Choosing to become a Certified Public Accountant–or a CPA–is a great way to invest in your future. Beyond achieving your college degree, becoming licensed as a CPA can open doors of opportunity for you. It can improve your earning potential and give you an advantage over other professionals that don’t have this designation. A CPA designation signals to an employer that you have reached a level of expertise beyond the traditional accountant. Whether they work in public accounting or in private industry, CPAs are highly sought after as business advisors which represent professionalism, expertise, and trust in their respective fields.
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Getting your CPA license requires a significant commitment of time on your part. You will need to have a college degree, sit for the exam, complete a test in ethics, and satisfy the appropriate work experience requirement. If you are just starting your college degree, you can expect to spend between five and seven years completing all education and exam requirements. Since CPAs are licensed in the state or jurisdiction that intend to work in, the license requirements may be different. Read on to find out how you can become a certified public accountant.
Where to License as a CPA
In the United States, there are 55 jurisdictions that license CPAs. In addition to the fifty states, you can become licensed in Washington D.C., the US Virgin Islands, Guam, Puerto Rico, and the Northern Mariana Islands. The CPA exam itself is uniform, meaning that it is the same regardless of where you take it. However, the requirements for becoming a CPA vary between jurisdictions. There are different rules that govern;
- The types of college-level courses that are required
- The total credit hours needed
- When you can take the exam
- The amount and type of professional experience that you are required to have before becoming licensed
To successfully pursue licensure as a CPA, it’s helpful to know which jurisdiction that you plan to become licensed in.
Required Education for the CPA Exam
After you’ve decided where you plan to become licensed as a CPA, your next step is to complete your educational requirements.
Bachelor’s Degree: While states may vary on the specifics of your courses, most jurisdictions require that you get a Bachelor’s Degree with at least 120 credit hours. Further, the jurisdiction may require that your Bachelor’s Degree be in either accounting or business.
If you are planning to sit for the CPA exam, it is important that you understand which courses your state requires you to take. Knowing this ahead of time and planning out your classes can help you pick the appropriate courses to satisfy your education requirement. This can help to prevent you from taking classes that you don’t need, but also ensure that you take the ones that you do need. As part of the credit hour requirements, your state may require that at least 24 to 33 credit hours come from accounting, taxation, and audit courses. You may also be required to take at least 30 credit hours in business-related courses. Some states, however, do not have a requirement to take a minimum number of business classes.
Additional 30 Credit Hours: With the exception of the U.S. Virgin Islands, every jurisdiction in the US requires that you take an additional 30 credit hours above what is required for a Bachelor’s Degree. While they may have varying requirements as to which courses you are required to take to satisfy the additional 30 hours, you can expect that they will be a mix of upper-level accounting and business courses. Many colleges offer blended five-year programs that allow you to earn both your Bachelor’s and Master’s Degree while achieving the 150-hour requirement. If your school does not offer such a program, you can consider getting a Master’s Degree elsewhere. While you may also take an additional 30 credit hours without pursuing a degree, you should consider the value that a Master’s Degree could have on your future career as a CPA. It may be worth taking a few extra courses to complete your Master’s Degree, which is a great complement to a CPA license, as opposed to focusing solely on completing the 30-hour requirement.
Jurisdictions can also have different rules that govern when you can actually sit for the exam. While just about every jurisdiction requires CPA-exam candidates to have completed 150 credit hours, most only allow you to sit for the exam after you’ve completed this requirement. However, other states allow a candidate to take the CPA exam after they have completed the initial 120 credit hour requirement. A few states will even allow you to sit for the exam before completing the 120 hours, as long as you are close to graduating. Regardless of what the jurisdiction allows you to have completed when you sit for the exam, you must satisfy the 150 credit hour requirement before you can apply for a CPA license.
Studying for the CPA Exam
Studying for the CPA exam is no easy task. Some schools will build in CPA review courses into their curriculum, which can save you time in preparing for the exam. In addition, there are many CPA exam study resources available. These include review courses which can be taken online or in a classroom setting. These can span several weeks or months, depending upon the program you select. You can also purchase flashcards or books that have sample multiple-choice questions that cover the topics you are likely to see on the exam. Many of these features are also available online. You may also consider joining a CPA-exam review group where you can work with other candidates who are pursuing their CPA license.
Obtaining your CPA license requires a significant investment of time on your part. When you are preparing to take the CPA exam, be sure to set yourself up for success. Give yourself enough time to study. Once you start taking the exam, you only have 18 months to complete all sections once you’ve passed your first one. If you don’t successfully pass all four within the specified time, you will be required to retake those sections that exceeded the 18-month time limit.
