Companies and organizations of all sizes need accountants to prepare and maintain financial documents. As accountants make a significant impact on their employers' success, organizations seek out professionals with education, experience, and expertise in their field. This means that employers pursue certified public accountants (CPAs) to fill many of these open positions.

In the United States, certified public accountants earn licenses from their home states. Each state's requirements for licensure vary slightly but include passing the American Institute of Certified Public Accountant's (AICPA) uniform certified public accountant exam.

Accountants may decide to become certified public accountants for different reasons. First, many positions require this license, so non-certified accountants have fewer job opportunities. Also, certified public accountants' salaries exceed the earnings of non-licensed professionals. Use the information in this guide to learn more about what a CPA is, how to become a certified public accountant, and how gaining this valuable license can launch or enhance your accounting career.

Why Become a Certified Public Accountant?

Professionals in all fields earn certifications and licenses, and accountants are no different. Certified public accountants enjoy increased salaries, greater job security, and more respect in the accounting field. The five benefits below represent just a few that certified public accountants may receive. Keep in mind that if you also possess relevant experience and/or an advanced degree, you may receive additional/enhanced benefits once you become a CPA.

  • Better Salary: Certified public accountant salaries are typically higher than those earned by non-certified workers. The salary increase that most CPAs receive covers all costs associated with the licensure process in less than a year.
  • Additional Job Opportunities: Most top accounting careers require that applicants become certified public accountants. By passing the certification exam and earning licensure in your home state, you can apply to a variety of open positions that match your education and experience level. Also, 49 states allow CPAs to transfer their licenses, meaning you can explore job opportunities throughout the United States.
  • Job Security: In economic recessions, the least skilled and experienced professionals often experience layoffs. Becoming a certified public accountant acts as an insurance policy against a recession. Also, as financial regulations and laws continue to change, organizations should need CPAs to interpret these changes and ensure that their businesses maintain regulatory compliance.
  • Credibility: Certified public accountants are typically well-educated, well-trained, and ethical accounting professionals. As a result, organizations value their input and trust their judgment. Credibility often leads to increased responsibilities, allowing you to gain promotions faster than other accountants who are not CPAs.
  • Working Abroad: Multinational corporations require the expertise of certified public accountants. Once you gain licensure, you can pursue international career opportunities. Keep in mind that these positions may have other application requirements, including speaking a second language fluently or having a background in a foreign country's financial laws and regulations.

Understanding the Certified Public Accountant Exam

The certified public accountant exam requires you to possess an advanced knowledge base and skill set. Continue reading to learn essential information about the exam's requirements to apply, its format, and scoring methodology.

Frequently Asked Questions for the Certified Public Accountant Exam

  • What Does a Public Accountant Do? As the name implies, public accountants can offer their services to the general public (e.g., individuals) and organizations (e.g., companies). They offer advice and perform tasks related to taxes, forensic accounting, and budgeting, among other responsibilities. A certified public accountant holds a license from their state, which shows they possess expert-level knowledge and adhere to high ethical standards.
  • When is the CPA Administered? You can take the CPA during four annual testing windows: January 1-March 10, April 1-June 10, July 1-September 10, and October 1-December 10. You can complete different portions of the CPA in different testing windows.
  • Where Can I Take the CPA Exam? You can take the CPA exam at a Prometric testing center, but you do not have to take all four portions of the CPA exam at the same testing center.
  • How is the CPA Exam Taken? The CPA exam has four sections that cover different topics. You take one section at a time and can complete the sections in any order you wish.
  • How Often Can I Take the CPA Exam? If you should fail a section, you cannot retake that section until the next testing window. However, you can still attempt other test sections in the same testing window.

Fulfilling the CPA Exam Requirements

As you prepare for the CPA exam, keep in mind the licensure requirements set by AICPA and your home state. Like other professional certifications, certified public accountants must meet educational, citizenship, age, and experience requirements. Use this section as a checklist to ensure you qualify to sit for the CPA exam.

Educational Requirements

Depending on the state where you live, you may need to earn 120-150 postsecondary credits. If you live in a state that requires 120 credits, you must earn a bachelor's degree. You will also need a master's degree if you live in a state that requires 150 credits. While you do not need to hold a bachelor's degree in accounting or finance, you should possess either a minor in accounting or at least 24 credits related to accounting or a similar field. Please contact your state board to learn more about the latest educational requirements to become a certified public accountant.

