The number of Certified Public Accountants (CPAs) is projected to increase by 22% from 2022 to 2027 in the United States. The main reason is the rising demand for CPA services from businesses and individuals. A CPA designation can be seen as the best certification an accountant can earn. However, the CPA process is rigorous as it requires education, experience, and other specific requirements.
This comprehensive guide on “How to become a CPA” here will give you brief information about three requirements to become a CPA and help you make the process of becoming a CPA as simple as possible.
What Do CPAs Do?
A Certified Public Accountant is a financial advisor who helps clients (including individuals, businesses, and other organizations) reach their financial goals. However, not all accountants are CPAs.
They are primarily responsible for the following:
- Performing accounting tasks, such as tax preparation and financial planning
- Calculating, preparing, and filing tax returns
- Conducting financial audits
- Representing their clients before the IRS
- Ensuring clients’ financial records comply with federal, state, and local laws and regulations.
- Providing financial management for clients to improve business operations and lower tax liabilities
- Providing tax management services for clients
- Perform bookkeeping
CPAs who specialize in forensic accounting can look for evidence of crimes like the fraud of an individual or a business
See more: EA Vs. CPA: Which One Is Better For Tax Professionals?
3 Requirements To Become A CPA
“How to get a CPA certification?” is a basic question for those who want to become a CPA. All of them strive to get a CPA certification because it’ll give them a chance to have better jobs with a higher salary. However, getting a CPA certification is a rigorous process that requires education, experience, and other specific requirements. So, how to get a CPA certification?
The CPA process might take up to 7 years to complete
Meet The Educational Requirements
For those wondering how to become a CPA, they first need to meet the education requirements.
Each state sets its educational requirements for candidates to get Certified Public Accountant designation. However, most states require at least a 4-year bachelor’s degree, and candidates must earn 150 higher education credit hours.
Even though it doesn’t require a specific CPA degree, candidates should get a bachelor’s degree in accounting or something business-related because it requires them to have a minimum number of accounting and business credit hours.
For example, a California candidate seeking a Certified Public Accountant certification must have a bachelor’s degree and 150 semester credit hours of education, including 24 credit hours related to accounting and 24 credit hours related to business.
In the U.S., most bachelor’s degree programs only have 120 semester credits. To help candidates earn those extra 30 credits to meet the 150-credit requirement, many universities offer dual-degree programs that award both a bachelor’s and a master’s degree in accounting, which normally take up to five years to complete. Most importantly, candidates with master’s degrees have higher pass rates on the Certified Public Accountant exam.
See more: CPA Vs. Tax Preparer: Which Is The Best Option For Your Company?
Certifications and Licensure for Certified Public Accountants (CPA)
How to get CPA certifications and licensure? To become a CPA, you must have a license from the state licensing board where you plan to work. Certification is different from licensure. Having a CPA certification means that candidates pass the CPA exam. Now they qualify and are ready to go on the next step of the licensing procedure.
Candidates must take additional actions and hours of professional development to maintain the license
Meet The Experience and Continuing Education Requirements
Most states require candidates to have at least one to two years of working experience after obtaining a CPA certificate, plus at least 40 hours of continuing education. Some states in the U.S. might also demand candidates pass an ethics exam.
Visit CPA requirements by state gives you better preparation for the exam.
Note: Accountants who participated in internship programs in school often do not qualify for experience-based CPA requirements.
Meet Common Requirements
Age Requirements
Most states do not have a minimum age requirement to take the Certified Public Accountant Exam. The minimum age is usually 18. Candidates must be 21 years old in New York and Missouri to be eligible for a CPA license.
Residency Requirements
Most states enable nonresidents to take the CPA Exam, while some states require candidates must be a minimum 6-month residency.
Ethic Requirements
While many states only require candidates to pass the AICPA ethics test, some require a specific ethic test to their jurisdiction.
