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Certified Public Accountant (CPA) Certification Information

Written by AnonymousJuly 29, 2011
Accountant

If you’re looking to improve your career in accounting, obtaining an accounting certificate is an excellent first step. Accounting certifications can expand your accounting knowledge and increase your proficiency in a specific area of the accounting field.

Introduction to Certified Public Accountant Certification

Certified Public Accountant (CPA) is a designation granted by individual state boards but regulated, to an extent, by the American Institute of Certified Public Accountants (AICPA). This prestigious title can open the door to employment opportunities in both the public and private sectors, with CPAs able to operate in virtually any area of financing. A CPA’s main function is to provide assurance services, also known as financial audit services. This entails confirming the fairness and accuracy of disclosures and making sure clients’ financial statements adhere to generally accepted accounting principles.

Aside from the prestige associated with it, a CPA designation allows for considerable upward mobility in accounting. Certain positions in the profession are restricted exclusively to certified individuals. For example, in most U.S. states, only licensed CPAs can provide attestation and auditing opinions on financial statements to the public. CPAs can also hold such high-powered positions as Chief Financial Officer (CFO), finance manager, and Chief Executive Officer (CEO). 

CPAs still don’t have the ability to practice outside their home state without facing additional licensing requirements and fees. Until a uniform system of statewide certification is adopted, be sure to research the regulations and requirements concerning practice mobility in your home state as well as any state in which you wish to provide services.

Key Steps to Certified Public Accountant Certification

To be eligible for certification, you must adhere to a number of state requirements, known as the Three Es — Education, Examination, and Experience:

  • Education: The education requirement is usually fulfilled as part of the requirement for taking the Uniform Certified Public Accountant Examination. Though it varies by state, this requirement typically consists of earning a U.S. Bachelor’s degree with a specific amount of completed credit hours in accounting and business administration plus one year of additional study. The AICPA recommends that states require 150 hours of college credit to qualify for taking the CPA examination and the majority of states have adopted this rule. 
  • Experience: As with the education requirement, specifications about receiving certification versus receiving your license vary by state when it comes to work experience. Some states don’t require work experience for a CPA certificate, but do require it for a license to practice. Other states, such as Colorado and Massachusetts, waive the work experience requirement for individuals with a higher academic qualification than a Bachelor’s degree. Most states require work experience to qualify for a CPA certificate.
  • Examination: The examination requirement is the Uniform CPA exam, which is set by the AICPA and administered by the National Association of State Boards of Accountancy. An ethics examination has been added to CPA status requirements in more than 40 states. The majority of these states will accept the AICPA’s self-study course, Professional Ethics for CPAs or another course in professional ethics.

The order in which you’re required to fulfill the requirements varies by state — some states have you become certified first by passing the exam, and then require you to complete a specific amount of work experience, after which you can become officially licensed. Other states grant certification and licensing at the same time, after you pass the exam and meet the work experience requirement. Be sure to research the specificities of the state in which you wish to become certified and licensed.

In many states, the CPA designation is reserved exclusively for those who’ve received certification in that state. As a result, if you decide to practice in another state, you’re restricted from identifying as a CPA until you’ve obtained a license or certification from the state in question.

Details of the Uniform Certified Public Accountant Examination

Passing the Uniform Certified Public Accountant Examination is a requirement for CPA designation. The exam tests your knowledge of national auditing and accounting standards, the Uniform Commercial Code, and the Internal Revenue Code.  The test takes 14-hours and 60 percent of the content is dedicated to multiple-choice questions, with the rest of the test comprised of questions about a series of condensed case studies (simulations) designed to measure your analysis, judgment, communication, and research skills. Topics covered include

  • Auditing and attestation
  • Financial accounting and reporting
  • Regulation
  • Business environment and concepts

As of 2011, the fee to sit for all four sections of the exam is typically between $550 and $850, depending on the state. 

If you’ve already taken a section of the Uniform CPA Exam, you’re considered to be a reexamination applicant, which means that you face a simpler registration process than first-time candidates and a decreased examination fee.

Maintaining the Certified Public Accountant Designation

CPAs are required to take continuing education courses — generally amounting to 120 hours of continuing education every three years, with a minimum of 20 hours completed each year. This requirement can be met through

  • Attending a live seminar
  • Viewing a webcast seminar 
  • Self-study using textbooks, videos, or online courses

If you choose to meet the continuing education requirement through self-study, please note that you need to pass a test in order to receive credit.

In most U.S. states, if you’ve passed the Uniform Certified Public Accountant Examination but haven’t fulfilled the work experience or completed the continuing professional education requirements, you’re permitted the designation CPA Inactive, but can’t identify as an actual CPA.

Governing Board Information

CPA status is granted by individual state boards, not by the American Institute of Certified Public Accountants (AICPA), though the AICPA does serve as a regulatory entity for CPAs. CPAs can choose to join the AICPA, which requires that applicants hold a valid CPA certificate or license.

The AICPA can be reached at

The American Institute of Certified Public Accountants (AICPA)
1211 Avenue of the Americas
New York, NY 10036
212.596.6200
www.aicpa.org

In addition, CPAs have the option of joining their local state association or professional society, membership of which include considerable discounts on continuing education seminars and a wealth of informational resources pertinent to CPAs.

Membership to a state or national CPA organization can allow for additional confidence from clients and employers, who know that all members of these groups adhere to a professional code of conduct consistent with being an ethical and trustworthy CPA.

Don’t think that you’re restricted to joining only one state’s CPA society — many CPAs who live near state borders are members of multiple states’ CPA societies.