How to Become a CPA
Would you like to know how to become a CPA? The information will guide you through the education, experience, and certification necessary to become a CPA. As an CPA, you have a variety of choices about the career you'd like to pursue.
- What is a CPA?
- CPA Job Description
- Education Requirements
- CPA Certification
- State Boards of Accountancy
- Additional Skills
- Career Advancement for CPAs
- State CPA Societies
- CPA Jobs
- CPA Salary
What is a CPA?
CPA stands for certified public accountant. A CPA is an accountant who has taken and passed the Uniform Certified Public Accountant Examination, in addition to meeting the state requirements for being licensed as a CPA, which usually include education requirements, experience requirements, and ethics requirements.
CPA Job Description
As a CPA, you can work in a variety of area. These might include:
- Financial analysis - assess the stability and profitability of a project or business through financial analysis.
- Internal Auditing - provide an independent, objective review of the financial records of a business.
- Environmental Accounting - conduct compliance audits or create financial statements for internal or external review to uncover environmental costs associated with a product, process, system, or facility.
- Forensic Accounting - use your accounting skills to investigate fraud or find evidence of misconduct.
- Tax and Financial Planning - Help companies and individuals with financial planning including investment strategies, taxes, projected income, retirement, expenses, insurance, mergers, and acquisitions.
- IT Services - Provide accountancy and tax services for IT professionals and companies.
- International Accounting - work with global companies as they manage their assets worldwide and try to minimize their tax liability for the largest profits.
- Audit and Assurance - perform auditing services to make sure financial books and records are in order, review accounts receivable records, perform business risk assessments, or run information systems security reviews
- Consulting - as an accounting consultant, you may provide a variety of services to various companies or individuals.
- College or University CPA Professor - a growing need for teachers makes becoming a CPA professor an in-demand job.
CPAs perform a variety of duties, which may include:
- Auditing financial statements
- Performing compliance audits
- Reconciling transactions
- Balancing profit/loss statements
- Creating quarterly and annual financial reports
Informing decisions such as:
- capital investments
- product costing and pricing
- risk management
- process/product design
- compliance strategies
In order to receive the designation of CPA, many states require a bachelors degree. Many people choose to enroll in a business degree online, including a finance degree or accounting degree. To further your career, it is recommended that you go on to receive a Masters in Accountancy.
The American Institute of CPAs (AICPA) offers a CPA Certificate Program which covers a variety of accounting topics including auditing and attestation, business environment and concepts, financial accounting and reporting, and regulation. In order to be eligible for certification, you must meet the requirements within your individual state. For specific CPA requirements, refer to the appropriate state board of accountancy listed below. Generally, the requirements for a CPA designation include:
- 1 – 2 years experience under a CPA
- Minimum of 150 semester hours of undergraduate courswork
- Pass and complete an ethics exam
In order to maintain your certification, you must complete continuing professional education each year. Generally, this is about 40 hours of coursework.
State Boards of Accountancy
Here's a list of the State Boards of Accountancy. Refer to the state where you wish to become a CPA in order to determine the specific requirements in that state.
Additional Skills Needed to be an CPA
Technology plays a large part in your job as an CPA. Each company will likely have its own accounting software you will need to learn, Therefore, it is important to have a broad understanding on how to use technology and software, along with basic accounting principles.
Because you'll likely be working in an office environment, other skills that will help you succeed as a CPA include:
- Communication skills
- Customer service skills
- Attention to detail
- Ability to recognize errors, especially with numbers
Career Advancement in Accounting
Ideally, you can start your career in accounting by receiving a bachelors degree in accounting. This will enable you to get a job in accounting straight out of college, preferably under a CPA. In order to advance your career, you'll want to consider getting a masters of accountancy.
State CPA Societies
This is a list of state societies and associations for CPAs:
In order to get a job as a CPA, you'll need 1-2 years of experience under a CPA. To attain this experience, you'll want to begin forging relationships with CPAs early into your education. This could happen through an internship or by joining professional organizations related to accounting. Of course, we'd like to see you get your degree in accounting, since that will provide you with the ability to immediately start working as an accountant. Working as an accountant will give you access to many professionals who will help guide you in advancing your career.
One of the many questions people ask is: "How much money will I make as an CPA?" The good thing to know is, CPAs make more money than general accountants. According to the Bureau of Labor Statistics Occupational Outlook Handbook, median annual wages for accountants and auditors were $59,430 in 2008. The middle half of the occupation earned between $45,900 and $78,210. The bottom 10 percent earned less than $36,720, and the top 10 percent earned more than $102,380.
Of course, your salary as a CPA will depend on a number of things, including the state in which you are licensed, the size of the company you're working for, the number of years of experience you have, and your education level. In fact, according to a salary survey conducted by the National Association of Colleges and Employers, candidates with a masters degree in accounting received higher starting salary offers than candidates with a bachelors degree in accounting. In addition, the life-long earning potential of a masters degree is considerably higher than a bachelors.
In addition to your salary, keep in mind that you will also receive health insurance, medical insurance, life insurance, a 401(k) retirement plan, sick pay, and vacation pay. As a high-level executive for a company, you may receive additional benefits, like the use of a company car or an expense account.