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How to Become a CPA – Education, Certification, & Salary

CPA or finance advisor doing a meeting with a couple at home

Every industry from agriculture to tourism has to account for their spending, earnings, and taxes. Thankfully, there’s an accountant for that! Accounting is a career path in high demand that offers job security and vast opportunities in differing capacities across all fields. You can begin this career with online CPA programs.

An accountant has a tremendous amount of influence on an organization’s growth. They prepare financial statements, maintain records, perform audits, and update numerical data, which plays a vital role in the day-to-day business decisions. To achieve the highest level of accounting within their offices, firms hire certified public accountants.

In this article, GetEducated will outline the steps you need to become a certified public accountant. Take the next step in securing your career, and read on!

What is Accounting?

Warren Buffet has said, “Accounting is the language of business.” This statement suggests that accounting is the merging of finance and business. A business cannot succeed if the finances are not tended.

According to Indeed.com, the following are tasks performed by accountants:

  • Prepare and issue invoices to a company’s customers.
  • Prepare and issue tax reports to local, state, and federal government entities on behalf of a company or individual.
  • Reconcile bank statements.
  • Analyze profits and losses.
  • Maintain and process payroll.
  • Create and review budgets and expenses.
  • Develop and maintain financial databases for individuals and companies.

Careers for Accountants

The term accountant spans a wide variety of duties and responsibilities. While every industry needs accountants, within every corporation or government, financial reporting, budgeting, auditing, and tax preparation offer options in which to focus your career. Here are a few career path categories within accounting and a brief description:

  • Auditors assess, analyze, and maintain financial records to verify accounts and provide recommendations.
  • Forensic accountants study financial records to look for discrepancies or fraud.
  • Government accountants work at all levels of governance in tax collection, budgeting, and tracking expenditures.
  • Management accountants use financial data to help executives make sound financial decisions through risk assessment.
  • Cost accountants streamline businesses to increase profits by analyzing all costs.
  • Staff accountants can be numerous within an organization as they perform all the foundational accounting duties from payroll to bookkeeping.
  • Certified public accountants are the most qualified accounting professionals who act as a trusted financial advisor who oversees all the finances for an organization.

Hierarchy of Accounting Jobs

As every business and organization must keep financial records, work in accounting is plentiful. We present the various career levels and corresponding job titles from Hierarchystructure.com.

Entry-Level Accounting Positions

Some accountants start their career with some college or an associate’s degree. The positions they qualify for are considered entry-level positions.

  • Auditor
  • Accountant
  • Strategic Accounting Analyst
  • Senior Chartered Accountant
  • Chartered Accountant
  • Budget Manager
  • Budget Analyst
  • Market Analyst
  • Tax Consultant
  • Senior Accounts Analyst
  • Junior Accountant
  • Analyst, Accounts
  • Assistant, Accounts
  • Trainee, Accounts

Mid-Level Accounting Positions

Mid-level accountants are often managerial positions or require a higher level of responsibility within an organization. Job titles for accountants with a bachelor’s degree or more experience in accounting include the following:

  • Assistant Accounts Manager
  • Accounting Analyst II
  • Senior Accountant
  • Accountant
  • Revenue Cycle Administrator
  • Contracts & Financial Manager
  • Revenue Cycle Executive
  • Tax Accountant
  • Strategic Program Analyst

Senior and C-level Accounting Positions

With more education and experience, accountants can work their way up to senior management or C-suite positions such as chief financial officer. These roles are the decision-makers and analysts for a firm and have titles such as:

  • Accounts Director
  • Chief Finance Officer
  • Accounts Vice President
  • Senior Accounts Manager
  • Senior Accounts Administrator
  • Director of Cash Management
  • Accounting Analyst I
  • Senior Accounts Receivable Manager
  • Senior Accounts Payable Manager

A Focus on Certified Public Accountants

Certified Public Accountants are the most trusted financial professionals.

Individual states set the requirements to earn the title of CPA. Most states require a bachelor’s degree, passing a rigorous test, and a commitment to follow a strict code of ethics. CPAs must also satisfy continuing education credits set by their state.

Professionals with this level of certification earn the highest wages among accountants. They are often in higher demand as they are responsible for maintaining a firm’s financial health.

Because CPAs are the gold standard within the field of accounting, we will delve into the details of becoming a certified public accountant.

What Does a CPA Do?

As trusted financial professionals, CPAs handle tasks that involve sensitive information or require a high degree of ethics and confidentiality. CPAs can also act as compliance officers, assuring their organization follows relevant laws and regulations. Indeed.com lists the responsibilities of a CPA as:

  • Balance financial records and check for inaccuracies
  • Audit individual accounts on a random or scheduled basis
  • Check for major financial issues
  • Ensure projects stay on budget
  • Publish audited financial statements
  • Work with executives and CEOs to establish budgets
  • Oversee Accountants and other financial professionals
  • Make suggestions regarding budgets and other financial decisions
  • Assist with external company audits

Some CPAs specialize in a particular industry that interests them, such as non-profits, restaurants, or healthcare. CPAs may hold jobs such as: tax examiner, budget manager, credit analyst, financial examiner, tax preparer, tax auditor, payroll specialist, financial analyst, or budget analyst.

