Learn About Being a CPA (Certified Public Accountant)
What does a CPA do?
A certified public accountant, or CPA, is a finance professional who has passed the CPA exam and helps individuals, organizations and businesses interpret and communicate their financial data. CPAs assist with managing expenses, investments, taxes, audits and planning and reaching financial goals. A CPA license is the most sought-after accounting credential and provides many employment options, including working for individual clients, for small or large businesses, as a chief financial officer of an organization, for the government or non-profit organizations. A CPA can provide auditing and taxation services that a regular accountant cannot, including auditing public companies, signing tax returns and submitting reports to the Securities and Exchange Commission. They are considered to be financial experts. Responsibilities of a certified public accountant include:
- Preparing financial statements
- Preparing and filing local, state and federal tax returns
- Working with clients to minimize tax obligations
- Representing clients during audits
- Filing reports with the Securities and Exchange Commission (SEC)
- Auditing financial information and submitting official reports
- Managing clients’ financial activities, such as cash flow, budgeting, general accounting and financial planning
- Directing a team of accountants or an accounting department
- Advising clients on investment practices
- Estate planning
- Consulting with clients to identify issues or risks and help them manage their businesses effectively
- Acting as expert witnesses in legal cases, such as bankruptcies, mergers, acquisitions or divorce proceedings
CPA salaries vary depending on their employer, experience and location. For the most up-to-date salary information from Indeed, click on the salary link.
- Common salary in the U.S.: $80,633 per year
- Some salaries range from $23,000 to $161,000 per year.
Becoming a CPA requires certain education, certification and skills:
Aspiring certified public accountants need to earn at least a bachelor’s degree. Sometimes additional courses are necessary since some states require 150 semester hours to sit for the CPA exam, and a traditional bachelor’s program requires 120 hours to graduate. CPAs can take additional classes to meet this requirement or earn a master’s degree. Many universities offer a five-year combined bachelor’s and master’s program in accounting or finance that is a good option for aspiring CPAs.
Typically, required courses include accounting principles, business ethics, business management, finance, statistics and economics. Advanced courses include specialized account topics, such as tax planning, financial controls, accounting theory and cost accounting.
Once an individual earns their CPA license, they must also complete continuing education to renew their license regularly. Different states have different requirements, but up to 40 hours per year is a typical standard.
Besides education, CPAs need fairly extensive training before they can earn their license. They need to be familiar with all the common duties of accountants, such as using accounting software and spreadsheets, preparing tax returns, auditing practices and verifying financial documents. Requirements differ by state and can vary from needing six months to two years of accounting experience before you can get an official CPA license. This experience can be gained in the accounting department of a business or any private or public accounting firm.
All states in the U.S. require accountants to fulfill CPA licensing or certification requirements to become certified public accountants, but each state has its own governing board, so these requirements vary. Typical requirements include:
The American Institute of Certified Public Accountants (AICPA) created the four-part CPA exam. Once an applicant takes the first exam, they have 18 months to complete the remaining three. The exams are scored on a scale from zero to 100, and candidates have to score at least a 75 to pass. To be eligible to sit for the exams, an applicant has to first prove that they have fulfilled their educational requirements to the state board. The four exams are on auditing and attestation, financial accounting and reporting, regulation and business environment and concepts. They can be taken in any order. After passing the exams, a CPA license is not issued until the work experience requirement has also been fulfilled.
CPA Ethics Exam
Some states require an additional exam on ethics, also provided by the AICPA. This is usually taken online after passing the CPA exam.
After passing the required exams and earning the required work experience, candidates can apply to their state board for an official CPA license. There is a fee for the license and continuing education is required to renew it each year. Check with your state board of accountancy to find out what the particular requirements are in your area.
CPAs can also further their skills and professional qualifications by joining professional organizations, including the International Federation of Accountants, the Institute of Management Accountants, the National Society of Accountants, the American Institute of CPAs, the Institute of Internal Auditors and the American Accounting Association. These organizations usually provide continuing education opportunities.
Certified public accountants need various hard and soft skills to succeed in their role:
Leadership: CPAs are often the managers of an accounting department or the senior employees of an accounting firm. They may be tasked with supervising a team of accountants and need strong leadership skills to oversee and direct the activities of an accounting team.
Communication: Clear written and verbal communication skills are necessary for a CPA to submit efficient reports and to communicate with clients regarding important financial matters.
Ethics: These professionals need to have high ethical standards since they work closely with their clients’ finances. CPAs need integrity and honesty to maintain their clients’ trust.
Project management skills: CPAs often have strict deadlines for large and important projects, such as filing tax returns on time or submitting quarterly fiscal reports. They need the ability to plan, execute and submit projects within a certain timeframe.
Technological proficiency: Besides frequently using email, spreadsheets and accounting software, CPAs need to be familiar with emerging technology to understand its impact on their clients’ businesses and financial prospects.
Analytical and research skills: CPAs need to compile, analyze and interpret data, including comparing reports and understanding complicated spreadsheets.
CPA work environment
Most certified public accountants work in offices, although they can also work independently from home. They might travel to court to testify as an expert witness or to other businesses to perform audits. They typically work full-time office hours but may need to work overtime during especially busy times of the year, such as tax season.
Although some of their time is spent meeting with clients, CPAs spend most of their day sitting in their offices, working on computers and with paper forms. They need to be familiar with typical office equipment, such as phones and copy machines, besides having good computer skills.
How to become a CPA
Follow these steps to become a certified public accountant:
Look up your state’s requirements. Since each state in the U.S. has its own governing board of accountancy, you will need to verify what the requirements are in your desired area of employment, including the necessary education, experience and exams.
Earn a degree. Although the required number of credit hours varies, you typically need to earn at least a bachelor’s degree to qualify for a CPA license. Some states require a certain number of courses in particular subjects, such as auditing, attestation and accounting.
Take the CPA exam. You can sit for the four required CPA exams either before or after you complete your required work experience. You will need to apply to your state board and schedule the exams within an 18-month period. You may also need to pass the CPA ethics exam.
Gain relevant experience. You will have to fulfill your state’s experience requirements before you can receive an official CPA license. Some states require a certain number of hours of experience in specific areas, such as auditing or preparing tax returns.
Apply and pay for your license. After you pass the exams and gain the necessary experience, apply to your state board for a CPA license. You will have to pay a licensing fee.
Create a resume. List your certifications and professional affiliations and your highest level of education, experience, skills and requirements. Use keywords from job descriptions to tailor a cover letter to each open position.
Continue your education. To maintain your CPA license, you will need to fulfill your state’s continuing education requirements. Joining a professional organization for accountants can assist with this requirement.
CPA job description example
Lyon Accounting & Investment Firm is seeking a senior certified public accountant to join our team. The CPA will oversee a team of 10 accountants besides meeting with clients to discuss their goals. Duties include preparing financial reports, performing fiscal analyses, auditing and approving tax returns. We expect all our employees to have the highest level of integrity and maintain our clients’ confidentiality. A CPA license and two years of accounting experience are required, but five years of experience as a CPA is preferred.
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