 

Citizenship Qualification

As of the writing of this article, only four states -- Hawaii, Louisiana, North Carolina, and Alabama -- allow non-U.S. citizens to sit for the CPA exam. Even in those four states, CPA candidates must still reside in the U.S. legally.

 

Social Security Identification

In the 46 states that require CPA candidates to possess U.S. citizenship, you must provide your Social Security number to AICPA and your state's licensing board. However, when you take the test, you do not need to bring your Social Security card -- only the number.

 

Age Restrictions

Only adults 18 years and older may become certified public accountants. This restriction rarely impacts test takers due to other requirements.

 

Work Experience Requirements

As many accounting jobs only accept applications from certified public accountants, AICPA does not require candidates to possess work experience. However, candidates should start planning for their careers well before taking the CPA exam.

 

Exam Composition and Timing

The certified public accountant exam includes four sections that test takers attempt during different test sessions. Breaking up the test over multiple days can prevent fatigue and allows test takers to do their best. Use the following chart to create a study plan well in advance of test day.

Auditing and Attestation (AUD)

Questions:

  • Multiple-choice Questions: 72
  • Task-based Simulations: 8
  • Written Communication: 0

Time Allotment: 240 minutes

Topics Tested and Allocation:

  • Professional responsibilities, ethics, and general principles (15-25%)
  • Assessing risk and developing a planned response (20-30%)
  • Performing further procedures and obtaining evidence (30-40%)
  • Forming conclusions and reporting (15-25%)

Financial Accounting and Reporting (FAR)

Questions:

  • Multiple-choice Questions: 66
  • Task-based Simulations: 8
  • Written Communication: 0

Time Allotment: 240 minutes

Topics Tested and Allocation:

  • Standard-setting, conceptual framework, and financial reporting (25-35%)
  • Financial statement accounts (30-40%)
  • Transactions (20-30%)
  • Local and state governments (5-15%)

Regulation (REG)

Questions:

  • Multiple-choice Questions: 76
  • Task-based Simulations: 8
  • Written Communication: 0

Time Allotment: 240 minutes

Topics Tested and Allocation:

  • Professional responsibilities, ethics, and federal tax procedures (10-20%)
  • Business law (10-20%)
  • Property transaction federal taxation (12-22%)
  • Individual federal taxation (15-25%)
  • Entity federal taxation (28-38%)

Business Environment and Concepts (BEC)

Questions:

  • Multiple-choice Questions: 62
  • Task-based Simulations: 4
  • Written Communication: 3

Time Allotment: 240 minutes

Topics Tested and Allocation:

  • Corporate governance (17-27%)
  • Economic concepts and analysis (17-27%)
  • Financial management (11-21%)
  • Information technology (15-25%)
  • Operations management (15-25%)

 

Registration and Fees for the CPA Exam

Once you fulfill all requirements to take the certified public accountant exam, you can start the registration process. This section covers the steps you must complete to register and pay for the exam.

Registering for the CPA Exam

  • How to Register - Submit college transcripts to your state board of accountancy. Your state then grants an authorization to test (ATT). You submit your ATT to the National Association of State Boards of Accountancy (NASBA), which provides a notice to schedule (NTS). You then use your NTS to set up exam dates with Prometric.
  • What is Needed for Registration - You will need college transcripts, an ATT, and an NTS to register for the certified public accountant exam. On test day, bring your NTS and government identification to the Prometric test center you selected.
  • When to Register - Once you have an NTS, you have six months to set up your first test date with Prometric. However, make sure to choose test dates well in advance, as spots often fill up quickly.

Paying for the CPA Exam

Paying for the CPA exam involves multiple fees that you do not pay all at once. To obtain an ATT, you pay a fee to your state board of accountancy. Once you receive an ATT, you pay separate fees to NASBA for each part of the CPA exam. All agencies involved in the CPA exam process accept credit card payments through online portals.


Scoring the Certified Public Accountant Exam

Before you start studying for the certified public accountant exam, you should understand the exam's scoring system. The following bullet points feature answers to common CPA exam questions.

