In today’s world, very few professions are as crucial as accounting. It plays a critical role in every sector and industry. However, with our increasing dependence on technology, digital transformation, and the implementation of stricter regulations, accounting is evolving at a breakneck speed.
Building new skills, and playing a more strategic role in business decision-making, can open new career paths for accountants. One way to accelerate this journey is for accountants to acquire a Certified Public Accountant (CPA) license.
The CPA license is administered by the American Institute of Certified Public Accountants (AICPA).
As of August 24, 2021, there are 669,130 actively licensed CPAs in the world. Now compare this to another statistic – in 2019, the U.S. alone had 1.28 million accountants and auditors, and 1.51 million bookkeeping, accounting, and auditing clerks on the payroll.
Hence, if you successfully get your CPA certification, you are among an elite group of accounting professionals and will be in a position to distinguish yourself from your accountant peers.
Difference Between Accountants and CPAs
Very often, the difference between CPAs and accountants is a cause for confusion. However, it’s pretty simple. While all CPAs are accountants, all accountants are not CPAs.
The key difference is the level of education, quality of experience, as well as potential opportunities. To become a CPA, one has to fulfill specific requirements and also pass the Uniform CPA Exam.
On receiving the certification, one’s profile is elevated, and the transition is accompanied by financial rewards and challenging job opportunities that offer a sharper growth curve. The CPA Outlook index has been rising since 2011. After a sharp fall in 2020 due to the pandemic, it has bounced back to 78 in the second quarter of 2021.
This Outlook Index is generated by combining nine factors – the U.S. economy’s optimism, organizational optimism, expansion plans, revenue expectations, profit expectations, employment expectations, tech spend plans, other capital spending plans, and training and development plans.
Opening More Doors
Every industry and sector leverages the unique skill sets of CPAs, and the certification is highly regarded. In fact, CPAs tend to be the most trusted advisors due to several reasons.
Besides having sound knowledge of the operations and financials of businesses, CPAs are also valued for their ability to offer strategic business advice, which means they play a key role in business decision-making.
The certification lends more credibility, especially from an ethical standpoint, which is important for organizations that value transparency and aim to be sustainable.
Today, CPAs play a range of roles in the industry, from chief financial officers (CFO) of Fortune 500 companies to leadership roles in public accounting firms and government agencies. For instance, the FBI recruits CPAs to investigate criminal fraud. In a digitally connected world, the role of a CPA is even more relevant.
Highly regulated sectors also value the skills of CPAs. For instance, the education and non-profit sectors leverage the skills of CPAs, as they are governed by unique regulations.
Key Skills Required by CPAs
CPAs must equip themselves with a range of skills that are required to succeed in the business world and contribute to success. These are skills that enable them to lead teams and play a leadership role at the highest echelons of business.
- Marketing/client focus and customer-centricity
- Problem-solving, analytical, and research skills
- Interpersonal and team-building skills
- Strong communication skills
- Savviness about emerging technologies
- High professional, ethical standards
- Project management skills
How to Become a CPA
The journey to becoming a CPA has a number of steps. However, there are three core elements to the journey – educational qualifications, examination, and work experience.
- While the exam has been developed and graded by the AICPA, whether you are eligible to sit for the exam will be determined by the state board of accountancy in each of the 55 U.S. jurisdictions. These include all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, the Commonwealth of Northern Mariana Islands, and Guam.
- To apply for the certification, you must have completed an accounting program from a recognised college or university. 150 semester hours of college coursework is recommended by the AICPA. Of these, 30 hours must be dedicated to accounting subjects, 24 hours for business administration subjects, and at least 15 hours at the graduate level.
- You’ll need to apply to sit for the Uniform CPA Examination through the NASBA’s CPA Central portal. You’ll receive your Notice to Schedule (NTS) once your application is verified. Be sure to schedule your CPA exam within the next six months, or you’ll need to apply again.
- The core subjects of the Uniform CPA Examination are Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).
- You have a time frame of 18 months to pass all four exams with a minimum score of 75.
- Since the CPA Exam is administered throughout the year, aspirants have the flexibility to take the test at their convenience.
- With regards to work experience, there is a specific requirement. Candidates must have a minimum of one year of experience, i.e. approximately 2,000 hours, and a licensed CPA must verify this experience. The spectrum of expertise must span the length and breadth of accounting, attestation, auditing, and taxation.
Passing the Test
On successfully passing the CPA Exam, the AICPA issues a CPA certificate. However, it’s important to understand that this does not give one a license to practice.
Every state has its own rules and regulations, which may require additional educational qualifications and professional work experience. That’s what makes earning a CPA such a big deal.
Additionally, you must find out if your jurisdiction requires you to take a separate ethics examination before applying for your license.
It’s also necessary to understand that not every CPA has made it on the first attempt. Sometimes certain factors come in the way. However, you can try again, plan better and be more strategic towards your goal of becoming a CPA.
The Journey Does Not End Here
The CPA path does not end with practitioners getting a license. CPAs must continue pursuing their professional education by taking courses annually to continue retaining their license every year.
This practice ensures that CPAs continue to invest in skill and knowledge building and remain relevant and at the cutting-edge of their industries throughout their careers.