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How to Become a CPA: My Complete Guide to the Certified Public Accountant Certification

Are you ready to become a Certified Public Accountant (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. Furthermore, earning a certification like the CPA is becoming more and more crucial to career advancement in the accounting industry. Therefore, 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.

How to Become a CPA in the USA: 10 Steps

Each of these steps is vital to earning the CPA certification. And, the CPA journey is a significant undertaking. Therefore, you must be completely committed if you want to succeed. Don’t skip any of these steps. Instead, give each your all. That way, you can reach CPA success as soon as possible.

Step 1. Identify the Benefits of the U.S. CPA Certification

Before we jump into the how, what, and when of the certification procedure, let’s figure out the why. What advantages can you get from becoming a CPA?

The CPA certification provides accountants with these sizable benefits:

  1. Increased earning potential
  2. Better benefits and incentives
  3. Additional job opportunities
  4. Greater job stability
  5. More job flexibility

These are my 5 reasons to become a CPA. The American Institute of Certified Public Accountants (AICPA), the creator of the CPA Exam, also has much to say about why you might want to become a CPA. The AICPA confirms that the CPA can accelerate the career of an accounting major. It can also open doors in the U.S and around the world for seasoned international accountants. Finally, the CPA can secure the promotion of a stuck senior finance professional deserves. In the accounting industry, earning the CPA is one of the best ways to maximize your potential and reach your 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. For this purpose, these benefits can help you determine if the CPA is right for you. They can also help you remember why you’re pursuing it in the trying months to come.

Step 2. Compare the CPA to Other Accounting Certifications

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? Or 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 CMACFA, 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. That way, you can choose the best means by which to advance your personal career.

Step 3. Analyze Your Ability

I’ve already mentioned that getting CPA certified is a challenge. But if you’d like some proof, consider these CPA facts:

Demanding requirements

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 3 CPA requirements:

  1. Pass the Uniform CPA Exam
  2. Earn 150 credit hours of education
  3. Acquire 1-2 years of accounting experience

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.

Low exam pass rates

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 because they don’t mean that you can’t pass. Instead, they simply signify that passing the CPA Exam requires a lot of time, effort, and focus. So, if you’re ready to commit to that, you can pass it.

Challenging exam

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 representative task:

CPA Exam Skill Levels

(Lowest to Highest)

Skill Level Definition
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. Furthermore, the CPA Exam intends to prove that you have the abilities of a CPA. Because you can acquire these skills on the job and from using a CPA review course, you don’t need to fear. Rather, you just need to put the work in.

Strict exam time limit

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. Therefore, you technically have 18 months to pass the remaining 3 sections. If you don’t pass the rest of the exam during this time period, you will lose credit for the first section you passed. At that point, 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. In the process, it will always cut off credit for your oldest passed section and also shift the start of the window to the time you passed your second oldest section. This time limit may sound intimidating, but it is actually more time than you need. That’s because 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.

Step 4. Perform a Cost-Benefit Analysis

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. Thankfully, 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. As you recall, the most practical and tangible certification benefit would be the increase in salary. This advantage 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.

Step 5. Meet the CPA Education Requirement

As I’ve pointed out, 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. Furthermore, the state boards prefer your degree to 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. However, you can’t secure the CPA certification until you’ve extended your education to 150 credit hours (the equivalent of a master’s degree). Thankfully, there are several ways in which you could earn all the credits you need to meet this CPA requirement:

  • Acquire all the necessary hours at the undergraduate level
  • Get your bachelor’s degree and take additional classes at the graduate level
  • Get a master’s degree in accounting from a 5-year accounting program
  • Combine an undergraduate degree in accounting with a master’s degree in a different discipline
  • Combine an undergraduate degree in a different discipline with a master’s degree in accounting
  • Earn an MBA with an accounting concentration

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 fulfil them.

Step 6. Register for the CPA Exam Sections

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, and its official name is the Uniform CPA Examination.

The AICPA administers this computer-based examination covering intermediate/advanced accounting. The exam also addresses related fields such as business, law, and taxation. The 4 exam sections take on a wide range of topics within these areas. The exam sections also include 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 5 testlets, all of which you must complete in 4 hours.

                                                                                                            CPA Exam Format

Testlets Auditing and Attestation (AUD) Business Environment and Concepts (BEC) Financial Accounting and Reporting (FAR) Regulation (REG)
1: MCQs 36 31 33 38
2: MCQs 36 31 33 38
3: TBSs 2 2 2 2
4: TBSs 3 2 3 3
5: TBSs/WCs 3 TBSs 3 WCs 3 TBSs 3 TBSs

 I know that 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 most comfortable with and then build your CPA Exam schedule out from there.

The exam is available to take every weekday during the following CPA Exam testing windows:

  • January 1 to March 10
  • April 1 to June 10
  • July 1 to September 10
  • October 1 to December 10

You can sit for any exam section during any testing window. Furthermore, you don’t have to sit for each exam section in consecutive testing windows so long as you pass all 4 sections within 18 months. But, you can also sit for more than 1 section in a testing window. In fact, if you’re feeling confident enough, you can even take all 4 sections within the same testing window.

Step 7. Locate the Closest Testing Center and Schedule the Exam

Upon successful registration, you will receive a document known as your Notice to Schedule (NTS). It includes a launch code that you must use to schedule testing appointments. You will also need this document to test on exam day, so you must not lose it.

Then, you have to schedule your CPA Exam testing appointments at the Prometric website. Prometric is a company that runs testing centres for the CPA Exam and many other computerized professional exams.

You are allowed to register in one state and physically take the exam in another state. Also, international candidates can sit for the exam at the CPA Exam international sites. These sites include Bahrain, Brazil, Kuwait, Japan, Lebanon, and the United Arab Emirates. International candidates can take the exam at these sites as long as they are citizens or long-term residents of those (or adjacent) countries.

Step 8. Prepare for the CPA Exam

The AICPA has provided a free introduction to the CPA Exam in the form of the CPA Exam Sample Tests and Tutorial Topics. The tutorial leads you through the features and functionality of the exam. Then, the 4 sample tests let you interact with perfectly accurate recreations of each exam section. These recreations include examples of all the question types on the exam. Also, you can actually answer these example questions. Additionally, you can even see the correct answers to these questions.

To improve your chance of CPA Exam success, I highly recommend that you use a CPA review course to study for the exam. The most popular courses on the market include both online and offline materials. They also supply tons of practice questions, offer extensive customer support, and boast high pass rates. Therefore, you can prepare for the exam much more efficiently and effectively when you rely on a CPA review course.

Step 9. Take the Ethics Exam

After you pass the CPA Exam, you may also have to pass a CPA ethics exam depending on your state board’s requirements. Most state boards require candidates to pass some form of an ethics exam, whether it be the AICPA’s version or a version created by the state. Either way, the ethics exam is a self-study open book test that is much easier than the CPA Exam.

Step 10. Gain Relevant Work Experience

Most states require you to have 1 – 2 years of professional accounting experience in order to obtain the CPA license. If you are already a working accountant or a student with an accounting job waiting for you after graduation, then fulfilling this requirement will simply involve keeping your job and being patient.

However, if you do not plan to work in a public accounting firm or don’t plan to work in the U.S., you need to be aware of 2 things. First, a few state boards have strict CPA experience requirements and only recognize public accounting experience. Second, for most states, a practising CPA (i.e., an active CPA license holder instead of a certificate holder) must supervise and/or verify your experience. So, you must make sure that your boss meets this qualification.

 

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