  • What Score Do You Need to Pass the CPA Exam? You need to earn 75 points on each portion of the certified public accountant exam. Each portion awards 0-99 points. However, not all questions influence your final score in the same way.
  • How Does CPA Exam Scoring Work? The CPA exam uses a weighted scoring system. All multiple-choice questions have a 50% weight. On the business environment and concepts portion, written communication questions have a 15% weight. Finally, correctly answering a difficult question awards more points than correctly answering an easier question.
  • Who Scores the CPA Exam? For task-based simulation and written communication questions, you provide short answers. Expert graders read and score your replies. Computers grade your answers to multiple-choice questions.
  • When Are CPA Exam Scores Released? You receive your scores at the end of the testing window. As a result, you may have to wait up to 90 days before viewing scores on your NASBA profile page.

After the Exam: Maintaining Your CPA Certification

Each state's board of accountancy sets requirements for maintaining your CPA certification. These requirements typically include completing professional development or continuing education hours in accounting and professional ethics.

 

Preparing for the CPA Exam

There are many ways to prepare for the CPA exam, including taking a preparation course and consulting with CPA-certified professionals. Reviewing the following tips and resources can help you pass on the first try.

 

Top 10 Tips for Exam Preparation

  1. Create a Study Plan: You can find 30-, 60-, and 90-day study plans online. Once you select a study plan that fits your needs and schedule, stick to it.
  2. Select a Distraction-free Study Spot: For your study plan to succeed, you need to find a study area that's free of distractions. Consider converting a basement or garage into a small office space where you can keep your study materials.
  3. Take Breaks: Even after earning your degree, becoming a certified public accountant can take months to achieve. To avoid burnout, build 5-10-minute breaks into every 30 minutes of studying.
  4. Take a Day Off: Even if you take breaks during your study sessions, a rigorous study schedule can take its toll on your attitude. Take at least one day off each week so you can reconnect with your friends, family, and hobbies.
  5. Meditate: Passing the certified public accountant exam can sometimes feel like an impossible task. When doubt arises, use a meditation app or exercise to center yourself. Once you feel calm, continue studying.
  6. Plan Ahead: Because you can spread the certified public accountant exam over many months, compare your calendar to upcoming exam dates. This way, you can avoid specific dates when you may feel stress from other responsibilities.
  7. Take Practice Exams: Practice exams provide you with valuable feedback concerning your academic strengths and weaknesses. Based on your practice results, you can develop a personalized study plan to avoid wasting time by covering material you already know.
  8. Take a Preparation Course: If you find it challenging to study on your own, consider taking an exam preparation course. Depending on where you live, you may have the option to take an in-person course.
  9. Plan Rewards: For each of the four exam portions, plan a reward (e.g., eating out, going to the movies) for after you leave the exam center. Visualizing a positive, upcoming experience can help you feel less stressed during the exam.
  10. Affirm Your Goals: Every test taker begins to wonder if passing the certified public accountant exam is worth it. If you should feel this way, affirm your goals by writing down your reasons for becoming a CPA.

 

CPA Practice Exams and Study Resources

In addition to following the tips in the previous section, you should consult outside resources. The internet boasts a wealth of test preparation resources, including additional CPA practice exams and forums where test takers can compare study strategies. Use the following websites to uncover materials that can help a professional like you to pass the certified public accountant exam.

  • American Institute of Certified Public Accountants: As AICPA creates the certified public accountant exam, you should visit its site before consulting any other resources. AICPA members receive valuable benefits, including professional development courses.
  • National Association of State Boards of Accountancy: CPA candidates can sign up and pay for the CPA exam through NASBA's website. The association publishes the latest information on how to become a certified public accountant and maintain your license.
  • CPA Accounting Institute for Success: This institute provides excellent exam preparation resources, including links to some of the best online courses and software. Visitors can read the latest software and course reviews on the site's blog.
  • CPA Exam Guy: This website offers visitors links to and discounts on popular certified public accountant exam preparation courses. A blog includes articles on how to transfer your CPA between states, among other topics.
  • CPA Exam Candidates Forum: CPA exam candidates with a Facebook profile can collaborate with over 4,800 other forum members. NASBA moderates the forum so that visitors receive only accurate information.

