CPA, or Certified Public Accountant, is one of the most prestigious and important careers available to accountants. Although it is a challenging endeavor that requires a lot of effort, it eventually leads to many advancement opportunities in accounting. Accountants must pass a tough test to become a CPA, verifying their taxation, auditing, and financial analysis competence.
A Certified Public Accountant (CPA) is a professional and licensed designation given to qualified accountants. The Board of Accountancy in each state issues these licenses. And The American Institute of Certified Public Accountants (AICPA) provides all the relevant information on how to get your CPA license.
An aspirant must meet specific qualifications to become a CPA. The first criteria are obtaining a bachelor’s degree in accounting, finance, or business administration, 150 hours of study, two years of experience, and passing the Uniform CPA Exam. Certified Public Accountants are proficient in four main areas of accounting: taxation, auditing, financial analysis, and regulations.
Let’s break down the prerequisites for novices to comprehend how to become a CPA. There are generally four requirements. They are:
- Extra Requisites
Accounting professionals with a CPA certification have the knowledge and expertise to meet the highest financial and ethical standards. A total of 150 hours of appropriate coursework is mandatory for the education requirement. An aspirant needs to select from a list of compulsory courses. The courses include auditing, financial accounting, taxation, management accounting, and a professional ethics course specifically designed for Certified Public Accountants. After completing all of the prerequisites, you must start your preparation while considering the CPA schedule. The 2022 CPA exam schedule has a lot to cover. Including how to schedule your CPA exam in the first place, learning about testing facilities, when to expect your results, retesting, and which exam portion to take first.
Another path for education is passing the Graduate Management Admission Test (GMAT) with a minimum of 620 and holding a bachelor’s degree in accounting with at least 30 hours.
The level of professional experience differs from state to state. However, a minimum of twelve months of paid or unpaid professional accounting experience is mandatory. The duration of experience required varies depending on the level of education. If your credit hours exceed the required 150 hours, the Accountancy Board might reduce the experience duration. It is best to inquire about the experience requirement from the concerned Accountancy Board.
The Board of Accountancy in each state organizes the exam. That is where the aspirant has met all of the educational and work experience criteria. The only hurdle between the candidate and the CPA license is the Uniform CPA Exam. Once you apply for the test, you must pass all four test sections. It is a four-hour test and can be taken in any order. The four-section are given below:
- Auditing and Attestation (AUD): This section checks the candidate’s auditing and assurance skills. This section is based on audit processes, reviews, and the AICPA code of professional conduct.
- Business Environment and Concepts (BEC): It is a broad look at the business environment. It includes cost and management accounting, micro and macroeconomics, and information systems.
- Financial Accounting and Reporting (FAR): This test covers all the Generally Accepted Accounting Principles (GAAP), financial statements, IFRS standards, and financial reporting.
- Regulation (REG): This section does not have any accounting topics. It mainly focuses on taxation, business law, and ethics.
The required score in each section is 75 out of 99. The questions are either based on multiple choices or situation-based tasks. Because of the weighted scoring system, the aspirant will receive a greater score for the task-based simulation questions and a lower score for multiple-choice questions. Your written communication will also be tested in the Business Environment and Concept section.
Some states in the US require the completion of extra courses or tests. To qualify for a CPA license in some states, the candidate must also pass the CPA professional ethics exam.
You can apply for the license once you have completed all of the prerequisites. It necessitates the payment of a fee and the demonstration of compliance with all regulations.
A Certified Public Accountant is both a financial counselor and an accounting specialist. In his function as a CPA, he may work with businesses, major commercial enterprises, or individuals. If an employer needs an accountant, they will almost certainly engage a Certified Public Accountant. When it comes to making challenging financial decisions, most businesses turn to Certified Public Accountants for assistance. As a result, there is a greater demand for CPAs.
CPAs often make $50,000 to $150,000 per year. It is a lot of money, but it also necessitates a rigorous schedule for a CPA to earn such a high salary.
To summarize the piece, the aspirant must prepare well and ensure that they truly desire to become a Certified Public Accountant. If you’ve determined that accounting is your passion, begin working on this order: A bachelor’s degree in accounting, relevant experience, and test preparation and passing is required.