What is a Certified Public Accountant (CPA)?

 

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In essence, a Certified Public Accountant can be best described as a licensed professional that provides accounting, tax, auditing, financial planning and management consulting services. 

 

 

The CPA designation is well regarded and is seen as a sign of high professional competence. It indicates a soundness in depth, breadth and quality of accountancy knowledge. Certified Public Accountants are responsible for providing advice about finances to organizations, businesses and individuals in order to achieve their financial goals. Although all certified public accountants can be classified as accountants, not all accountants can be classified as certified public accountants. In addition, certified public accountants provide services like tax preparations, management counseling and operational and financial audits.

 

Related Read: Top Seven Situations that Call for a Certified Public Accountant. 

Educational Requirements of a CPA 

The career and educational requirements of a certified are planned out in the following steps:

  1. Bachelor’s degree in Business Administration or Accounting

  2. Master’s degree in Business Administration with major concentration on Accounting or a Master’s degree in Accounting

  3. Sitting for a uniform Certified Public Accountancy exam

  4. Acquire experience in the field through internships and part-time work

 

Further Reading: Top Nine Accounting Degrees You Can Pursue For a Successful Career

 

 

 

Scope of a Certified Public Accountant

A certified public accountant is not just limited to financial and auditing related services. Here are few of the broad areas where certified public accountants can work in, helping businesses in many ways.

Financial and Tax Planning

Certified Public Accountants can help companies and individuals with acquisitions, mergers, taxes, investments, financial planning and much more.

International Accounting

Another area where the demand of certified public accountants is increasing drastically is the niche that caters to international accounting. A CPA with the mastery and understanding of international trade regulations and laws has a high demand than someone who is not up-to-date with today’s global economy.

Environmental Accounting

A lot of resources nowadays are focusing on the environmental issues of the world. In this scenario, the certified public accountants are required to design preventive systems and conduct audits to ensure compliance and cater to environmental wellbeing.

Forensic or Investigative Accounting

Forensic accounting is often referred to as fraud auditing or investigative accounting. In this specific area, the certified public accountants are required to seek out and search evidences for criminal misconducts and dig deeper into accounting records to investigate fraud or plagiarism.

Information Technology Related Services

Due to extreme growth in the field of information technology, there are a large number of opportunities for certified public accountants who hold strong computing skills to implement and design advanced systems for filling the needs of an organization.

 

 

 

Consultation Services

Certified public accountants are needed by government agencies, nonprofit organizations, financial institutions, businesses and even individuals to help them by offering objective and subjective assistance and advice in both strategic and financial areas.

Assurance Services

A certified public accountant helps public companies with traditional audit services and examining yearly corporate reports of public companies. In addition, the experience of a certified public accountant has increased demands in the niche of assurance as well. 

 

To know even more services a CPA can provide please read: What Services can a Certified Public Accountant Provide?

 

Official Road to Becoming a Certified Public Accountant

Educational requirements are not just enough. In order to become a certified public accountant, you also have to take the following official steps for being able to professionally launch your career:

 

 

Certification and Licenses

In order to professionally pursue a career as a CPA, all candidates have to meet the requirements of their respective states they want to practice in, as well as pass an exam at a national level. Only after completion of the defined steps are they granted a license by their respective State Board of Accountancy. Moreover, the American Institute of Certified Public Accountants requires that all candidates have to appear for the Uniform Certified Public Accountancy Examination.

In the US, almost all states, as well as the District of Columbia, require all students to complete at least 150 hours of coursework in college and 30 hours or more of professional work in order to be certified. Only the states of Vermont, New Hampshire, Colorado and California do not ask for semester coursework.

 

Related Reading: Uniform Accountancy Act Criteria for CPAs Licensure

 

Uniform Certified Public Accountancy Examination

Uniform CPA exam is a computer-based exam that consists of the following four sections:

  • Regulation

  • Financial Reporting and Accounting

  • Business Concepts and Environments

  • Attestation and Auditing

The entire exam is based on written communication, simulation and multiple choice Q&As, and out of a scale of 0 to 99, you only pass if you score more than 75. The exam is offered throughout the country at different testing centers in two months per quarter.

Wiley CPAexcel Exam Review Study Guidesare the best way exam review guides out there. It arms test-takers with detailed outlines, study guidelines, and skill-building problems to help candidates identify, focus on, and master the specific topics that need the most work.