Work-Life of a Certified Public Accountant

CPAs primarily work in an office during standard office hours. Employers include local, state, and federal governments as well as corporations and small businesses. If you work with a larger firm, you will most likely be a part of a team of accountants. As a CPA, you will probably manage a team of accountants, if not the whole department.

Many CPAs will have a busy season around tax time.

Those who work as auditors typically travel to their client’s locations to assess their financial records. Many CPAs can work remotely.

How to Become a Certified Public Accountant

CPAs earn their credentials through their education, work experience, and passing an extensive exam. The Four E’s is often used to explain the path to this honored career. The Four E’s stand for Education, Ethics, Experience, and Examination.

As each state sets the certification requirements, the following are general guidelines.

Educational Requirements

Education is the key to becoming a certified public accountant. Before taking the licensing exam, you need to earn between 120 to 150 post-secondary credit hours. A bachelor’s degree program will cover the required 120 credit hours. For states requiring 150 credit hours, a master’s degree program in accounting will ensure you have sufficient credit hours. It is also possible to participate in graduate certificates at colleges and universities to specialize in an area of accounting while earning your additional college credit hours.

Career changers with a bachelor’s degree in another field may only need to obtain a graduate certificate in accounting to meet the education requirement. Many higher education institutions offer graduate-level certificates in different areas of accounting to help a candidate complete the provision of 150 credit hours.

Ethics

Certified public accountants are subject to a code of ethics or code of conduct. It is required by CPA designation holders to adhere strictly to the code of professional conduct as set out by the American Institute of Certified Public Accountants (AICPA). The code of ethics lays out the ethical standards CPAs must adhere to. Federal and state laws require CPAs to maintain independence when performing audits and reviews.

The CPA designation has become more critical after the Sarbanes-Oxley (SOX) Act of 2002, which was passed partly in response to corporate financial scandals such as the Enron disgrace. Accounting scandals make headlines when billions of dollars are involved. The collapse of Enron in 2001 and Lehman Brothers in 2009 both involved unethical practices of redistributing monies to make the business look better “on the books.” Accountants are legally obligated to avoid negligence and act honestly in their practices. This level of integrity extends to ascertaining compliance with relevant laws and regulations for their clients.

Experience

The state you pursue your certificate in public accounting will determine the length of work experience required to obtain your CPA title. Some states require as little as six months working under a CPA, while others raise the bar to two years of work experience with a CPA.

Work requirements can be satisfied through an internship if the internship is not part of the degree curriculum. Otherwise, candidates for the CPA certificate must have work experience in public accounting.

Exam

Passing the exam is the final step in becoming a certified public accountant and beginning your career. The CPA exam consists of four sections. Each section will evaluate your knowledge and understanding of accounting practices.

The four sections of the CPA exam are:

  • Auditing and Attestation
  • Business Environment and Concepts
  • Financial Accounting and Reporting
  • Regulation

As the CPA exam is quite involved, below is a detailed explanation of the process.

Taking the CPA Exam

Each of the four exam parts is taken individually. You will have the flexibility to determine the order you want to take each section. A time limit of 18 months is set after you pass your first section to complete all four exam sections.

The CPA exam is 324 multiple-choice questions, 20 task-oriented questions, and three written essays. Roughly 50% of candidates pass the CPA exam. The good news is, if you do not pass one section, you can apply to retake it again and again until you pass, as long as you have not exceeded the 18-month time frame. As most candidates find the Financial Accounting and Reporting section the hardest, it is prudent to tackle this section first as the 18-month clock doesn’t start ticking until you pass your first exam.

Improving your CPA Exam Pass Rate

The level of difficulty of professional exams, such as this one, has created an industry of review courses to prepare candidates to succeed in their quest of passing the exam. You can find a CPA Review Course online to meet your needs. The review course will prepare you for the style of questions, the scope of the material you will be tested on, and the format of the exams. Some courses offer feedback and give you an idea of your chances of passing.

Keep in mind that many online courses prepare you for the CPA exam in a specific state. You’ll need to ensure that the courses you register for will adequately prepare you to take the exam where you wish to work. CPA Review Courses range in price from $1,500 to $2,000.

Professional associations, such as the American Institute of Certified Public Accountants, offer tutorial videos and sample tests. If you are confident of passing the exam, this is an excellent place to start. If you find your skills lacking, you can find a review course to help prepare you for this challenging test of your abilities.

Apply to Take the CPA Exam

The application process is straightforward. First, the state board of accountancy will review your education. Successful approval of your credentials gives you access to the CPA exam application. From there, you fill out the application to take the exam. Most states charge around $900 for the entire exam.

After your application is processed, you will be issued a Notice to Schedule (NTS), which allows you to schedule and take a section of the CPA exam. Each section requires a new NTS.