5 Steps To Become A CPA
Step 1: Earn a Bachelor’s Degree & Gain Experience
Requirements for the CPA process vary by state. Candidates must have a bachelor’s degree with 120 credit hours of study to become a CPA. As mentioned above, candidates still need a minimum of credit hours in accounting, auditing, taxation, and business-related courses. That’s why they will be beneficial if they have a bachelor’s degree in accounting, finance, or a business-related field.
Most states also require a minimum of two years of working experience in a role related to the accounting field under the direct supervision of a licensed CPA.
Step 2: Pass the AICPA’s Uniform CPA Exam and Ethics Exam
Candidates must know the minimum requirements to adapt to be eligible for the CPA exam, which is to pass the AICPA’s Uniform CPA examination and Ethics examination. For your information, AICPA stands for American Institute of Certified Public Accountants, which is the national company of Certified Public Accountants in the U.S.
Note: You must apply for the AICPA’s Uniform CPA Examination through NASBA’s website to take the CPA exam.
CPA Exam Format
The CPA exam has four sections. Each section takes four hours to complete. Candidates have 18 months to pass, all with a minimum score of 75.
- Auditing and Attestation (AUD)
- Business Environment and Concepts (BEC)
- Financial Accounting and Reporting (FAR)
- Regulation (REG)
Note: The CPA exam score can be transferred to another participating board of accountancy.
Getting a CPA certificate differs in each state. These differences may include education, licensure and certification, experience and continuing education requirements, and other common requirements such as residency, age, or ethics requirements.
When candidates pass the CPA examination, they will get a CPA certificate.
See more: How Much Does A CPA Cost? Tax Preparation For Business Owners
Step 3: Obtain And Maintain CPA Licensure
When candidates pass the Uniform CPA and Ethics exams, the final step is applying for the license. To maintain a CPA license, CPAs must pay a licensing fee — of $50 to $150 for most states. Certified Public Accountants must prove they have completed approximately 40 hours of CPE (Continuing Professional Education) per year.
Why Should I Become a Certified Public Accountant Instead of a Non-Certified Accountant?
Below are some reasons to choose between a CPA and a Non-Certified Accountant.
Higher Salary
While a Non-Certified Accountant earns a median salary of $62,000, a Certified Public Accountant earns 10-15% higher salary than a non-CPAs. The Certified Public Accountant’s salary ranges also depend on where they live, experience level, industry, and job seniority. That is one of the reasons why you should become a CPA, as it can pay off long-term.
Growth Potential And Career Development
CPAs must complete approximately 40 hours of CPE (Continuing Professional Education) per year. It enables them to broaden their knowledge, stay up to date with laws and regulations, and update their skills. Moreover, they can achieve a higher job position, leading to better opportunities for career growth.
Perform More Functions
While a non-CPA performs tasks such as bookkeeping, general accounting functions, and some tax-related issues, a CPA can perform audits and represent clients before the IRS.
See more: How To Become A Tax Preparer – A Complete Guide
Frequently Asked Questions
Can I Become A CPA Online?
You can become an online CPA if you can meet the education requirements and hours of online experience.
How Long Does It Take To Become A CPA?
It might take at least seven years to become a CPA.
Most states require 120-150 credit hours, which takes 4-5 years to complete. They also require at least two years of experience working in the accounting industry to get licensure and around 18 months to pass the Certified Public Accountant examination.
What Is The Minimum Qualification For CPA Licensure?
Candidates must adapt to education requirements, gain work experience in the accounting industry and pass the CPA Exam to get a CPA licensure. Regarding education, all states in the U.S. require candidates must have a degree with at least 150 credit hours of coursework. Some states allow candidates with at least 120 credit hours of study to attend the CPA exam.
This comprehensive guide has given you the steps to becoming a CPA. Becoming a CPA is rigorous; that’s why you need a CPA to handle the financial aspects of your business to take the burden off your shoulder. CPAs can help you in every stage of your business.
If you are wondering where is the best place to find the best CPA for your next tax returns, Secur Accounting Outsourced Tax Preparation Services is here to help. We have years of experience working in the industry and has helped thousands of clients deal with their problems. Feel free to contact us here, and our dedicated consultants will get back to you shortly.
Related Posts: