If you’re thinking of becoming a CPA, you have to understand the requirements and qualifications that come with the job. According to most people who study the course in college, accounting or accountancy is one of the hardest to take, with very low passing rates and majority of students giving up within the first 2 years. Here are some more details and tips on how to become a CPA and be licensed properly.
About the CPA
CPA stands for certified public accountant. This is the title given to qualified accountants in the United States and in other countries, for individuals who have successfully passed the CPA examination, which is short for Uniform Certified Public Accountant Exam. The individuals should have also met further experience and state education requirements to certify as a CPA. People who have succeeded in the exams but have not yet gone through on-the-job training or experience or have not yet gone through continuing professional education will be tagged as CPA inactive or another equivalent title. In most states in the United States, only licensed CPAs can give attestation on financial statements and audit reports. Some exceptions include the states of Ohio, Kansas, Arizona and North Carolina.
Several states have a lower level of accountant certification, or people labeled lower than CPA. They are usually referred to as PA or public accountants. There are only around 10 states that still provide the designation. Most PAs are also members of the National Society of Public Accountants.
The CPA Exam
When becoming a CPA in the United States, you first have to pass the Uniform CPA Exam, which is given by the American Institute of Certified Public Accountants. The test is administered by the National Association of State Boards of Accountancy. The CPA was first established in law on April 17, 1896.
Individual State Boards of Accountancy will decide who are qualified to take the Uniform CPA Exam. Usually, those who have a US bachelor’s degree including a minimum number of credit hours in business administration and accounting, plus a 1 year study will be qualified for the test. The 5 year study is also called the 150 hour rule and is used by most state boards. 150 hours of study is required by 45 states.
More on Qualifications
The CPA exam might be uniform, but there are variations in the certification and licensing requirements depending on your current location. State requirements on becoming a CPA can be summarized into three parts: Education, Experience and Examination. Some states require individuals to first past the Uniform CPA, and then become licensed after they have gone through adequate work experience. This is a two-tier approach adopted by states like Illinois, Alabama, Nebraska and Florida. Some states, like Massachusetts and Colorado can waive the work experience, provided the person has higher academic qualification than the one required by the current state.