Save 20% on ALL Wiley CPAexcel Products!
Are you ready to become a CPA? If so, that’s awesome! Accountancy is one of the most secure, stable jobs in any economic cycle, which is important to consider as you plan your future. I’m happy to help you along this path. To do so, I’ll tell you the 10 steps you must take. Let me show you how to become a CPA.
Each of these steps is vital to earning the CPA certification. The CPA journey is a significant undertaking, so you must be completely committed if you want to succeed. Don’t skip any of these steps, and give each your all so you can reach CPA success as soon as possible.
Before we jump into the how, what, and when of the certification procedure, let’s figure out the why — what benefits can you get from becoming a CPA?
The CPA certification provides accountants with these sizable benefits:
These are my 5 reasons to become a CPA. The American Institute of Certified Public Accountants (AICPA), the creator of the CPA Exam, has even more to say about why you might want to become a CPA. The AICPA can confirm that the CPA can accelerate the career of an accounting major. It can open doors in the U.S and around the world for seasoned international accountants. Finally, it can secure the promotion a stuck senior finance professional deserves. In the accounting industry, earning the CPA is one of the best ways to maximize potential and reach career goals.
As a CPA candidate, you’re going to need this motivation. Whoever you are and whatever position you’re in, you need a strong reason to start the CPA journey because the road ahead can be quite tough and long. These benefits can help you determine if the CPA is right for you and help you remember why you’re pursuing it in the trying months to come.
Clearly, the CPA certification is very beneficial for an accounting career. But is it beneficial for your accounting career?
Do the advantages of the CPA align with your long-term plans? Would a different certification supply you with the same gains for less time, money, and effort?
To be sure the CPA is the certification you want, you should look into the accounting certification options that you have. Alternatives to the U.S. CPA include the equivalent in your home country (such as the Association of Chartered Certified Accountants (ACCA) and Chartered Accountants (CA)) or other global accounting and finance qualifications such as the CMA, CFA, and CIA.
Similarly, you may want to learn more about advanced degrees before you decide to pursue a certification. Be sure to consider a master’s degree, either in accounting or a related field, like an MBA, so you can choose the best means by which to advance your personal career.
I’ve already mentioned that getting CPA certified is a challenge. But if you’d like some proof, consider these CPA facts:
The CPA has some of the most demanding requirements of any accounting certification. In the U.S., the states grant the CPA license, so the state boards of accountancy determine the licensure requirements. Most state boards have settled on these three CPA requirements:
Some state boards also expect candidates to meet an additional requirement by passing an ethics exam. While the general requirements are the same across the country, the specifics vary per jurisdiction. Therefore, you must contact the state board to which you would like to apply to find out exactly what it’s going to take to earn the CPA and if you’ve got it in you.
The CPA Exam pass rates have a reputation for being fairly low. While the percentages rise and fall from quarter to quarter, the average CPA Exam pass rate is less than 50%. The exam’s purpose includes protecting the public interest, and as long as that’s the case, I expect the exam will always be quite tough. In order to better test the knowledge and abilities required of current CPAs, the AICPA regularly modifies the exam with changes like content updates, new question types, altered question totals, and testing time adjustments. However, you don’t need to be discouraged by the low pass rates. They don’t mean that you can’t pass; they just signify that passing the CPA Exam requires a lot of time, effort, and focus. If you’re ready to commit to that, you can pass it.
The CPA Exam contains 4 sections that test your knowledge of various accounting topics through a significant number of questions. On top of that, the CPA Exam also uses over 600 tasks representing the work of a real CPA to assess your accounting skills. The AICPA has assigned one of the following skill levels to each of the representative tasks:
(Lowest to Highest)
|Remembering and Understanding||The perception and comprehension of the significance of an area utilizing knowledge gained.|
|Application||The use or demonstration of knowledge, concepts, or techniques.|
|Analysis||The examination and study of the interrelationships of separate areas in order to identify causes and find evidence to support inferences.|
|Evaluation||The examination or assessment of problems, and use of judgment to draw conclusions.|
While these skill levels may sound intimidating, the AICPA has established the difficulty of these skills within the context of the CPA Exam. So depending on your personal background and abilities, some of the tasks may not be hard for you regardless of their skill level. The CPA Exam intends to prove that you have the abilities of a CPA, and you can acquire these skills on the job and from using a CPA review course, so you don’t need to fear. You just need to put the work in.
One final CPA Exam complication you must overcome is the rolling 18-month window in which you must pass the exam. This time period starts as soon as you pass your first section, so you technically have 18 months to pass the remaining 3 sections. If you don’t pass the rest of the exam in this time, you will lose credit for the first section you passed, and you must pass that section again as well as the other remaining sections in 18 months. The beginning of the 18 months will continue to move back, cutting off credit for your oldest passed section and shifting the start to the time you passed your second oldest section. This time limit may sound intimidating, but it is actually more time than you need, as passing the CPA Exam in a year or less is quite possible. You just need to establish a study schedule, stick to it, and keep moving forward with each exam section.
Now that you know more about the reality of the CPA certification process, you can determine if you are ready and able to put in the work no matter what. You must answer that question for yourself after weighing these pros and cons.
