How to become a CPA?

With the booming business culture, the demand for Certified Public Accountants is skyrocketing. As per the BLS, the projected employment growth rate for accountants and auditors is 6% meaning almost 136,400 job openings every year, for this decade.

With demand comes competition among aspirants, as well. Interestingly, there are around 1,099,751 accountants (BLS) that are working in the USA, and out of those, only 665,612 (NASBA) hold active CPA status in the USA. This pictures the competition scenario.

So, you should aim for a certification like a CPA, to leap above the competition and flourish your career as an accountant.

To help you understand the dynamics better, here we are with this article discussing about CPAs, their salary data, work environment, responsibilities, the pros, and cons, and importantly how can you become one.

What is a CPA?

A CPA, or Certified Public Accountant, is a highly respected professional designation for accountants in the USA. They are recognized for their expertise in accounting, auditing, taxation, and other financial areas

To become a CPA, you need to pass the CPA certification exam. For that, you need 150 credits hours completion from a college or university. So, either you can choose the Integrated Program, or Bachelors and Masters to achieve 150 credits.

If you wish to work for reputed companies or the Government as an Accountant, you need to have a CPA certification.

Work environment

They may work in any financial organization to create financial records and determine their financial health.

• For Government
• Non-Profits
• Large and Small Businesses
• Startups
• For Individuals  

Salary

The annual average salary of a CPA, Certified Public Accountant, is $89,000. However, if you gain experience then you can become a Senior Accountant and can earn from $100,000 to upwards.

As per BLS 2022 data, the average annual salary of Accountants and Auditors, including CPAs is $86,740 with an average Hourly wage of $41.70.

While the highest 10% of top Accountants earn upwards of $132,690 and higher. This surge is due to several factors like experience, expertise, education, and such.

Job Outlook

As per the BLS, the projected employment growth rate for accountants and auditors, including CPAs, is 6% for this decade. This means that there will be almost 136,400 job openings every year.

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Roles and Responsibilities

The CPAs perform a wide range of duties in various sectors of accounting and finance. Their responsibilities can vary depending on their specific job roles and the industries they work in.

Here are some common duties of CPAs –

Financial Statement Auditing

They examine financial statements to ensure accuracy and compliance with accounting standards. They verify the completeness and fairness of financial information for businesses, organizations, and government agencies. This is especially important in public accounting firms.

Taxation

They prepare and review tax returns for individuals, businesses, and entities. They also provide tax planning and advisory services to help clients minimize tax liabilities while complying with tax laws and regulations.

Financial Reporting  

They assist in the preparation and presentation of financial reports, including income statements, balance sheets, and cash flow statements. They may also prepare footnotes and disclosures for financial statements.

Advisory Services

Many CPAs offer consulting and advisory services to clients. They provide financial analysis, budgeting, forecasting, and strategic planning to help clients make informed business decisions.

Internal Auditing

In corporate environments, CPAs may work as internal auditors. They assess the internal controls and processes of organizations to identify weaknesses, fraud, or inefficiencies and make recommendations for improvement.

Management Accounting

CPAs in management accounting roles help organizations make decisions by providing cost analysis, budgeting, and performance measurement information. They work closely with management teams to improve operational efficiency.

Financial Planning

They may also provide financial planning services to help individuals and families plan for their financial future. This includes retirement planning, estate planning, investment strategies, and risk management.

Compliance and Regulatory Reporting

CPAs ensure that organizations adhere to various regulatory requirements, such as the Sarbanes-Oxley Act for publicly traded companies or industry-specific regulations in sectors like healthcare or finance.

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How to become a CPA?

If you wish to get certified as an accountant, then getting certified as a CPA is your bet. With certification or licensure, you become eligible to work for reputed companies or the Government.

In this step-by-step guide, we will try to help you understand how can you become a CPA –

Step 1 – Meet the Requisites

The first step is to check the required requisites to sit for the exam.

First, you need to have acquired 150 credit hours of education in a college or university, with at least 30 hours in accounting subjects. This means, post your Bachelor’s degree, you need to acquire a Master’s degree as well.

After that, you need to gain 1-2 years of accounting experience, in any organization. Post your Master’s or Bachelor’s, you are eligible for the entry-level or mid-level roles.

