Certified Public Accountant (CPA) Certification
| Brit Brogaard Modified on May 5, 2022
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Certified public accountant (CPA) certification confirms an accountant's skills in taxation, auditing, regulatory compliance, and financial analysis. Many employers prefer to hire accountants who possess CPA certification. By attaining a CPA license, accountants can boost their career outlook, job security, and earning potential.
The American Institute of Certified Public Accountants (AICPA), the National Association of State Boards of Accountancy (NASBA), and Prometric serve as the national regulatory body of the CPA exam. However, each U.S. jurisdiction maintains its own certified public accountant requirements.
Why Get a CPA Certification?
- Establish National Credibility
- The CPA designation indicates an accountant's proficiency in the four main areas of accounting: taxation, auditing, financial analysis, and regulation. This credential shows a firm understanding of the highest professional and ethical accounting standards.
- Most Employers Hire Only CPAs
- The CPA credential is the only officially approved licensing credential in accounting and auditing. Accordingly, most employers hire only accountants and auditors that hold a CPA certification.
- Boost Earning Potential and Job Prospects
- In an ever-evolving business world, organizations increasingly turn to CPAs for help with critical financial decisions. This increased demand CPA role typically entails greater job prospects and higher salaries
What Are the Certified Public Accountant Requirements?
The 55 certification-granting U.S. jurisdictions, including the 50 states, Washington D.C., Puerto Rico, Guam, the Virgin Islands, and the Mariana Islands, maintain specific CPA requirements. However, across all 55 jurisdictions, CPA certification requires obtaining 150 college credits and passing the Uniform CPA Examination®.
Additional CPA prerequisites vary across jurisdictions, including age and residency requirements, ethics exams, and the number and type of accounting-specific credits. Credit requirements to sit for the CPA exam also differ by district. Some jurisdictions provide provisional CPA exam approval to candidates with 120 college credits but only issue certification once candidates complete all 150 credits.
Educational CPA Requirements
Becoming a CPA requires 150 college credits, including 30 credits in accounting and 24 in business administration. At least 15 credits must be at the upper-division or graduate level. A typical bachelor's degree comprises only 120 credits, leaving each candidate to earn 30 additional credits after earning their bachelor's-level credentials.
An aspiring CPA can earn the additional 30 credits by completing a master's degree or a graduate certificate. The number and type of accounting-specific credits required to become a CPA vary by jurisdiction. Examples of qualifying courses include taxation, auditing, and managerial accounting.
- Read about certificate programs in accounting
- Read about bachelor's degree programs in accounting
- Read about master's degree programs in accounting
Professional CPA Requirements
Professional CPA requirements also vary across jurisdictions. Many jurisdictions require a minimum of 12 months, or 2,000 hours, of paid or unpaid public accounting experience, working with an accountant who holds a valid CPA license in a U.S. jurisdiction.
CPA candidates typically obtain professional accounting experience in government accounting departments or businesses. However, working in academia may satisfy some or all of the professional CPA requirements in some areas.
What Does the Certified Accountant Exam Cover?
The CPA exam comprises four sections: regulation (REG), financial accounting and reporting (FAR), auditing and attestation (AUD), and business environment and concepts (BEC). Test-takers receive four hours per exam section.
Each section includes five subsections, also known as testlets. All testlets feature 62-76 multiple-choice questions (MCQ) and 4-8 task-based simulations (TBS), case studies that assess real-world accounting competencies.
The BEC section has three written communication tasks (WCT). These tasks require each test-taker to write a professional document on a specific business scenario. The table below summarizes the CPA exam structure.
