Readers are often confused about CPA certificate vs license. I am going to highlight the difference below, but bear in mind that CPA certificates are becoming less relevant because most state boards stopped issuing them.
CPA Certificate vs License: An Overview
Each state has its own laws and rules governing the CPA profession, and each has its own Board of Accountancy that monitors the CPAs that it licenses.
For most states, the term “CPA certificate” and “CPA license” is inter-changeable. However, for “two-tier states” there is a distinction between the two:
- Work experience is often not required.
- No CPA CPE (continuous professional education) hours required.
- Scope of work is limited as certificate holder cannot own a CPA firm (either as sole owner or partner) or sign an audit report.
- Cannot normally hold yourself out as a CPA. Some states allow you to say “CPA but not in public practice”, while others simply don’t allow you to use the title in any way.
- Typically require 1-2 years of working experience, supervised and/or verified by a CPA licensee.
- CPE hours required every reporting years (typically 120 hours every 3 years).
- Can use CPA title in business cards and own CPA firm/sign audit report.
Implications to International Candidates
Because certificate is easier to get, one can consider certificate as the “first level”. The license, or permit to practice, is the “second level”. In fact, many international students aim for certificates only because the CPA qualification is used mainly for the enhancement of their credentials.
Due to confusion and some abuses in the system, most states have switched from two-tier to one-tier.
The only state that is applicable to international candidates, in my opinion, is Montana, but even then they have restrictions on how you can use the CPA title. (Update: Montana has become 1-tier state effective July 1, 2015)
Inactive or Non-Reporting CPA License
There are other types of restricted licenses that you can consider. You may obtain a non-reporting license from Massachusetts as long as you fulfill their exam requirements (including 150 credit hours) and that you have a graduate degree. No experience is required. In turn the non-reporting license allows you to use the CPA title without the privilege of signing audit reports.
In Guam, they have an inactive license without the need to reach 150 credit hours and accumulate the relevant experience. The applicant must be an accounting major and must fulfill the exam requirements including a 4-year bachelor degree.
These non-reporting or inactive licensees are required to fulfill CPE requirements and pay license fees on a regular basis.
But People in my Country Said I can be a CPA without Getting the License
There are questions and even challenges from readers who insist that a license is not necessary to use the US CPA title, because “everyone” said so in their country.
I would like to quote Chee Kin Tang’s excellent response to one of the readers on my facebook page on this topoic:
The reason why people say you do not need to be “licensed” as a CPA outside the US is because most people think of a “license” in UK/commonwealth terms. License in those terms refer to getting an audit license or qualification after one has already been certified/admitted to membership as a CA or ACCA.
This concept of licensing in the US does not typically arise in the US because state CPA boards are statutory bodies whereas UK bodies are not and therefore their authority to issue licenses are either derived from act of parliament or is or the license is issued by a governmental ministry. If one is licensed as a CPA with the right experience, one can perform public accounting services and be a reporting/signing accountant. There is no additional step of obtaining an audit license.
Therefore, if you want to be a CPA, you ought to be licensed (or certified). The issue is getting 21 more credits and then choosing the right state. If you do not have an SSN or a CPA to sign off on your experience, then your choices are ND, IL, WI. If you have an SSN, add VA and OH to the list.”
If you are still not convinced, please look up the rules and regulations of your chosen state board. They usually have the full regulation publicly available, either online or in PDF format on their websites. You can also send an email to the state board to confirm.
We cannot force anyone to comply with the regulations. Please understand that it is the candidate’s responsibility to find out the fact and understand the rules.
Nowadays, I strongly recommend that candidates regardless of origin to go for the full license. If you have difficulties fulfilling the educational or experience requirements, they are ways to resolve this. Please check out these pages for possible solutions:
For Your Further Reading
- Which are the remaining CPA exam two-tier states?
- What are CPA exam requirements by state?
- CPA exam application process for candidates with non-US background
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