Certified Public Accountant: What Is A CPA?

CPAs may also be required to maintain active membership in the Association of International Certified Professional Accountants (AICPA) or similar professional organizations to qualify for renewal. While the CPA Exam is the same for all candidates, other requirements may differ by jurisdiction. The four-part exam requires a minimum score of 75 in each section, and you must pass all sections within the same 18- to 30-month window. Prospective CPAs who meet this educational requirement and other state prerequisites can start the CPA exam process through the National Association of State Boards of Accountancy (NASBA).

For many years, I worked tax year 2013 in public accounting as an auditor and consultant. I really enjoyed working on various types of projects with different clients. I worked with many different not-for-profit organizations and found that I have a passion for mission-driven organizations. Earning the CPA credential is a big time commitment, and the exam is challenging. Still, those with a CPA earn 25% more, on average, than non-CPA accountants.

Coursera’s editorial team is comprised of highly experienced professional editors, writers, and fact… You’ll also represent clients before the IRS to help them resolve their tax problems. The IRS only allows CPAs, attorneys, enrolled agents, enrolled retirement plan agents, and enrolled actuaries to represent clients directly.

1. Accountants who wish to increase their earning potential and strengthen their career prospects may benefit from CPA designation.
2. To become a licensed CPA, you must pass the CPA Exam, a four-section, 16-hour assessment.
3. One important function performed by CPAs relates to assurance services.
4. You might even work with a CPA to determine the best strategy for managing your income and withdrawals from individual retirement accounts (IRAs) and 401(k)s in retirement.
5. The CPA designation is granted by individual state boards, not the American Institute of Certified Public Accountants (AICPA).

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Typically, work experience must be approved by an active, licensed CPA. Some states also recognize postsecondary teaching experience if it specifically involves accounting courses. Job-seekers can use multiple methods to find a job, including job fairs, networking, and school career centers. Local CPA organizations sometimes hold events for current and future CPAs. These meetings can offer accounting-focused networking, including learning about career opportunities. Current students can also utilize their summers to find internships, which can improve their resumes or lead to full-time roles after graduation.

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Holding CPA licensure can boost your earning potential, meaning the time you spend fulfilling your state’s requirements and studying for the exam can lead to a positive return on investment. People who successfully pass the nonbank financial institution CPA exam and meet all other state requirements can apply for licensure. Licensed professionals must complete CPE credits and pay a renewal fee to their state’s board of accountancy. There isn’t one particular thing a CPA does because it’s not a job title or career path.

What Can CPAs Do That Accountants Cannot?

You might even work with a CPA to determine the best strategy for managing your income and withdrawals from individual retirement accounts (IRAs) and 401(k)s in retirement. Certified public accountants (CPAs) are specially licensed professionals who meet advanced practice standards. Licensed CPAs have elite technical accounting abilities, which they supplement with analytical insights, advisory services, and financial recommendations.

One important function performed by CPAs relates to assurance services. This designation allows you to certify financial statements for the SEC, represent clients before the IRS and sign off on audits. However, the CPA designation also shows you have more advanced knowledge and expertise than non-licensed accountants. All states require at least one year of accounting experience to obtain licensure. Again, you’ll want to check with your state board of accountancy to see what type of experience you’ll need, the exact amount of hours and if part-time work is accepted. All CPAs must have a bachelor’s degree and 150 semester (225 quarter) hours.

Alternatively, depending on your career path, you can focus on a wide spectrum of accounting services. A CPA is a financial professional licensed by a state board to provide accounting services to the public. A CPA performs accounting duties such as tax preparation, auditing, and consulting.

Each state sets its specific requirements for your eligibility to take the Uniform CPA Exam. Many states require you to hold a bachelor’s degree, and most require or will require 150 hours of post-high school education. Some states require CPA candidates to be at least 18 to 21 years old, and a few require that you’re a citizen or permanent resident. You can also pursue management consulting, information technology, education, and financial planning careers. While these may not seem like typical professions for accountants, many industries rely on financial expertise. Some states have additional requirements related to residency, citizenship, and/or possession of a valid Social Security number.

Also, accountants with a CPA certification tend to advance to positions of more responsibility within one to two years and often are promoted to senior-level jobs within a few years after that. Though known for their role in income tax preparation, CPAs can specialize in other areas such as auditing, bookkeeping, forensic accounting, managerial accounting, and even aspects of information technology (IT). Regardless of their employer, most CPAs compile, maintain, and review financial statements and related transactions. CPAs have a wide range of career options available in public accounting (that is, working for an accounting firm), corporate accounting (working inside a company), or government service.

To that end, we have built a network of industry professionals across higher education to review our content and ensure we are providing the most helpful information to our readers. CPAs are often the people who are called in to conduct audits — assessments of a business’s paperwork and financial statements. They can also hold chief controller or chief financial officer (CFO) positions, depending on their skill level and education. Internationally, accounting professionals with similar education and credentials are called CAs, or charted accountants.

You can be an accountant without being a Certified Public Accountant, but earning a CPA license adds a valuable credential to your resume. It means you’ve passed a nationally recognized test that has been modified to reflect your state’s regulations. It opens the way to jobs that other accountants can’t take on, such as performing audits of public companies. CPAs compile, maintain, and review financial statements and related transactions. Candidates are required to complete 150 hours of education and have no fewer than two years of public accounting experience.