CPA Exam Structure
|REG||Testlet 1: 38 MCQ | Testlet 2: 38 MCQ | Testlet 3: 2 TBS | Testlet 4: 3 TBS | Testlet 5: 3 TBS||76 MCQ | 8 TBS||4 hours|
|FAR||Testlet 1: 33 MCQ | Testlet 2: 33 MCQ | Testlet 3: 2 TBS | Testlet 4: 3 TBS | Testlet 5: 3 TBS||66 MCQ | 8 TBS||4 hours|
|AUD||Testlet 1: 36 MCQ | Testlet 2: 36 MCQ | Testlet 3: 2 TBS | Testlet 4: 3 TBS | Testlet 5: 3 TBS||72 MCQ | 8 TBS||4 hours|
|BEC||Testlet 1: 31 MCQ | Testlet 2: 31 MCQ | Testlet 3: 2 TBS | Testlet 4: 2 TBS | Testlet 5: 3 WCT||62 MCQ | 4 TBS | 3 WCT||4 hours|
Test-takers cannot use their notes for exam questions, but for the task-based simulations, they can access authoritative literature. These materials include tax code in the REG section, the Financial Accounting Standards Board's accounting standard codification in the FAR section, and parts of the AICPA professional standards in the AUD section.
Candidates can schedule and complete the four sections in any order at an authorized Prometric test center in one of the 55 U.S. jurisdictions and at select international locations. Test-takers complete different exam questions drawn from a pool of test questions.
Scoring the Exam
To pass the CPA exam, test-takers must score a minimum of 75 on a scale from 0-99 on each section. However, the four sections are weighted differently. The percentages in the table below detail each subsection's weight.
CPA Weighted Exam Scoring
|Section||MCQ Weight||TBS Weight||WCT Weight||Total Weight|
Each type of exam question applies different scoring models. The multiple-choice questions use a scoring system that assigns questions at different difficulty levels to testers in the second testlet, depending on their scores on the first testlet.
The first testlet always offers questions at a medium difficulty level. If a test-taker scores well on the first testlet, the second testlet involves questions at a high difficulty level. By contrast, if a test-taker scores poorly on the first testlet, the second testlet would then contain questions at a medium difficulty level.
The test software grades the MCQ portions automatically. Members of the AICPA Board of Examiners score the TBS and WCT sections. Exam results release on a rolling basis.
How Do You Register for the CPA Exam?
Most accounting jurisdictions require CPAs to meet certain minimum age and residency requirements. U.S. residents can determine their eligibility by consulting NASBA guidelines, along with their particular jurisdictions. Non-residents can determine their eligibility by visiting NASBA's international evaluation services.
Aspiring CPAs should apply for the CPA exam and submit the required verification documentation through NASBA's CPA central portal. Verified applicants receive a notice of schedule (NTS), which allows them to schedule their exam section through Prometric. The NTS expires after six months.
The AICPA administers the four sections of the CPA exam on a rolling basis throughout the year. Verified candidates must pass the four sections within 18 months of verification. Some jurisdictions also require passing an ethics exam.
Test-takers can retake individual test sections throughout the year, so long as it is within the 18-month window. After receiving their test scores, candidates must wait 24 hours to reapply for the same section.
Paying for the Exam
The cost of taking the CPA exam depends on the specific jurisdiction. For example, Florida charges a $170 application fee, $75 registration fee, and $226.15 examination fee for each section.
All fees are non-refundable, except under extenuating circumstances. You must pay the application, registration, and examination fees each time you retake an exam section. Consult your particular board of accountancy for expense details.
How Can You Prepare for the CPA Exam?
The best way to prepare for the CPA exam is to start studying early. The CPA Accounting Institute for Success recommends preparing for 300-400 total hours for the exam. Below, we list five tips that can help you set yourself up for success.
- Make a Study Schedule
- Start preparing well ahead of your exam date. To stay focused, create a consistent schedule that specifies when and where you will study for the exam. Make the necessary arrangements to free up time for studying, such as hiring babysitters or requesting time off from work.
- Familiarize Yourself With the Exam Format
- The CPA exam uses a fixed format with a set number of testlets and question formats. Familiarizing yourself with question formats in each of the five testlets of the four sections can help you know what to expect when you take the actual exam sections.
- Take Practice Tests
- You can access free practice tests and sample exam questions online. Taking practice tests can boost your test-taking skills, familiarize you with the exam structure, and help you apply key accounting and business concepts.
