CPA Certification Tips

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How Can I Become a Certified Public Accountant?

How To Become a Certified Public Accountant

To obtain an accounting license, you must complete all formal education requirements, then take and pass the uniform examination to receive CPA certification. A Bachelor's degree from an accredited institution, whether earned on campus or online, is the first important step. Previously, you would have been challenged to locate an accredited accounting degree online, but you now will have a good selection of universities offering this degree. You will need a total of around 150 credit hours of university study to be eligible to take the CPA examination.

Immediately after earning your accounting degree or after some years in public accounting, you are eligible to sit for the uniform exam, which will complete your CPA license requirements upon getting a passing grade in all four parts. Yes, there are four parts to the examination and it is quite challenging. The sections are Auditing & Attestation, Financial Accounting & Reporting (FAR), Regulation, and Business Environment & Concepts. If you have previously gathered information on the exam, you may notice different subject area titles for a couple of the parts. The switch to a computerized exam has caused this change. The overall subject matter, except for 21st century updates, remains basically the same, however. Check with your state's CPA Board, who administers the CPA exam, about any additional requirements they may have. While your state board administers the test, they do not correct it. Results (you need to score a 75 to pass) are handled by the American Institute of Certified Public Accountants (AICPA). Good luck!

What Does a Certified Public Accountant Do?

Duties of a Certified Public Accountant

Even if you are currently a practicing accountant, once you have met CPA license requirements, you will take on the primary responsibilities of a Certified Public Accountant. The most critical function performed by CPAs is to audit the operations and financial statements of both public and private companies, rendering a “certification” that their income statement and balance sheet “fairly” present the results of their operations for the period being examined. While the “opinion letter” (which is the result of their examination) is quite brief, usually only one to three pages, the work leading up to it is extensive.

During an audit, hopefully leading to a “clean” opinion letter, all books, records, accounting entries and related documentation is examined and verified by CPAs. Any apparent discrepancies must be examined and corrected, if possible, before completion of the audit. After all documentation, books and records have been verified and adjusting entries have been made and approved, the CPAs issue an opinion letter. It can be totally without additional comment or might have one or more items noted, often called “subject to” conditions, that the auditors found that may not be in compliance with Generally Accepted Accounting Principles (GAAP), upon which they cannot give a positive comment.

The other important area a CPA tackles is taxation. Often the CPA firm that undertakes the audit of a company is also responsible for all tax issues, including sales tax, income tax and tax planning for future minimization of company taxes. In larger firms, the same CPAs that perform the audit are replaced by tax specialists to process those issues for the company. In smaller firms, the CPA handling both primary issues may be the same person to maintain continuity and positive client relationships.

Can I Take CPA Courses to Help Me Pass the CPA Certification Examination?

CPA Courses Can Help You Pass the CPA Certification Examination

Successfully completing CPA courses tailored for the test will help you pass the CPA examination. There are a variety of courses directly constructed toward CPA license requirements, both on campus and online. Some course providers even “guarantee” that you will pass the CPA examination (but check the disclaimers and rules regarding guarantees offered). Sometimes new accounting degree graduates can sit for the exam without specialty courses since their wealth of knowledge is all current and fresh.

It is often valuable, for those who have been working for some period, to take one or more CPA courses to get information tailored directly for the examination. Some programs will pre-test you to determine your strengths and weaknesses before you begin your course study. You can even takes CPA courses with the aid of a personal trainer now. While you may not increase your bench pressing ability with this type of personal trainer, he/she might help you to stay focused on the goal at hand and greatly improve on your weak areas.

Fees for CPA courses vary greatly depending on your need for basic refresher knowledge or concentrated study, personal trainers and/or “guarantees” of success. The good news: whatever level of added knowledge you need is available in a classroom setting or online.

What Are the Requirements to Earn a CPA Certification?

CPA License Requirements

There is an education requirement and an examination that must be passed to earn a CPA certification. Since there is technically no experience requirement in many states, you can actually become a Certified Public Accountant without ever having worked for an accounting firm. You should be aware, however, that like the American Bar Association and the medical profession, the group that is already certified, in this case the American Institute of Certified Public Accountants (AICPA), has no desire to “give away” this designation and allow unqualified individuals into its fraternity. You must be prepared for a challenging examination covering all facets of the profession.

If your undergraduate degree is not in accounting, you will probably have to complete one or more courses, including CPA courses, to meet your state's education requirement to sit for the CPA examination.