How to Take the CPA Exam
It’s a good idea to apply to take the exam while you are studying as the approval process can take some time. There are several steps that you must go through to apply to sit for the exam, which may vary by jurisdiction. However, the general process includes the following;
- Ensure that you have met all requirements in the state that you plan to be licensed in
- Visit the National Association of State Boards of Accountancy, or NASBA, here. If you know which state you are looking to take the exam in and have satisfied the basic requirements, make sure that you thoroughly understand the application process as it can vary. In some cases, you will submit your application directly to NASBA. For other states, such as Florida, you will submit your application to their board of accountancy. Once they have reviewed your application, they will forward this to NASBA.
- Complete the application and submit all documents that are required
- Pay the required application fee
Once you’ve gone through all of the steps above and your application has been approved, you will receive a Notice to Schedule, or NTS, from NASBA. When you receive your NTS, you can now begin scheduling yourself to take sections of the CPA exam.
A word about your NTS. Be sure to verify that your name is spelled correctly and agrees with your identification. If it does not match, take care of getting this fixed as quickly as possible. You may be turned away on exam day if the name isn’t exactly the same.
Scheduling the CPA Exam
The CPA exam is administered in testing locations throughout the United States. To schedule your examination, visit the Prometrics website.
The CPA Exam consists of four parts with varying formats. The exam includes;
- Business Environments and Concepts – multiple-choice questions and three written essays
- Auditing and Attestation – multiple-choice questions and simulated tasks
- Financial Accounting and Reporting – multiple-choice questions and simulated tasks
- Regulation – multiple-choice questions and simulated tasks
You will have a maximum of four hours to complete each section. Each section is offered at different times throughout the year, so it’s important to coordinate your study schedule with the section that you are planning to take.
Exams are administered during testing windows throughout the year. According to the American Institute of Public Accountants, or the AICPA, the testing windows are as follows:
- Q1 – January 1 – March 10
- Q2 – April 1 – June 10
- Q3 – July 1 – September 10
- Q4 – October 1 – December 10
When scheduling your exam, it is best to do this soon after receiving your NTS. If your exam day is canceled due to bad weather, you may still have enough time to reschedule and not miss the window. You can take up to four different sections of the exam in each window, however, you cannot repeat the same one. So, if you don’t receive the minimum passing score of 75, you’ll need to retake that section in another window.
A word about scheduling to take the exam. You must pass all four sections of the exam within 18 months. If you don’t pass with a minimum score of 75, you will be required to retake any section with a score that is older than 18 months.
Best Practices for Taking the CPA Exam
Taking the CPA exam is stressful. Between completing your education and studying, you’ve spent years preparing for it. There are a few best practices that you can follow that can help to keep the stress level down on exam day.
Know where the test facility is located – If this is in an area that you aren’t used to, take a drive out there to make sure you know where to find it.
Arrive early – If you are driving to the facility, give yourself enough time to get there. Traffic or bad weather can hinder your drive.
Bring Identification and your NTS – If you do not have your NTS, you will not be able to take the exam. Also, the name on your NTS must match exactly what is on your identification. If it doesn’t, you may not be permitted to sit. If you see a discrepancy, be sure to get it fixed ahead of the exam.
In addition to the above, be sure to get plenty of rest and eat before you take the exam. Food and drinks are not allowed in the exam room.
Completing State Requirements for CPA Licensure
After successfully passing all four sections of the CPA exam, the next step is to meet the licensing requirements for your jurisdiction. Besides passing the AICPA ethics exam, most states require that you have relevant work experience. This can range from 6 months to 2 years, depending upon the state. In addition, states may also require you to have certain types of experience, such as working directly under a supervisor or completing one year in auditing.
Applying and Pay CPA License Fee
Once you have completed all of the steps required, you can now apply for a CPA license in your state. In addition to submitting all of the documents requested and completed application form, you will also need to send in the license fee, which varies by state.
While the road to becoming a CPA may seem like a long one, it can have a powerful impact on your professional career. Beyond the traditional accounting role, it can position you for opportunities in leadership, management, and operations. With the respect that a CPA designation brings, it tells employers and colleagues alike that you have a high level of expertise and are a trusted professional. Finally, it can increase your earning potential and give you an advantage over other professionals. Once you’ve become licensed as a CPA, you’ll see that the benefit will far outweigh the investment.