Your Complete Guide to Becoming a Licensed CPA

Money is stressful. When a person or company hires someone to handle it, they want to feel confident that their new financial guru is the real deal. Certified Public Accountants (CPAs) have the experience, education, and ethical fortitude to meet that expectation.

But what can earning a CPA license do for you and your career? If you’re not going into public accounting, is it really that useful? And if it is, what does it take to actually become a CPA?

Why Should You Get A CPA Certification?

Because of their advanced technical skills and strict adherence to ethical principles, CPAs stand out. In fact, many organizations require their high-level accounting administrators to be CPAs in good standing. But if you’re wondering whether you should pursue your own certification, here are a few ways it can help your career in the short and long term.

CPAs Can Perform Services That Other Accountants Can’t

Like regular accountants, CPAs can help organizations and individuals manage their daily financial affairs. This includes:

• Recording and organizing financial information.
• Analyzing trends.
• Making budgetary recommendations.
• Preparing tax documents.
• Performing internal audits.
• Ensuring all financial activities are compliant with local and federal regulations.

However, due to their training in the public sector, CPAs can do a few things regular accountants legally can’t like:

• Representing clients during IRS audits.
• Performing external and public audits.
• Preparing audited financial statements for the Securities Exchange Commission (SEC).

Non-profits, massive corporations, and individuals alike need people who can perform these specialized duties. So if you’re looking to make yourself more marketable and flexible in the competitive financial sector, becoming a CPA can be a great way to do so.

CPAs Can Hold a Variety of Advanced Accounting Roles

Despite the name, CPAs can be more than public accountants. Their in-depth knowledge and extensive training equips them to navigate public and private entities.

Some roles Certified Public Accountants hold include:

• Tax examiner
• Forensic accountant
• Budget analyst
• Comptroller
• Audit manager
• Compliance auditor
• Senior internal auditor
• Accounting director
• Reporting manager
• Chief Financial Officer

Outside of these technical and organizational leadership roles, many CPAs also go on to become tenured professors, researchers, and experts who lead audit committees that hold the corporate and government world accountable for more than just their finances.

Earning Potential Is High

Because CPAs typically have more training than their unlicensed counterparts, they can often leverage their skills for higher salaries.

For instance, the Bureau of Labor Statistics says that the median wage for all accountants is $77,250 as of their May 2021 employment survey. However, the top 10% of accountants often bring home more than $128,000 every year. With the prestigious CPA title after your name, you may very well come closer to earning this comfortable salary.

Similarly, the National Association of State Boards of Accountancy (NASBA) says accountants can increase their earning potential by 15% after earning a CPA license. While exact salaries change with industry, geographic location, and experience, this data paints a pretty positive picture for CPA hopefuls.

Your Career Possibilities Can Extend Outside of Traditional Accounting Roles

Though accountants can be found anywhere money moves, their job opportunities are seemingly restricted to accounting departments and the financial sector. For talented CPAs, this couldn’t be further from the truth.

A 2021 survey of accounting program graduates found that after 10 years, many accountants “move from technical accounting roles to well-paying leadership roles such as owner/president, vice-president, accounting firm partner, CEO/CFO, controller, or senior financial manager.” So even if your career goals extend beyond accounting, earning a CPA can be a great way to put yourself on the right trajectory.

The Traits of a Successful CPA

CPAs must, of course, have a mind for numbers. But in today’s economy, the corporate hierarchy isn’t as segmented as it once was so being a number cruncher isn’t often enough. Instead, successful CPAs have traits that put them at the very center of their organizations’ daily affairs — financial and otherwise.

Analytical

CPAs don’t just create reports and hand them in saying, “Here’s that information you wanted! Good luck!” They painstakingly pore over numbers and look for trends. They research how their clients’ or employers’ financial performance measures up to the market overall. Using their expertise, they can guide organizational policy and help executives plan for the future.

Tech-savvy

Business-as-usual is becoming increasingly complex. With the emergence of e-commerce, corporations are breaking into new markets faster than ever before. And with artificial intelligence, businesses of all kinds have vast amounts of unstructured data at their disposal.

