. The top 10 percent earned over $128,970, while the bottom 10 percent earned less than $47,970. But, the accountant with the CPA credential should see the best career and wage opportunities.

Is Becoming a CPA Worth it?

Yes. Becoming a CPA is a rewarding experience for those who commit to the process. A CPA license can open up many career opportunities, provide financial stability, and provide a higher income than most other professions.

Professional Organizations and Resources:

  • Association of International Certified Professional Accountants (AICPA)
  • National Society of Accountants (NSA) 
  • American Institute of CPAs (AICPA
  • Association of Government Accountants (AGA)
  • Institute of Internal Auditors (IIA)
  • Association of International Certified Professional Accountants (AICPA)
  • National Association of State Boards of Accountancy (NASBA)
  • Chartered Institute of Management Accountants (CIMA)
  • Accreditation Council for Accountancy and Taxation (ACAT)
  • Association of Government Accountants (AGA)