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CPA License Requirements: Rules, Obstacles and Remedies
There have been lots of questions and misunderstandings about CPA licensing in the US. I would like to take this opportunity to answer these common questions.
CPA without a License?
The most common licensing question is whether licensing is necessary if candidates don’t plan to practice as a CPA in the US. This means they only want the CPA title for credentials.
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 that most people think of a “license” in UK/commonwealth terms. License in those terms refers 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 is either derived from an act of parliament 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.
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Save on the Gleim CPA Review Discount Premium Course
Gleim CPA discount applies to Premium Gleim CPA Review sections. Gleim CPA discount auto-applies in your cart once you add an item.
(Use the button – discounted price appears in cart.)
Save $1,200 to $1,250 on Gleim CPA Premium and Premium Pro
CPA License with 120 Credit Hours Only
In the past, all state accounting boards required candidates to have 150 credit hours of higher education. Basically, that meant that you had to have a master’s degree or a bachelor’s degree (which is worth 120 hours) plus 30 hours of additional coursework.
However, some states have changed that rule and now accept candidates with only 120 hours of higher education if they have additional work experience. We have an entire post dedicated to the CPA requirements by state to help you navigate the changes.
Still, many states are holding onto the so-called “150-hour rule.” So what should you do if you live in a state that requires 150 hours, but you only have 120 (because you have a bachelor’s degree but not a master’s degree)? Well, 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’s 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: https://ipassthecpaexam.com/cpa-exam-150-credit-hours/
CPA License without an SSN
There are states that strictly require candidates to have a Social Security number. This includes (but is 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 for not providing the SSN (e.g., if you don’t have the number as an 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 are not limited to) New Hampshire and Massachusetts.
Finally, there are states that don’t require a SSN from anyone. Examples are Illinois and Guam.
For details, check out this page: https://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 restrictions 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: https://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 a CFO in a corporate setting, 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 is accepted towards your CPA licensure.
A handful of states still don’t grant a CPA license without audit experience. Double check with your state board before proceeding.
CPA License without an 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 earn an extra master’s degree in accounting or several non-degree accounting courses to make it up.
For details, check out this page: https://ipassthecpaexam.com/cpa-for-non-accounting-majors/
Conclusion
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, not working under a CPA, or not having an SSN. In each of these cases, there are ways to work around it.
I encourage you to 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:
About the Author Stephanie Ng
I am the author of How to Pass The CPA Exam (published by Wiley), and I also passed all 4 sections of the CPA Exam on my first try. Additionally, I have led webinars, such as for the Institute of Management Accountants, authored featured articles on websites like Going Concern and AccountingWeb, and I'm also the CFO for the charity New Sight. Finally, I have created other accounting certification websites to help mentor non-CPA candidates. I have already mentored thousands of CPA, CMA, CIA, EA, and CFA candidates, and I can help you too!