So along with Excel and other traditional financial tracking tools, CPAs commonly use:

• Big Data analytics software — tools that harvest vast amounts of data. CPAs can use these tools to help executives figure out where the latest financial problems and opportunities are. Some tools focus on internal processes (operations, hiring, vendors, etc.), while others are focused on external data from consumers.
• Data presentation software — tools that visualize data with graphs. Whether CPAs work with large organizations or individual clients, they need to present their findings in a meaningful, accessible way.
• Real-time analytics software — programs that provide an up-to-the-minute snapshot of all financial activities. When CPAs are responsible for reconciling accounts, paying vendors, and creating trend reports, reviewing the most current information can expose potential issues.
• Cloud computing services — external data storage companies. Many companies now handle so much data that they often hire third-party cloud storage services to store it. CPAs need to know how to get the information they need from these massive databases.
• Automated AI programs — programs that automatically perform duties like invoicing, payment processing, and other repetitive tasks. Even when these processes are automated, CPAs may need to review, change, or generate reports about them periodically.

Ethical

The title of CPA comes with a lot of trust. Companies trust CPAs to adhere to all federal regulations and company policies. Individual clients trust CPAs to act impartially and with great care on their behalf. However, being ethical isn’t just a nice trait. It’s central to earning and maintaining a CPA license.

The American Institute of Certified Public Accountants’ (AICPA) strict code of conduct outlines topics like disclosing conflicts of interest, acting with due care, and maintaining client confidentiality. According to the site, many state regulatory boards have also adopted this code meaning unethical actions can endanger one’s license and may be punishable by law.

Management-minded and Organized

Whether you’re a public accountant being flooded with last-minute tax prep clients or a corporate accountant with a long list of projects, staying organized is top priority. High-level CPAs may even have entire departments under their supervision.

Collaborative

In large organizations, strategy hinges on finance. The marketing department needs direction when crafting new initiatives. Research and development teams build long-term goals based on the resources they have. And to attract investors, executives need clear, transparent information. It’s up to CPAs to package complex financial data in a way that all parties can use. In that sense, CPAs need to be some of the most dynamic and communicative people in the building.

CPA Certification

Because the CPA certification is so highly regarded, you’ll have to meet certain requirements to become one. These requirements are determined by two organizations: your state’s Board of Accountancy and the American Institute of Certified Public Accountants (AIPCA), the organization that administers the Uniform CPA Exam. Despite some variances between states, CPA certification is a relatively straightforward process consisting of earning a degree, passing an exam, and fulfilling experience requirements.

CPA Degree Programs and Courses

According to the AICPA, all future CPAs must complete a total of 150 college-level credit hours from a nationally or regionally-accredited school. This includes the 120 hours it typically takes to earn a bachelor’s degree plus 30 additional hours. How this is broken up is largely determined by each state’s Board of Accountancy.

For example, the AIPCA database says that to become a Certified Public Accountant in California, students must complete 24 hours of business-related classes, 20 hours of accounting, and 10 hours of ethics. However, their counterparts in New York must complete 33 hours in accounting topics like taxation and risk assessment as well as 36 hours in general business subjects like business law.

Given these requirements, some students major in accounting. Others major in another related subject but take on a concentration in accounting. To meet the 150 hour requirement, many students continue their studies at the Master’s level or complete an extended five-year bachelor’s program. Your path will largely be determined by your state’s regulations.

Undergraduate Curriculum

All states require CPAs to have bachelor’s degrees. But whether you major in accounting or an accounting-related subject, you should look for programs that meet your state’s curriculum requirements for licensure.

At the bachelor’s level, future CPAs often take classes like:

• Cost accounting
• Managerial accounting
• Auditing practice and theory
• Budget management
• Project management
• Business law
• Accounting information technology
• Statistics
• Ethics

Some schools even offer specialization tracks like tax accounting, forensic accounting, and public accounting. Taking electives in areas like these can help you discover what niche you’d like to go into.

Graduate Curriculum

If you’re eyeing upper-level positions or still need to take classes to meet your state’s licensing requirements, enrolling in a Master’s program can be a great option. At this level, you’ll likely take classes more in-line with your career goals that build on basic accounting principles. In most cases, a Master of Accountancy can be earned in 12 to 18 months.

Advanced topics covered at the Master’s level include:

• Managerial decision making
• Data visualization
• Tax compliance and other advanced taxation topics
• Fraud examination
• Information security
• Financial reporting
• Professional responsibilities

In addition to these courses, many Master’s Accounting programs also include classes on organizational leadership and data mining, management, and presentation.

The Uniform CPA Exam: How to Prepare and What to Expect

After fulfilling your state’s educational requirements, you’re likely ready to take the Uniform CPA Exam administered by the AICPA. In some states, you don’t need to complete all 150 hours to qualify, just the initial 120 hours. However, you will need to complete any additional educational requirements to apply for the actual license.

What to Expect from the CPA Exam

The Uniform CPA Exam is the same in every state. It’s made up of four parts that can be taken separately over an 18-month period and is administered by computer at approved sites in your state. The questions are a mix of multiple choice questions and task-based simulations. Each section is to be completed in four hours or less.

Test Topics: A New Format for 2024

Traditionally, the Uniform Exam consisted of four sections covering the four pillars of accounting. But as of 2024, the format will change. As of then, only three of the four sections will cover the field’s core principles:

1. Auditing and Attestation (AUD). This part covers responsibilities, general accounting principles, risk assessment, and forming conclusions and reporting.
2. Financial Accounting and Reporting (FAR). In this section, applicants answer questions about reporting, transactions, state and local government as it pertains to accounting, and common and uncommon items found in financial statements. It’s generally regarded as the toughest section.
3. Taxation and Regulation (REG). Along with testing students’ ethical prowess, this section includes questions about federal taxation, business law, property transactions, and taxation as it applies to individuals and entities.

For the fourth and final section, students can choose to be tested in one of three disciplines:

4. Business Analysis and Reporting (BAR). In this financial accounting-focused section, content covers business analysis, technical accounting, reporting, and state and local government regulations.
5. Tax Compliance and Planning (TCP). The TCP section assesses students’ knowledge of federal tax compliance and planning as it pertains to entities and individuals. Some content also covers property transactions.
6. Information Systems and Controls (ISC). This section focused heavily on technology as it pertains to auditing, advising, and reporting. Subsections include data management, security and privacy, and System and Organization Controls (SOC) Engagements.

By being able to choose which section to complete, students can test skills that align with their career goals and educational background. But no matter which discipline you choose, passing will make you eligible for a full CPA license in your state.

How to Prepare for the CPA Exam

While your education is a great start, the Uniform Exam is considered to be pretty tough. In fact, only about 44% of test takers passed the FAR section in 2022. Many would-be CPAs turn to test prep materials to give them an edge.

Exam prep materials like study guides and practice exams are available through a number of third-party companies, the AICPA, and accounting college programs. But along with these resources, don’t forget about traditional test prep methods like:

• Forming study groups.
• Breaking material down into smaller, more digestible pieces.
• Identifying your weaknesses.
• Creating a study plan or syllabus for yourself.
• Maintaining a healthy sleeping schedule and avoiding cramming.

Above all else, remember that the exam isn’t just about memorization. It’s about turning your knowledge into actionable, work-ready skills. For more information about scheduling, qualifying for, and taking your exam, consult the NASBA’s Candidate Bulletin.

Frequently Asked Questions About the Uniform CPA Exam

What Score Do You Need to Pass the CPA Exam?

Each section of the CPA Exam is scored from 0 to 99. A 75 is a passing score.

What Types of CPA Exam Questions Are There?

Each section of the CPA exam is made up of multiple-choice questions (MCQs) and task-based simulations (TBSs). For task-based simulations, students are presented with a problem and data in the form of graphs, correspondence, and financial documents. They’re like miniature case studies for students to work through.

How Many Types of Each Question Are in Each Section?

According to the AICPA’s Exam Blueprint, the question composition for each section is as follows:

• AUD Core Section: 78 MCQs and 7 TBSs.
• FAR Core Section: 50 MCQs and 7 TBSs.
• REG Core Section: 72 MCQs and 8 TBSs.
• BAR Discipline Section: 50 MCQs and 7 TBSs.
• ISC Discipline Section: 82 MCQs and 6 TBSs.
• TCP Discipline Section: 62 MCQs and 7 TBSs.

These numbers may be subject to change.

How Does CPA Exam Scoring Work?

To understand how CPA exam scoring works, it’s important to understand how it doesn’t work. First, exam scores are not percentages (a 75 doesn’t mean you got 75% of questions right). Secondly, they’re not raw scores, either (a 75 also doesn’t mean you answered 75 questions correctly).

Instead, the AICPA calculates scores using “formulas that take into account factors such as whether the question was answered correctly and the relative difficulty of each question.” Essentially, the AICPA realizes that some questions are harder than others and weighs them using a numerical scale. Much of the actual scoring process is automated but it’s also checked and verified multiple times before being finalized.

When Are CPA Exam Scores Released?

Scores are released throughout the entire year. The exact date depends on when the exam was submitted. Using the 2023 score release schedule as a reference point, scores are typically available one to two weeks after submission.

If I Fail a Section, When Can I Retake It?

The NASBA says test takers must wait at least 24 hours after receiving their scores to apply for a retake. However, you have to wait until the next testing window to actually take it again. Testing windows are typically three months long. They usually run from January through March, April through June, July through September, and October through December.

The Final Steps: Gaining Experience And Fulfilling Other State Requirements

Passing your Uniform Exam is a great accomplishment, but it’s not the last step before full CPA licensure. You may also need to gain real-world work experience while working under a licensed CPA. This amount of experience required varies between states.

But before you start job hunting, check with your local accountancy board about:

• Many states require CPA applicants to have 1 to 2 years of experience before licensure. Some count experience in hours (typically 1,800 to 2,000 per year) instead of years.
• Types of qualifying jobs. You’ll likely have to pick a job that involves putting your tax, consulting, attesting, and/or auditing skills to use. Similarly, some states have stricter rules about what types of jobs qualify (public versus private accounting jobs, for example).
• You may have to work directly under a CPA who will act as a mentor or advisor. This person may have to submit logs to the state board. In some states, your entire pre-licensure work experience must be logged and supervised. In others, you may only need to be supervised for a portion of it.

If you completed an internship or any form of academic work like research, writing, or teaching as a part of your education, those experiences may qualify, as well. On top of that, you may be required to pass a state-specific ethics exam and be a citizen and/or resident of the state you’re applying to.

One More Thing! Maintaining Your CPA License

As an essential part of the economy, society, and the gears of commerce, accounting is constantly changing. New economic trends call for new accounting skills. Technological advancements will change how you do even the smallest parts of your new job. To help CPAs keep up, the AICPA and local regulatory boards enforce continuing professional education (CPE) guidelines.

You’ll submit proof of your CPE credits to your local board of accountancy when you go to renew your license or sometime before. In most states, you’ll have to do this every one or two years. The AIPCA lists a diverse ways CPAs can earn their CPEs:

• Attending and presenting at webcasts and industry conferences.
• Self-guided study programs.
• Taking accounting or accounting-related courses.
• Preparing educational materials.
• Writing or contributing to publications.

Depending on your state’s regulations, the topics of these opportunities can cover anything from technology to sustainability to leadership. A certain number of CPEs may have to be directly related to accounting or topics like ethics. Qualifying courses can be found through the AICPA, the NASBA, qualifying third-party providers, colleges, and your state’s accountancy board.

U.S. Bureau of Labor Statistics salary and labor market information for Accountants and Auditors is based on national data, not school-specific information. Conditions in your area may vary. Data accessed May 2023.