  • The most effective system available to prepare for the CPA exam—proven for nearly forty years
  • Timely, up-to-the-minute coverage for the computerized exam. Contains all current AICPA content requirements
  • Unique modular format—helps you zero in on areas that need work, organize your study program, and concentrate your efforts
  • Comprehensive questions—over 3,800 multiple-choice questions and their solutions in the four volumes. Covers the new simulation-style problems. Includes over 280 simulations
  • Complete sample exam all four modules
  • Guidelines, pointers, and tips—show you how to build knowledge in a logical and reinforcing way

See below for the best guides for each module.

Regulation - Wiley CPAexcel Exam Review 2015 Study Guide (January): Regulation (Wiley Cpa Exam Review)

Financial Reporting and Accounting - Wiley CPAexcel Exam Review 2015 Study Guide (January): Financial Accounting and Reporting (Wiley Cpa Exam Review)

Business Concepts and Environments - Wiley CPAexcel Exam Review 2015 Study Guide (January): Business Environment and Concepts (Wiley Cpa Exam Review)

Attestation and Auditing - Wiley CPAexcel Exam Review 2015 Study Guide (January): Auditing and Attestation (Wiley Cpa Exam Review)

 

Passing the CPA exam

Although many people take the CPA exam very lightly, the real case is otherwise. The exam is extremely rigorous for less than half of the candidates who appear for the exam pass the test in one go. It is required that all test candidates have to pass the four parts within eighteen months of passing the first part.

To get the best shot at passing the Uniform Public Accountancy Examination we recommend

This book does only give you tips on how to structure your learning but also the motivation needed to pass the examination.

 

Find out more about the Uniform Accountancy Act by reading Why is there a Need for a "Uniform Accountancy Act"

  

Continuing Professional Education

The education doesn't stop once you have become a CPA. CPA's need continually educate themselves through something called the CPE. CPE stands for Continuing Professional Education.  To provide value adding professional services and maintain their technical and professional aptitude...

CPE is a crucial requirement for CPAs. Along with the ethics, rules and regulations of their accounting membership body, it's very important that CPAs comply with all applicable CPE requirements.

Learn more by reading: What is Continuing Professional Education for CPA's?

 

 

Technical Accounting Experience 

The quest to becoming a certified public accountant is not complete until you have completed an experience of one to two years under a certified public accountant with an active and valid license. Moreover, you also need to complete a part-time or summer internship at an accounting or business firm in order to earn experience.

Average Income of a CPA

When a survey for salary was carried out by the National Association of Colleges and Employers, it was found out that a CPA holding a bachelor’s degree in accounting earned an average of $50,000 yearly whereas a CPA holding a master’s degree in accounting earned around $75,000 annually. In addition to their average salaries, most auditors and accountants earned the standard benefits, including paid annual leaves, life and health insurance. However, an accountant with a senior-high level earned additional benefits.

Related Read: Top Factors that affect Certified Public Accountant Salaries

What Environment Do CPAs Work In?

Certified Public Accountants can usually be found in indoor environments, with a home office or either a well-lit corporate building. You will find an average accountant sitting behind a desk with a computer conducting audits and preparing tax papers and financial audits. Certified public accountants are known to enjoy a multitude of tasks and challenges at their work environment and they welcome the professionalism that comes along with being bonded and certified.

CPAs' In USA

In the United States, a CPA is referred to as a Certified Public Accountant but in other parts of the world such as Australia they can be referred to as Certified Professional Accountants. Regardless of which part of the world they are from, CPA's need to obtain a qualification and maintain their ongoing license by continuing education (CPE) courses in order to stay abreast of changes in their profession.

In the United States, to become a CPA, an accountant must take and pass a series of rigorous tests administered by the American Institute of Certified Public Accountants (AICPA), as well as meet additional state education and experience requirements for certification as a CPA.

In addition, Certified Public Accountants have stringent professional ethical conduct governed again by the American Institute of Certified Public Accountants . A Certified Public Accountant must be qualified including passing the Uniform CPA Examination.

A CPA in one state may be allowed to practice in another state if a reciprocal agreements exists. Find out more by reading about interstate arrangements here.

In Australia, for Certified Professional Accountants, the qualifications and ethical conduct is governed by CPA Australia.

An important thing to remember is that while a CPA is always an accountant, not all accountants are CPAs. Click here to learn why you should use a CPA.

You can also check out the services offered by Certified Public Accountants here.

 

 

  

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