Becoming a certified public accountant is a huge step forward in your professional career. Whether you want to work in public accounting, private industry, or governmental agencies, the CPA designation gives you instant creditability and professional respect.
CPAs often serve as C-suite executives, controllers, and other officers in public companies. They also perform audits of public companies and tax compliance for small and large businesses. Needless to say, certified public accountants play a big role in our society and as such there is always a big demand for their services.
The journey to become a CPA is often confusing and challenging. There are a number of different requirements and qualifications that you’ll need to complete along the way.
In this article, we’ll show you the step-by-step process to becoming a Certified Public Accountant.
5 Steps to Become a CPA
Here are the five steps to become a CPA and getting your certified public accounting license.
- Meet the Education Requirements
- Pass the CPA exam
- Complete the Work Experience Qualifications
- Finish the Ethics Exam
- Apply for your CPA License
Step #1 – Education Requirements
Every state has different education requirements that CPA candidates must meet in order to qualify to take the CPA exam. Most states require candidates to complete a minimum of a bachelor’s degree including specific accounting and business courses.
The states with the strictest requirements require candidates to complete a total of 150 college credit hours before they can even sit for the CPA exam. Yes, that’s right. 150 college credit hours. Even though a bachelor’s degree is only 120 credits, you will need to take an additional 30 credit hours in order to qualify.
No state requires candidates to get a master’s degree, but most encourage it and give immediate approval to candidates with a master’s degree in accounting. Check with your state board for a detailed list of educational courses you need to take.
After you’ve completed your education requirements, you are ready to take the exam.
Step #2 – Pass the CPA Exam
The CPA exam is a right of passage. Every CPA has passed it and it has kept millions of would-be CPAs from becoming certified. It’s one of the most difficult professional exams with a pass rate of less than 50 percent.
It’s a grueling 4-part exam that you have to pass in an 18-month period of time. If you don’t pass a section, you will have to retake it until you do.
Most CPA candidates spend approximately 400 hours studying for the exam and the ones who don’t meet that quota typically end up failing. That’s why if you are serious about passing the CPA exam, you should study with the best CPA study materials for your learning style.
The only way to master all of the topics on the CPA exam is to use a study guide. There’s too much information on the exam to try to simply remember what you learned in college. You won’t pass. You need a focused study guide that will show you exactly what’s on the test and what you need to remember to pass it.
Once you pass the CPA exam, you start accumulating your work experience.
Step #3 – Work Experience
Every state requires CPA candidates to gain related experience before they are eligible to obtain their CPA license. This is a good rule because it gives candidates the time to mature and learn what it’s like to practice in the real world.
The CPA exam only tests you on academic knowledge. It doesn’t necessarily prepare you for all of the challenges of the working professionally as a CPA. For that, you need to gain experience.
Every state has different experience requirements. Some range from 1-year or 2,000 hours to 2 years with over 3,500 hours. While some states require candidates to practice in public accounting and perform auditing procedures, other states allow you to gain experience in academia teaching future CPAs.
Regardless what your state’s rules are, you will need to perform all of the duties under the direct supervision of a CPA in good standing. The supervising CPA will need to report your experience to your state board for approval.
After you have accumulated the necessary experience, you can complete the ethics exam.
Step #4 – Ethics Exam
In addition to passing the each of the four CPA exam sections, some states require candidates to pass an ethics exam. The AICPA ethics exam is the most popular one. This simple take-home exam can be completed online through the AICPA website.
It’s an open book test, but it is timed. You will only have 90 minutes to complete the entire test with a score of 90% or higher. If you don’t pass, you can retake it for an extra fee.
If you fail the exam three times in a row, you will no longer be allowed to take it online at home and you will need to contact your state board for additional testing requirements. Most states require you to take it at a Prometric testing center.
Once you’ve completed the ethics exam, you are ready to submit your CPA license application.
Step #5 – Submit Your CPA License Application
The last step to becoming a CPA is to submit your license application to your state board. Your license application is a simple form that requires the state to review your qualifications and issue a license to practice accounting publicly.
Your CPA license application should be submitted with the following documents:
- College transcripts
- CPA exam results
- Work experience reports
- Ethics exam results
- License application and fees
Chances are by this point your state board should already have your college transcripts and you exam results, but if you are applying in a different state or have updated results, you may need to send them again.
Typically, state accountancy boards review new applications every other week, so you shouldn’t have to wait too long to get your license approved.
That’s it. Now you are a certified public accountant!
Summary
Becoming a CPA is a difficult journey that typically takes candidates a few years to complete. Although it can be challenging, it is completely worth it. You will have the CPA credential for the rest of your life.
You will be more qualified for future promotions and more attractive for new highers. The CPA designation carries with it respect and reward. You’ll be able to use it throughout your entire career regardless the industry you choose to work.
If you’ve started your CPA journey, you’ve made a great decision!