You meeting these 2 requirements, would make you eligible to apply for the certification exam.

Step 2 – Register for CPA exam conducted by AICPA

After you meet the eligibility, you can apply for the CPA exam conducted by AICPA (American Institute of Certified Public Accountants), online in the NASBA (National Association of State Boards of Accountancy) CPA Portal, with all the required documentation.

Post-verification you’ll receive a scheduling notice of your exam which is valid for 6 months only.

Step 3 – Locate the Closest Testing Center, and Schedule the Exam

After you get the NTS, notice to schedule, you need to check the exam center that is suitable to you and schedule your CPA exam accordingly through the Prometric portal online.

Step 4 – Prepare and take the CPA exam

Now, you need to prepare for the exam and revise well the topics like – auditing, taxation, accounting, etc.

Before taking the exam, you need to know about it. The exam consists of four sections – Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, and Regulation.

Exam Time Limit

After your scheduled exam, if you clear the first section then there is a strict 30-month time limit to pass your remaining 3 sections. 

On failure, you need to reappear all the respective sections of the CPA exam.

How to Pass?

To pass the CPA exam, you need to score a minimum of 75 on each section.

Remember, the pass rate for the CPA exam is less around 45%, meaning out of 100 only 45 aspirants pass the exam. So, preparations need to be smarter.

Step 5 – Take the Ethics exam

Passing the CPA exam is not sufficient to get the licensure, you also need to pass the CPA ethics exam. However, this depends on the state board to take on the AIPCA’s or State Board’s version of the exam.

You shouldn’t feel discouraged, because the test is very easy.

Step 6 – Explore Career Opportunities

So, you have cleared the CPA exam, and the ethics exam as well. Now, you can go explore career opportunities.

But make sure to craft your resume well and try to maintain a network with potential employers or employees working in reputed organizations.

CPA certification vs. CPA license

You must have wondered about the terms ‘Certification’ and ‘License’ attached to a Certified Public Accountant. In most cases and most states they both are the same, but in some they both are different.

In the US, each of the 55 states has its own CPA rules and NASBA has categorized the states into tier-1 and tier-2 states depending on the rules.

The tier-1 states, the majority of US states, refer the both terms as same. This means, if you have passed the CPA exam, you are certified and you hold a license as well.  

In the tier-2 states, both terms are different. This means, that even if you have passed the CPA exam you are not guaranteed a CPA license.

In those states, you first need to get your certification and then undergo some 1-year experience in the field of accounting, and then apply for licensure.

According to NASBA, only seven states are two-tier states – Alabama, Connecticut, Hawaii, Illinois, Kansas, Nebraska, and Oklahoma.

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Pros and Cons of becoming a CPA

Becoming a Certified Public Accountant (CPA) is a significant career milestone with both advantages and challenges. But like any profession, it comes with its own set of advantages and disadvantages.

Here are some of the key advantages and disadvantages of being a CPA –

Pros of Being a CPA

Let’s explore the pros of being an accountant –

Increased Earning Potential

After becoming a CPA, you can often earn better salaries. The designation can lead to higher income levels, especially as you gain experience and advance in your career.

With certification, you can expect to earn at least $10,000 more per year compared to the ones without it.  

As per BLS 2022 data, the average annual salary of Accountants and Auditors, including CPAs is $86,740 with an average Hourly wage of $41.70.

While the highest 10% of top Accountants earn upwards of $132,690 and higher. This surge is due to several factors like experience, expertise, education, and such.

Benefits and Incentives

The CPA designation is recognized and respected internationally, which can lead to global career opportunities.

Achieving CPA status often comes with benefits such as access to professional networks, resources, and opportunities for advancement.

Job Opportunities

A CPA designation opens a wide range of career opportunities in accounting, finance, and related fields. They are in high demand and can work in various industries and roles.

Becoming a CPA allows you to specialize in areas such as auditing, taxation, forensic accounting, management accounting, and more, allowing you to follow your interests.

Job Stability

The demand for accounting professionals remains consistent, providing job security in the long term. As per the BLS, the projected employment growth rate for accountants and auditors, including CPAs, is 6% for this decade. This means that there will be almost 136,400 job openings every year.

Professional Respect and Global Recognition

The CPA designation is highly respected in the business and financial world. It signifies a high level of expertise and professionalism. It is also recognized and respected internationally, which can lead to global career opportunities.

Job Flexibility

They can work in diverse industries, including public accounting firms, corporations, government agencies, non-profit organizations, and as independent consultants.

This industry variety offers flexibility in choosing work environments that align with personal interests.

Besides that, you also have the option to start your own accounting or consulting firms and gain full control over your skills and work.

Cons of Being a CPA

Let’s explore the cons of being a CPA –

Educational Requirements

Meeting the educational requirements to become a CPA can be challenging and may involve a significant time commitment, including completing a bachelor’s degree, a master’s degree, and additional coursework.

CPA Exam Difficulty

The Uniform CPA Exam is very challenging, with a low pass rate of around 45%. Passing all four sections of the exam requires dedicated study and preparation.

Education and Time Investment  

To become a CPA, you need to achieve 150 credits, for that, you need to get a Bachelor’s which typically has 120 credit hours, and then get your Master’s which typically has 30 credits.

Another requirement is having 1 to 2 years of work experience, in the field of accounting. Also, there is a 30-month time limit to pass all four sections of the CPA exam.  

So, considering an average student, you might need 6 years to get 150 credits, then 2 years of work experience, and then 2 years for preparation and clearing the CPA exam.

All of this makes it 9 to 10 years for you to become a CPA. This can be too much of a time investment for some aspirants. 

Work-Life Balance

During peak periods, such as tax season or financial reporting deadlines, CPAs may be required to work long hours, including evenings and weekends.

Meeting deadlines and ensuring accuracy in financial reporting can be stressful, especially in roles like auditing or tax accounting.

FAQs – CPA

How long does it take to Become a CPA?

To become a CPA, the most important eligibility is the college credits of 150. To achieve 150 credits, you need to get a Bachelor’s which typically has 120 credit hours, and then get your Master’s which typically has 30 credits.

Another requirement is having 1 to 2 years of work experience, in the field of accounting. Also, there is a 30-month time limit to pass all four sections of the CPA exam.  

So, considering an average student, you might need 6 years to get 150 credits, then 2 years of work experience, and then 2 years for preparation and clearing the CPA exam.

All of this makes it 9 to 10 years for you to become a CPA.  

How do you become a CPA without a master’s degree?

Yes, you can become a CPA without a Master’s degree. But you are required to achieve 150 credits. Wondering how?

There are integrated Bachelor’s degree programs that allow you to complete 150 credits thereby making you eligible to apply for the CPA exam.

Also, some states allow aspirants to take the CPA exam with just a bachelor’s degree, so do check with your desired state to take your exam.

Can I become a senior accountant without the CPA?

No.

To get promoted to a senior accountant, you must have a CPA license.

* This is for reputed firms. However, some small businesses might have different metrics to decide besides education.

Is a certain GPA required to earn the CPA?

No, there is no minimum GPA requirement.

But, with rising competition you need to be very cautious about your grades and aim for a healthier GPA; the higher the better.

How stressful is a CPA job?

A CPA is a very responsible role that involves working long hours and dealing with clients. So, naturally, the nature of the job is stressful and might also lead to burnout.

During peak periods, such as tax season or financial reporting deadlines, you may be required to work long hours, including evenings and weekends.

Also, meeting deadlines and ensuring accuracy in financial reporting can get stressful, especially in roles like auditing or tax accounting.

Is a CPA worth it?

With at least 10 years of time investment and going through all the education, going after the CPA licensure is still worth it.

We explain to you why –

You can earn up to 1 million USD per year, repeatedly.  

Even if you start your firm with some friends, and you get some high-ticket clients, that’s all, you wouldn’t even need to think about acquiring more. Some firms work for just 2 or 3 clients and still make millions of dollars.

We understand money is not everything, so let’s explore the other aspects –

• The job security it offers is amazing.
• The demand is very high with the surge in business and startup culture.
• The job is respected by all and has global recognition to it as well.
• Lastly, if you find Accounting to be hectic, you can switch careers to finance and related business fields as well, the job flexibility is amazing.

So, considering all these factors, we believe, getting a CPA is still worth it.