Expert Advice: Exam Tips and Being a CPA-certified Accountant

Gary Milkwick, CPA/PFS, is currently the chief product officer at 1-800Accountant. Gary was previously employed by PricewaterhouseCoopers (PwC), where he performed work for several Fortune 500 clients. He also worked at an accounting firm located in Atlanta, Georgia, that provides tax and consulting services to small business owners. Gary has made appearances on ABC, NBC, Fox Business, and Bloomberg Radio as an expert on the taxation of small businesses and small business owners.

He has also been quoted in the New York Post, New York Daily News, Crain's New York Business, and CNBC.com. Gary earned a bachelor of science in accounting and a master of accountancy from Brigham Young University, as well as an MBA in finance from The Anderson School of Management at the University of California, Los Angeles. He is a licensed CPA with the personal financial specialist designation in New York and Georgia, and he holds a real estate broker license in California.


Why did you choose to study accounting? Was it something you were always interested in studying?

My father was an accountant and worked at a regional CPA firm when I was in middle school. One summer, he hired me as a "barely paid" intern, and before long, I was doing data entry and bank recs. I began getting jobs with his clients doing data entry during high school to the envy of all my friends working retail and fast food jobs.

I began college studying computer science, but I wasn't excited about the idea of spending hours coding in a back room. I liked accounting, and I decided that even if I didn't want to do it forever, it would be a great intro to business in general. Fortunately, I was correct!

Can you describe your experience preparing for and taking the CPA exam? What advice would you give to students preparing for the exam?

I took the CPA exam back in the days when you took all four parts at once and had to pass at least two parts to get credit for anything. I didn't want to have to deal with the CPA exam after graduation, so I studied for the exam while I was in school. Fortunately, I passed all four parts on the first attempt, so I was done a month or so before I graduated from college.

I would advise students preparing for the exam to try and take at least one part before you graduate or just after you graduate. You are already in "study mode," and I've seen far too many of my friends and employees struggle studying for the exam years after graduation. The people I know who have taken the exam in school or immediately after school seem to perform well and not be as stressed out as those who wait. In addition, the longer you wait, the more life events happen -- getting married, having children, assisting sick family members -- these types of events place additional demands on your time that can make studying even more difficult.

Can you explain the personal financial specialist designation of your CPA license? Why did you pursue this designation?

The personal financial specialist designation is a credential offered by AICPA for financial planning and wealth management. Over the years, I had referred a lot of people to "financial planners" who were basically salespeople with limited understanding of actual financial planning, and my clients and I were often disappointed with the results.

I decided to get more into complete financial planning, which included individual and corporate tax planning, along with helping business owners to create diversified portfolios of assets rather than keeping nearly 100% of their wealth tied up in their businesses. I definitely don't have a desire to pick stocks or put people into risky assets; I help them pick mutual funds that will help them reach their retirement objectives.

What advice would you give to students considering earning a degree in accounting?

A degree in accounting is a great place to start any career in business. When I was in business school, the investment banks loved to hire CPAs or students with accounting undergraduate degrees and accounting experience. The colleagues I worked with just out of undergrad at PwC are doing all sorts of things now as CFOs at publicly held companies, partners at accounting firms, highly successful entrepreneurs, and investment bankers. A couple of people I know even became marketers after going back to business school!

Accounting is a great foundation for anything you do in the business world. In addition, there is significant demand for accounting students coming out of school and for accountants in general, so you'll always have a job.

What advice would you give to students who are trying to decide whether to earn an accounting degree online or on campus?

There are pros and cons to both online and on-campus study. Online study allows you more flexibility, which makes it much easier to hold a job while you're in school. I worked full time for most of the time I was in school, so I wish online study would have been more of an option at the time. On the other hand, online study requires a high level of self-motivation -- not having a set time to attend class requires you to be consistent and may not be for you if you tend to procrastinate.

Being on campus allows you to form in-person relationships, which have been very useful in my career. In fact, I own a business with a former college classmate and often bounce questions off of other classmates about how they conduct certain aspects of their businesses. When it comes to learning the actual class material, I think both methods can be very effective. It simply depends on your situation and the personality that is best for you.

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