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Which is Better for Japanese Accountants: JICPA or AICPA?
Are you a Japanese accounting professional contemplating on a Japanese CPA or US CPA designation? Which one should you go for? Does it make sense to get both? Let’s take a look and compare the US CPA and the Japan CPA credentials.
JICPA or AICPA: Organization Structure
The overall accounting and CPA organization system in the US is complicated with many stakeholders. But in terms of membership, it is more than 10 times larger than its Japanese counterpart.
US CPA Details
The Certified Public Accounting (CPA) license is granted by each of the 55 states or jurisdiction in the United States. In other words, there is no centralized governing body and each state has slightly different CPA Exam and licensing requirements. Plus, according to NASBA (the National Association of State Boards of Accountancy), there are over 653,000 CPAs with active licenses in the United States.
Likewise, the AICPA (the American Institute of Certified Public Accountants) has more than 412,000 members in 144 countries, including CPAs in business and industry, public accounting, government, education, student affiliates, and international associates. Most US CPAs are AICPA members, but membership is not mandatory.
Details of the Japanese CPA
The administration and granting of CPA license in Japan is done via a single entity. As a result, the application process is much simpler and easier.
JICPA (the Japanese Institute of Certified Public Accountants) is a statutory accounting body in Japan, and all Japanese CPA must join the JICPA in order to practice as a CPA in Japan. JICPA has a membership of almost 37,000 professionals, including associate members.
JICPA or AICPA: Application & Qualification
The US system has a tougher qualification process to get your CPA license. But once you get qualified, the process to become a CPA is simpler and more flexible in the United States verses Japan.
US CPA Exam Qualification
Candidates must have a minimum of a 4-year bachelor’s degree to take the CPA Exam. However, the CPA education requirements in many (but not all) of the US states and jurisdictions state that candidates may need a master’s degree or 150 credit hours of higher education (equivalent to 5 years of college courses). (In the last few years, though, some states have started to accept only 120 hours of higher education — basically, a bachelor’s degree — if candidates have additional years of experience to compensate for fewer years in college.)
Once you are approved to sit for the exam, you are on your own in terms of how to get prepared. Most candidates choose to study with one of the best CPA Exam review courses. (Becker CPA is a popular choice.)
Qualifying for the Japanese CPA Exam
Like most nationally administered professional exams, anyone can sit for it — you don’t need to have completed a specific college course.
Theoretically non-Japanese nationals can take the exam, but this is very rare as the entire exam is administered in Japanese.
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JICPA or AICPA: Exam Content and Format
US CPA Format
The US CPA Exam follows a Core + Discipline model. That is, candidates must pass three mandatory Core sections, which include Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Taxation and Regulation (REG). In addition, candidates must take and pass one Discipline section, but they have three to choose from, including Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), and Tax Compliance and Planning (TCP).
The exam is 100% computerized consisting of multiple-choice questions and task-based simulations (i.e. intense case studies). Grading is also computerized.
You can choose to take the four CPA Exam parts one at a time, two at a time, or even four at the same time. You can sit for the exam during the CPA Exam windows at any Prometric testing center in the United States. International testing is also available in many countries across the world.
Japanese CPA Format
The licensing consists of a 3-stage exam held annually, only in Japanese. It consists of a multiple-choice exam and an essay exam. The multiple-choice questions cover the following topics:
- Financial accounting and reporting
- Managerial accounting
- Auditing
- Business law
Successful candidates can then move on to the essay part of the exam covering the following topics:
- Financial accounting and managerial accounting
- Auditing
- Business law
- Tax law
- One of: (a) business administration, (b) economics, (c) the Civil Code or (d) statistics.
JICPA or AICPA: Time Required to Become Qualified
US CPA Time Frame
Most candidates aim to pass the CPA exam within a year. Some who have the time and commitment can study all materials within 6 months, take all 4 parts of the exam in one go and pass. However, once you pass the first of the four CPA Exam sections (AUD, FAR, REG, and a Discipline section), you have 30 months to pass the remaining three sections.
After passing the CPA exam, candidates are (in most cases, depending on the state) required to obtain 1-2 years of relevant experience. The candidates are allowed to accumulate this experience and take the exam at the same time.
Time to Earn the Japanese CPA
Given the number of papers and the fact the exams are held only once a year, candidates generally take longer to pass the entire exam.
The candidate is also required to have practical audit experience at an accounting firm, or working experience in industry a minimum of 2 years, either before or after taking the exam.
At the same time, successful candidates of the CPA examination are required to complete a 3-year long professional accountancy education program provided by JICPA. You can see this as an internship, similar to what is required for lawyers.
Those who completed the professional accountancy education program are qualified to take the final assessment, which is conducted annually by JICPA.
JICPA or AICPA: Reciprocity and Exemptions
US CPA
AICPA (the US accounting body) has a reciprocal agreement with several accounting bodies in the world. Their members can choose to take a simplified version of the exam known as IQEX. JICPA is NOT among these accounting bodies, and therefore, Japanese nationals are not entitled to the exemptions.
Japanese CPA
Although it is theoretically possible to have foreign credentials recognized in Japan, it requires approval from the highest levels of government. According to the JICPA website, only 4 (out of 19,935 regular members in 2009) are registered foreign CPAs… and apparently the last approved registration was filed in 1975!
Other Considerations
As a Japanese national, you can take the US CPA exam in Japan through the 4 Prometric centers in Tokyo, Osaka and Yokohama.
A US CPA in Japan is allowed to:
- own his/her accounting firm as long as he/she does not undertake Japanese audits.
- give advice to Americans living in Japan for their US taxes.
They are also the preferred candidates when it comes to hiring in global and multinational companies. Most of these companies have to file reports (in English) with the U.S., U.K as well as Japan.
Conclusion about JICPA vs AICPA
Looking at the number of JICPA members, the Japanese exam is probably pretty tough to pass. Japanese look for global accounting qualifications outside of Japan to prove their accounting expertise.
In fact, thousands of Japanese nationals take the US CPA exam every year. Japan remains the country with the most number of non-US candidates.
The US CPA exam’s entry barrier is pretty high with an equivalent of a masters’ degree together with strict working experience requirements. However, once the requirements are met, the process is more flexible and arguably easier, and the qualification can open to many doors even in Japan.
If you have any questions and thoughts on this topic, please join in the conversation in the comment section below.
Further Reading
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!