The examination is standardized throughout the United States and administered by your state's CPA Board and graded by the AICPA. A four part exam, its focus and titles have changed recently since the test has become a computer-based test, instead of pencil-and-paper exam. The four areas of concentration are Auditing and Attestation, Financial Accounting & Reporting (FAR), Regulation, and Business Environment & Concepts. A combination of multiple choice and simulation (essay, real world problems) questions, the exam requires an in depth knowledge of all accounting theory.

How Do I Become Eligible to Take the CPA Examination?

CPA Exam Eligibility

To obtain accounting certification, you must complete the prevailing education requirement. As you might imagine, requirements have changed over the years. You must check with the state in which you are or plan to work to learn what education level they require. The most common current requirement is that you have an earned (not honorary) Bachelor's degree in Accounting from an accredited university, either on campus or online, including the successful completion of 150 credit hours of qualified study.

New graduates (some states allow second semester seniors to take the test) and those who have been working since graduation are eligible to sit for CPA certification. Always check with your state to learn about their specific requirements before you try to register for the examination. If you did not major in accounting, you might have to take one or more undergraduate courses to satisfy the education requirement to be eligible to sit for the exam.

If you have been working for some years and your graduation ceremony is becoming a distant memory, you might want to consider taking CPA courses, which are designed to prepare you directly for the exam process of becoming a Certified Public Accountant. These programs are based on the most recent question trends of the uniform exam and the probabilities of both recurring and new questions on the upcoming standardized test.

What Type of Jobs Require a CPA Certification?

Some Jobs Require a CPA Certification

There are some positions that require accounting certification, some that “prefer” a certificate and others which require only a Bachelor's degree in Accounting, but prefer an additional level of education (MBA, CMA, etc.). Should you plan on a full career in public accounting, you will be required to earn CPA certification to advance your career. Because of the predominance of opinion audits and taxation issues, public accounting professionals must have an accounting license.

Many mid- to upper-level positions in private industry either mandate accounting certification or at least prefer that you have one. In complex financial companies (banks, investment firms, venture capital, etc.), even mid-level management positions may require an accounting license for reasons of compliance and analysis. In these industries and some others, senior level accounting positions (Vice President of Accounting, Vice President of Finance, Chief Financial Officer, etc.) may require CPA certification.

Other companies, even in senior level job situations, may state that a CPA license or MBA is preferred or required, with “or” being the key word. These companies believe that, since the primary accounting functions are not more important than the business management responsibilities, they are comfortable with an MBA holder who has proven himself/herself to also be a competent accountant.

What Does It Cost to Take the CPA Examination and When Is It Given?

CPA Exam Cost and Exam Dates

The CPA examination is uniform in all states in the U.S. It is a four-part examination prepared and scored by the American Institute of Certified Public Accountants (AICPA). The exam, however, is administered by every state's CPA Board of Accountancy, which also sets the fees. Be sure to check with your state's CPA Board of Accountancy to learn the cost in your jurisdiction.

The CPA examination is a 2-day event and now offered quarterly in multiple testing centers around your state. There are four parts, all of which are quite challenging, resulting in an interesting CPA exam statistic. On average, only about 25 percent to 50 percent of the candidates who take it each year pass every part given. Luckily, you are not required to pass the entire exam at once, but most jurisdictions mandate that you pass at least half (two out of the four parts) for partial credit. Then you must sit for and pass the remaining sections within a certain time period as defined by your state. The CPA examination is now computer-based so you can leave your pencil and paper at home. Finally, if you are a new university graduate, check with your state's Board of Accountancy to see if they require applicants for CPA certification to have some accounting experience. If they do, while this should not pose a serious problem for you, it may delay your ability to sit for the exam for six months to a year.

What Continuing Education Programs Are Available for Accountants?

CPA Continuing Education Programs

There are many programs available for CPA continuing education. The most popular are the CPA examination review courses. The CPA exam statistics explain this popularity. Since the introduction of the computer-based uniform exam, passing rates for each of the four sections range from 43 percent to 49 percent! There are many well-educated CPA candidates who have issues with this examination and want to gain any exam advantage available.

Many accountants want to gain extra knowledge in some areas so they can specialize in certain functions, industries and/or subjects. For instance, since the failure of some large companies and the resulting passage of the Sarbanes-Oxley Act in 2002, forensic accounting has become a growing field. Consequently, there are many graduate level courses and certificate programs providing knowledge in forensic accounting, primarily directed at internal “SOX” compliance auditors and CPAs in public accounting responsible for the outside audit of companies.

For many CPAs involved in taxation, the period of October through December each year is a regular time to visit the classroom or take online courses regarding the changes and modifications in the tax law that will be important in the upcoming tax season (January through April). The ever-growing complexity in tax law and the number of changes made annually require the tax specialist to use CPA continuing education courses every year to maintain his/her “expert” status.

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