- Know Your Strengths and Weaknesses
- After each practice test, record your scores for each question format. If you notice a pattern, divide the question formats according to your strengths and weaknesses. Set aside extra time to practice the areas you find more challenging.
- Research and Apply Difficult Concepts
- Make a list of particularly difficult concepts and research each topic thoroughly. Apply these concepts to real-life scenarios to boost your scores on the TBS and WCT testlets.
Practice Exams and Study Resources
The AICPA's CPA booklet offers in-depth resources for aspiring CPAs, including details about prerequisites, how to apply, exam scoring, and test structure.
Becker offers access to CPA exam prep materials at several tiers. This company offers unlimited practice tests, personalized review sessions, and detailed proficiency metrics. Some employers cover their employees' enrollment costs.
This AICPA guide offers video tutorials demonstrating CPA test software functions, along with sample tests in all four exam sections. The site also offers answers to frequently asked questions about the sample tests.
This resource, featured on the Missouri Society of Certified Public Accountants website, provides 140 formerly used multiple-choice questions.
Professional Insights from Gary Milkwick: How to Get CPA Certified
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 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 they graduate or right after they graduate. You are already in "study mode," and I've seen far too many of my friends and employees struggle to study 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. 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 the 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. Financial planning also includes helping business owners 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 undergraduate accounting 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.
Some of these responses have been edited for brevity and clarity.
What Is Needed to Maintain CPA Certification?
Most jurisdictions require CPAs to renew their licenses every three years. In most districts, CPAs must complete at least 120 hours of board-approved continuing education before certification renewal. Some jurisdictions also require each CPA to complete an ethics course within each renewal cycle.
Should You Get Multiple Certifications?
Many CPAs aim to boost their job prospects and earning potential by pursuing additional certifications. Popular designations include:
- Certified Internal Auditor: CPAs who specialize in auditing can also consider earning CIA certification. The Institute of Internal Auditors confers this CIA credential. The CIA designation conveys that an accountant meets the highest professional and ethical standards in internal auditing.
- Chartered Financial Analyst: CPAs specializing in investment management can advance their careers by pursuing CFA credentials. The CFA Institute awards this designation. The CFA charter designation testifies to strong competencies in financial analysis, investment management, and securities regulation.
- Certified Management Accountant: CPAs seeking C-suite roles can consider CMA certification, awarded by the Institute of Management Accountants. This credential demonstrates that an accountant possesses the knowledge and skills required to perform executive-level responsibilities.
- Learn how to earn a CIA certification
- Learn how to earn a CFA certification
- Learn how to earn a CMA certification
Common Questions About the CPA License
Is CPA a degree or certification?CPA — a term used for both the certification and those who hold the credential — is the only officially approved certification qualification in accounting and auditing in the U.S. Becoming a CPA typically requires 150 college credits and approximately 2,000 hours of accounting experience working with a licensed CPA professional.
Is it hard to get CPA certified?The difficulty of the CPA certification process depends on your accounting skills and exam prep. Pass rates for the four exam sections, as of 2021, range from about 50-63%.
What are the CPA testing windows?The CPA testing windows are 18 months. Once you are verified for the CPA exam, you must pass all four sections of the exam within that testing window.
How often can you take the CPA exam?The AICPA administers the four sections of the CPA exam on a rolling basis throughout the year. You must pass all four parts of the test in an 18-month period. Within those 18 months, there are several windows to retake tests, but you cannot retake a section in the same window. After receiving your test scores, you must wait 24 hours to reapply for the same section.
Lizzette Matos is a certified public accountant in New York state. She earned a bachelor of science in finance and accounting from New York University. Matos began her career at Ernst & Young, where she audited a diverse set of companies, primarily in consumer products and media and entertainment.
She has worked in the private industry as an accountant for law firms and ITOCHU Corporation, an international conglomerate that manages over 20 subsidiaries and affiliates. Matos stays up to date on changes in the accounting industry through educational courses.
Lizzette Matos is a paid member of the Red Ventures Education freelance review network.
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