Are you a Japanese accounting professional contemplating on a Japanese CPA or US CPA designation? Which one should I go for? Does it make sense to get both? Let’s take a look.
The overall accounting/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.
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 body and each state has slightly different CPA exam and licensing requirements.
The AICPA has more than 400,000 members in 128 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.
The administration and granting of CPA license in Japan is done via a single entity and so the application process is much simpler and easier.
JICPA is a statutory accounting body in Japan, and all Japanese CPA must join JICPA in order to practice as a CPA in Japan. There are nearly 30,000 members including the associate members.
The US system has a tougher qualification process, but once you get qualified, the process is simpler and more flexible.
Candidates must have a minimum of a 4-year bachelor degree and preferably a master’s degree in order to fulfill the 150 credit hours, equivalent to 5 years in higher education.
Once you are approved for the exam, you will sit for the exam but you are on your own in terms of how to get prepared. Most candidates choose to take review courses to help in the studies.
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.
There are 4 parts of the exam: Financial Accounting & Reporting, Audit & Attestation, Regulation and Business Environment & Concepts.
The exam is 100% computerized consisting of multiple-choice questions, task-based simulations (i.e. intense case studies) as well as written communications. Grading is also mostly computerized.
You can choose to take the 4 parts one at a time, 2 at a time or even 4 at the same time. You can sit for the exam any time (Monday to Saturday) during the first 2 months of each quarter and at any Prometric centers throughout the US as well as in Japan, Brazil, and 4 Middle Eastern countries.
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:
Successful candidates can then move on to the essay part of the exam covering the following topics:
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.
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.
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.
AICPA (the US accounting body) has a reciprocal agreement with 7 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 7 accounting bodies, and therefore, Japanese nationals are not entitled to the exemptions.
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!
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:
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.
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.
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!