Before you can enjoy the benefits of the CPA, the certification is going to cost you. You’ll not only have to pay for the CPA with your time and energy but with your money as well. Exam fees and review course materials are 2 inevitable and immediate expenses that come with a combined price tag of at least US$3,000. You may also encounter additional expenses such as an evaluation report, travel, the license fee, and CPE courses. You can learn more in my breakdown of the CPA Exam fees.
I mentioned many of the benefits of the CPA in my first point. The most practical and tangible benefit would be the increase in salary, and it is also the one that will cover the funds you put into earning the CPA. To better understand the dollar amounts of the CPA salary, check out my CPA salary guide, this professional 2018 accounting salary guide, and the CPA salary range.
As I mentioned, the CPA certification process includes meeting the state boards’ CPA requirements, all of which differ slightly. The majority of state boards make candidates have 120 credit hours of education (the equivalent of a 4-year bachelor’s degree) before allowing them to sit for the CPA Exam. The state boards prefer your degree be in accounting, but at the very least, you usually must have 24 credit hours of accounting courses and 24 credit hours of business courses.
You can sit for the CPA Exam once you’ve earned the 120 credit hours, but you can’t secure the CPA certification until you’ve extended your education to 150 credit hours (the equivalent of a master’s degree). There are several ways in which you could earn all the credits you need to meet this CPA requirement:
As soon as you’ve earned the 120 hours, you should register to sit for the CPA Exam. If you live and work in the US, you can apply to your resident state board. For international candidates, you may select a state board according to their specific CPA education requirements and on how you plan to fulfill them.
Once your state board CPA application has been approved, you can register to sit for the CPA Exam. There is only one CPA Exam used across America. Its official name is the Uniform CPA Examination.
The AICPA administers this computer-based examination that covers intermediate/advanced accounting and related fields such as business, law, and taxation. The 4 exam sections cover a wide range of topics within these areas through 3 different question types: multiple-choice (MCQs), task-based simulations (TBSs), and written communications (WCs). The exam presents dozens of these questions in a total of five testlets, all of which you must complete in 4 hours total.
|Testlet||Auditing and Attestation (AUD)||Business Environment and Concepts (BEC)||Financial Accounting and Reporting (FAR)||Regulation (REG)|
|Testlet 1||36 MCQs||31 MCQs||33 MCQs||MCQs|
|Testlet 2||36 MCQs||31 MCQs||33 MCQs||38 MCQs|
|Testlet 3||2 TBSs||2 TBSs||2 TBSs||2 TBSs|
|Testlet 4||3TBSs||2 TBSs||3 TBSs||3 TBSs|
|Testlet 5||3 TBSs||3 WCs||3 TBSs||3 TBSs|
The exam format sounds tricky at first, but you will get used to it as you go through the CPA Exam application process and use a CPA review course to study. While the CPA Exam is not a simple test, you’re an accountant, so I know you can handle a few more numbers.
You can start with any exam section you like. I suggest you begin with the part you feel more comfortable with and build your CPA Exam schedule out from there. If you’re feeling confident enough, you can even take two (or more) sections within the same testing window.
Upon successful registration, you will receive a document known as Notice to Schedule (NTS). It includes a launch code for you to schedule the exam parts at the Prometric website.
Prometric is a company that runs computerized test centers for CPA and many other professional exams. The CPA exam is available every weekday during the following testing window:
Candidates are allowed to register in one state and physically take the exam in another state. Since 2011, candidates can also take the CPA exam in Japan, Brazil, and 4 Middle East countries as long as they are citizens or long-term residents in those (or adjacent) countries. Indians are allowed to take the exam at the Middle East centers:
There is a CPA Examination Tutorial and Sample Test on the AICPA website. The tutorial and questions reveal important information about what is covered, how to use the various tools, and resources provided in the examination.
To improve your chance of success, I highly recommend a CPA review course. Major providers boast a passing rate of high 80% among first-time candidates — meaning almost 9 out of 10 students pass on their first try:
After passing the Uniform CPA exam, some (but not all) state boards require passing of an ethics exam. This is a self-study open book test that is much easier than the Uniform CPA exam.
Most states require you to have 1 – 2 years of working experience to obtain the CPA license. If you have no problem getting an accounting related job after passing the exam, this should be an easy step for you to achieve your full practicing license.
However, if you do not plan to work in a public accounting firm, or don’t plan to work in the US, please beware:
Further reading on experience requirements:
This video focuses on the actual application process:
I hope this article has at least pointed you to the right direction.
Thanks for taking the time to read to the end. I wish you the best of luck on your CPA journey!
I know the process sounds awfully complicated, but once you take the first step in your CPA journey, you’ll find that it’s completely doable. I am more than happy to help you along the way!
If you find this article helpful, please consider signing up to my mini-course, which is completely free. I have two versions designed for candidates with different backgrounds:
* Those with U.S. degrees or who
graduated/live/work in the U.S.
^ Those who study abroad or who
graduated/live/work outside of the U.S.
Action is the key to success. Join us now and see you there!
I am the author of How to Pass The CPA Exam (published by Wiley) and the publisher of this and several accounting professional exam prep sites
Please log in again. The login page will open in a new window. After logging in you can close it and return to this page.
Save 20% on ALL Wiley CPAexcel Products!