There have been lots of questions and misunderstanding on CPA licensing in the US. I would like to take this opportunity to answer these common questions.
CPA without License?
The most common licensing questions is whether licensing is necessary if the candidates don’t plan to practice as a CPA in the US. This means they only want the CPA title for credentials only.
Short answer: if you want to put “CPA” behind your name on business cards and resume, you must have a license.
Long answer: In the past, a number of state boards ran a “two-tier” system where they gave out “CPA certificates” to those who passed the CPA exam, and “CPA license” or “permit to practice” for those who completed the experience requirements. This is no longer the case as almost all states have switched to one-tier.
Another 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 US CPA, you ought to be licensed.
CPA License with 120 Credit Hours Only
In the past, you can get a full CPA license with 120 credit hours alone. Effective July 2015, the remaining state (Colorado) has adopted the 3E rules, which means all state boards now require 150 credit hours.
Rest assured that there are ways to get the extra 30 credit hours. As long as you fulfill the degree requirement (i.e. have at least a 4-year bachelor degree), you can get these credits from any non-degree courses in any accredited educational institutions. If you have enough accounting and business credits to get qualified, you can take courses in ANY subjects, be it introduction to golf, gardening… anything you prefer.
For details, check out this page: http://ipassthecpaexam.com/cpa-exam-150-credit-hours/
CPA License without SSN
There are states that strictly require social security number. This includes (but not limited to) California and Virginia.
Then there are states that as a general rule, ask for your SSN but if you have a valid reason of not providing the SSN (e.g. if you don’t have the number as a H4 visa holder or as a non-US candidate), then you can write a letter, fill out a form or get an ITIN instead. These states include (but not limited to) New Hampshire and Massachusetts.
Finally there are states that don’t require SSN from anyone. Examples are Illinois and Guam.
For details, check out this page: http://ipassthecpaexam.com/aspiring-cpa-without-social-security-number-ssn/
CPA License without Working Experience
Most state boards require your supervisor to verify your experience, and this supervisor has to be a US CPA. This adds a lot of restriction in the process.
Luckily, there are a few states with more flexible requirements, such as allowing non-CPA supervisors to verify your experience.
For a list of these states, check out this page: http://ipassthecpaexam.com/cpa-experience-requirements/
CPA License without Public Accounting Experience
It used to be a common concern because not every CPA candidate works in audit. For example, those who aspire to work as CFO in corporate, and those who specialize in tax may have problems fulfilling the experience requirement.
Most state boards realized this limitation and have since amended their regulations to widen their definition of relevant experience. Specifically, non-public accounting and taxation work are accepted towards your CPA licensure.
A handful of states still don’t grant CPA license without audit experience. Do check with your state boards before proceeding.
CPA License without Accounting Degree
It is getting a lot tougher for non-accounting majors to pursue the CPA designation. The accounting credit hours required is often equivalent to those with an accounting concentration. Having said that, if you are determined to take the exam, you can either take an extra master’s degree in accounting, or several non-degree accounting courses to make it up.
For details, check out this page: http://ipassthecpaexam.com/cpa-for-non-accounting-majors/
The current trend is to get the CPA designation with a full license. There are often obstacles, such as being a non-accounting major, not having enough credit hours, not working in audit or not working under a CPA, or not having the SSN. In each of these cases, there are ways to work around it.
I encourage that you explore all possibilities in order to get the full CPA license. If you have any questions, you are most welcome to drop me a note in the comment section below, or ask a question on my Facebook page.
For Your Further Reading
Next steps for those with bottlenecks in these areas: