Becoming a CPA can get you a salary of $50 K per year or more. What’s more, you can look forward to lucrative benefits as well as a wide range of career options.
Are you interested in crunching the numbers during your daily grind? You’ll need to earn your CPA qualification first. Here’s how to become a CPA, increase your career outlook, and climb to the top of the accounting ladder.
Requirements for Becoming a CPA
Each state has its own rules and regulations when it comes to achieving your CPA. So step one is finding out what’s required in the locality where you live or intend to work.
Like any degree, you’ll need to meet certain educational standards to enroll for the first stage of your CPA qualification. This involves achieving an accounting degree.
Often, you can achieve a bachelor’s degree in another course and then add on the necessary accounting courses to complete your master’s degree.
You’ll also need to accumulate some experience before you can further your education to become a CPA. You can meet your credit-hour targets while studying toward your degree, or via graduate school programs.
Again, each state has certain standards regarding this – usually involving 1 year of working under a licensed CPA. You can look up the requirements for your location on the NASBA website, and keep track of your progress.
The best place to gain the necessary experience is by finding a job with a public accounting firm.
These businesses provide tax, auditing, and consulting services to clients. This makes them a good choice for gaining all-around experience in accounting.
Passing the CPA Examination
You must apply for and pass a difficult examination to complete your CPA qualification. Four official bodies administer these exams, namely:
- AICPA – American Institute of Certified Public Accountants
- NASBA – National Association of State Boards of Accountancy
You can fill in an online application form and submit the necessary documentation to get the process started.
Upon verification of your qualification and experience, you’ll receive an NTS (Notice to Schedule), valid for six months. With this in hand, you can schedule your CPA Exam.
This CPA exam involves four sections that test your knowledge as follows:
Auditing and Attestation (AUD)
This section covers the types of communications that auditors engage in with outside parties. These include:
- Arranging the circumstances for an adequate audit
- Explaining unqualified and qualified opinions
- Describing client responsibilities
- Hiring and handling outside experts
- Communicating with successor auditors
- Handling client – auditor disagreements
- Reviewing work papers
Business Environment and Concepts (BEC)
This exam covers the CPA’s role in a business environment. It includes things like:
- Corporate governance
- Economic concepts and analysis
- Financial management
- Information technology
- Operations management
Financial Accounting and Reporting (FAR)
This is one of the most difficult and comprehensive sections of the CPA exam. It consists of elements like:
- Conceptual framework, standard-setting, and financial reporting
- Selected financial statement accounts
- Selected transactions
- State and local governments
This section has two main segments, namely business law and federal tax. Topics include:
- Ethics, professional responsibilities, and federal tax procedures
- Business law
- Federal taxation of property transactions
- Federal taxation of individuals
- Federal taxation of entities
You can study for this challenging exam via online self-study, which is an ideal solution for those who work full time. Many of these courses offer real-time engagement with professors or in-person review sessions to assist you with difficult sections.
You must pass all four tests within 18 months and most CPAs spend between 200 and 400 hours studying for this exam.
Finalizing your CPA Certification
Once you’ve passed your CPA exam, you have one last task to complete before you can start practicing as a CPA. That is, achieving your CPA license.
In some states, you’ll still need to pass an ethics exam to achieve your license. In most cases, you must engage in Continuing Professional Education (CPE) to maintain your license.
Continuing Education for CPAs
In addition to your college degree, all states require CPAs to complete a certain number of continuing education hours each year. Usually, this involves 120 hours of study for every three years of practice.
You can earn CPE credits by studying any of the following topics:
- Business law
- Finance and financial planning
- Governmental accounting and auditing
- Information Technology
- Management services
- Regulatory ethics
Other worthwhile courses include those involving human resources, behavioral ethics, business management, or personal development.
Finding CPA Jobs
Many CPAs simply accept a promotion at their existing workplace once they’ve completed their CPA qualification. You can also look for jobs in the following fields:
- Forensic accounting
- Management accounting
- Cost accounting
- Government accounting
Modern business places a high emphasis on outsourcing professional services remotely, or work from home initiatives. That means you could also earn a living working as a freelance CPA once you’re qualified.
According to https://www.taxfyle.com/freelance-cpa-jobs, you may even earn more working as a freelance CPA than in an ordinary day job.
Some of the in-demand skills employers look for when hiring CPAs include:
- Tax skills
- Business acumen
- Presentation skills
- Technical ability
- Emotional intelligence
- Management and leadership skills
Any extra auditing training will come in handy too.
Planning Your Bright Future
It’s no walk in the park becoming a CPA, but you can look forward to a lucrative and rewarding career when you decide to go this route. That’s especially true if you enjoy helping people solve problems with your sterling mathematical skills.
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