Age Restrictions

To become a certified public accountant, you must be 18 years of age or older.

Soft Skills that will Benefit your Career

While education and experience are essential, employers seek soft skills in their candidates. Soft skills are the productive personality traits inherent in you. Most employers want a CPA with strong analytical and problem-solving skills. Other personal qualities often sought after include:

  • Organizational Skills. You will be required to plan and direct your work. Keeping track of the data and turning them into reports is essential.
  • Verbal and Written Communication Skills. You must be able to communicate clearly and effectively with co-workers and clients.
  • Active Listening Skills. To be effective, you must understand the problem and the needs of the executives, your team, government officials, or your customers or clients.
  • Independent Worker. The ability to heed direction and complete tasks on your own is paramount for an accountant.
  • Attention to Detail. As you will be working with numbers and data, you will need to focus to prevent errors and oversights. You are responsible for keeping the data accurate and organized.
  • Problem-solving. Businesses are rife with problems that need solving. Your ability to identify, define, and resolve problems will advance your career.
  • Analytical skills. Analyzing financial data leads to insights to help a company grow and improve profits.
  • Life-long Learner. CPAs must keep up-to-date with new software, analytical trends, and data management and security.

Online Degree Programs

Colleges and universities offer all levels of degrees in accounting. An associate’s degree is sufficient to be a bookkeeper or work in entry-level accounting jobs.

 

For those who have their sights set on becoming a CPA, a minimum of a bachelor’s degree plus additional credit hours in accounting is required. Most students can complete a bachelor’s in accounting in four years. It takes an extra year to meet the requirement of an additional 30 credit hours needed for a CPA. Students may opt to receive a bachelor’s degree and work in the field before pursuing their CPA through more education and passing the exam.

Standard courses you might find in a program for a bachelor’s in accounting include:

  • Taxes
  • Insurance
  • Business law
  • Macroeconomics
  • Microeconomics
  • Spreadsheet software
  • Managerial accounting
  • Non-profit accounting
  • Financial accounting
  • Forensic accounting
  • Cost management
  • Fraud detection
  • Government

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Some institutions have specific programs that allow you to meet the educational requirements for your CPA in a five-year degree program. Other programs are designed to award a bachelor’s and a master’s degree in accounting after five years of study. Such programs can be a bit more expensive and entail a more intensive course of study due to the demanding course load. Holding a master’s in accounting can increase your employability as well as your salary.

Coursework for additional credit hours needed to qualify for as a CPA, or to work towards a master’s degree, can include courses such as:

  • Ethics
  • Auditing
  • Treasury Management
  • Strategic Finance Practice
  • Financial Markets and Institutions
  • International Corporate Finance
  • Financial Recordkeeping
  • Information Technology
  • Personal and Business Tax
  • Statistics

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Changing Careers to Become a CPA

For anyone who enjoys data management and the corporate world system, accounting might be a great career shift for you. For example, office managers with a bachelor’s degree and basic bookkeeping need to take advanced accounting and auditing coursework to meet the educational requirements before taking the CPA exam.

CPA Wages & Salary Expectations

According to the Bureau of Labor Statistics (BLS), accountants earn an average of $73,560. An individual’s earning potential depends on education, experience, and location.

Data from PayScale.com, shows that the average salary for CPAs increases steadily with more experience. CPAs with one to four years of experience earn an average of $60,000 per year, while CPAs with more than twenty years of experience earn $98,000 per year. In addition, some employers may offer CPAs performance-based bonuses and other monetary benefits.

CPA Career Growth

The CPA profession has evolved over the years. Based on the statistics obtained from the United States Bureau of Labor, the need for accountants and auditors is on the increase. The job growth rate of accountants and auditors is projected to grow by 7% through 2030. In 2020, a LinkedIn survey showed that certified public accountants (CPAs) were in sixth place among the most in-demand jobs.

Currently, nearly 1.4 million people are employed as accountants. The BLS predicts 135,000 job openings per year. As far as career offerings go, there are many opportunities for you to start your career as an accountant.

Beyond Accounting

Automation of routine tasks, such as payroll, data entry, and tax preparation, might threaten the jobs of lower-level accountants and bookkeepers. However, there will be increased demand for CPAs. CPA will be needed to keep financial data secure. They will also help companies be more transparent in their accounting practices to develop the trust of shareholders and the public. Many accountants will be focusing on data analytics, which analyzes large amounts of data to identify trends.

Data Analytics can be divided into four categories:

  • Descriptive analytics examines data for meaning and patterns.
  • Predictive analytics looks at future strategies and trends.
  • Diagnostic analytics uses data to establish why an event happened.
  • Prescriptive analytics create plans to move a company forward.

As technology and analytics progress, so do the options for financial careers within accounting.

In Summary

Becoming a certified public accountant can be a life-changing decision to set you up for long-term career success as a highly regarded professional with excellent earning potential. Completing the necessary education and work experience can place you among the top professionals in your field. Now, let’s GetEducated! Your career starts today!

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