What Is a Certified Public Accountant?

By Indeed Editorial Team

Updated July 19, 2022 | Published February 25, 2020

Updated July 19, 2022

Published February 25, 2020

Related: A Day in the Life of an Accountant

In this video, we follow Ektaa, a tax accountant working for a family-owned accounting firm, as she shares the skills and education needed to be a successful accountant.

If you enjoy working with numbers or are interested in the finance industry, you might consider becoming an accountant. These professionals help businesses and individuals with a variety of financial needs. There are several types of accountants, with the highest credential typically considered becoming a certified public accountant. In this article, we explain what a certified public accountant is, what they do and high-level positions for CPAs as well as how to become one.

Related: Your Guide to Careers in Finance

What is a certified public accountant?

A certified public accountant, or CPA, is a financial expert who has passed the CPA exam. CPAs assist businesses, organizations and individuals to understand, record and communicate their financial data.

A CPA can provide auditing and taxation services that a regular accountant cannot. Their certification enables them to audit public companies, sign tax returns and submit official reports to the Securities and Exchange Commission (SEC).

A CPA license is the most sought-after accounting credential and provides many employment options, including working for small or large businesses, for individual clients, for the government, for non-profit organizations or as the chief financial officer of an organization.

Related: Chartered Accountant vs. Certified Public Accountant: What Is the Difference?

What does a CPA do?

CPAs have a wide variety of duties, including managing expenses, investments, taxes, audits and helping clients to plan and reach their financial goals. Some responsibilities of a certified public accountant include:

  • Consulting with clients to identify issues or risks and help them manage their businesses effectively

  • Working with clients to minimize tax obligations

  • Acting as expert witnesses in legal cases, such as bankruptcies, mergers, acquisitions or divorce proceedings

  • Representing clients during audits

  • Advising clients on investment practices

  • Managing clients' financial activities, such as cash flow, budgeting, general accounting and financial planning

  • Preparing financial statements

  • Preparing and filing local, state and federal tax returns

  • Auditing financial information and submitting official reports

  • Managing a team of accountants or an accounting department

  • Filing reports with the Securities and Exchange Commission (SEC)

Average CPA salary

CPA salaries can vary depending on their employer, experience and location, but the national average salary for a certified public accountant in the United States is $72,129 per year. Some salaries range from $20,000 to $156,000 per year.

Jobs for certified public accountants

There are many different roles in the field of accounting and finance. Here are five higher-level positions usually filled by CPAs:

  1. Senior Financial Analyst

  2. Director of Finance

  3. Corporate Controller

  4. Chief Financial Officer

  5. Vice President of Finance

1. Senior Financial Analyst

National Average Salary: $87,057 per year

Primary Duties: A senior financial analyst reviews a company's financial status and creates plans and recommendations for improving its financial health, such as lowering costs, adjusting budgets and using financial forecasts. They prepare, review and create financial reports for the company's management and sometimes for the public. Nearly every industry employs financial analysts. A senior financial analyst position requires at least a bachelor's degree and some experience.

Read more: Learn About Being a Financial Analyst

2. Director of Finance

National Average Salary: $96,192 per year

Primary Duties: The finance director of a company works with managers and employees to develop financial plans, budgets and company-specific accounting practices. They are responsible for directing financial policies, overseeing all financial departments of the company and reporting to the vice president of finance or C-suite executives. A director of finance position usually requires a master's degree and significant accounting experience.

Read more: Learn About Being a Director of Finance

3. Corporate Controller

National Average Salary: $111,557 per year

Primary Duties: A corporate controller is an expert account manager who ensures all the billing, budgeting, financial reports and tax preparation is done properly in a large company. It is their responsibility to maintain the day-to-day financial operations and integrity of a company. The requirement for this position is often a Bachelor's Degree in Accounting or Business, but some companies may expect a master's degree.

4. Chief Financial Officer

National Average Salary: $126,537 per year

Primary Duties: A chief financial officer, or CFO, is the highest-level financial executive of an organization. They oversee all of the financial aspects of a company and manage other accountants. They create long-term financial plans and budget goals to ensure a company's financial well-being and ensure the company's compliance with all financial regulations. A CFO reports to other C-suite executives and the board of directors about the financial status of the company. Obtaining a position as a CFO requires extensive experience and experience as an accountant.

Read more: Learn About Being a CFO (Chief Financial Officer)

5. Vice President of Finance

National Average Salary: $152,387 per year

Primary Duties: A vice president of finance is the link between C-suite executives and lower management roles in a company. They are responsible for communicating financial plans and concerns as well as managing the budget, creating financial plans and financing debts. A Master's Degree in Accounting and significant experience is often a requirement for this role.

How to become a CPA

You can use these steps to become a certified public accountant:

  1. Research CPA requirements in your state.

  2. Earn a degree.

  3. Complete experience requirements.

  4. Take the CPA exam.

  5. Apply for your license.

  6. Maintain certification.

1. Research CPA requirements in your state

Each state in the U.S. has its own governing board of accountancy, so you will need to research the requirements to become a CPA in your area. The necessary education, experience and exams to become a certified public accountant can vary by state.

2. Earn a degree

Although the required number of credit hours to qualify for the CPA exam varies by state, you typically need to earn at least a bachelor's degree. Some states require a certain number of courses or hours in areas like auditing, attestation and accounting, or may require more than the number of credit hours it takes to graduate with a bachelor's degree.

Courses you should take to major in accounting include accounting principles, business ethics, business management, finance, statistics and economics. Advanced courses include specialized accounting topics, such as tax planning, financial controls, accounting theory and cost accounting.

You can choose to pursue a Master's Degree in Accounting or in Business Administration with a focus on accounting practices to increase your knowledge, skills and employability.

Related: The 10 Best Master's Degrees for Finding a Job

3. Complete experience requirements

You will have to satisfy your state's experience requirements before you can receive an official CPA license. They might require anywhere from six months to two years of experience before you can qualify for the exam. Apply for entry-level accounting jobs to begin gaining experience. Some states require a certain number of hours of experience in specific areas, such as auditing or preparing tax returns.

Become familiar with all the common duties of accountants, such as using accounting software and spreadsheets, preparing tax returns, auditing practices and verifying financial documents.

Related: Learn About Being an Accountant

4. Take the CPA exam

Every state in the U.S. requires accountants to fulfill CPA licensing requirements in order to become certified public accountants, but these requirements can vary since each state has its own governing board. However, the typical requirements include taking a four-part CPA exam.

To take the exam, you first have to contact your state board with proof that you've completed the educational requirements. You can take the exam before finishing the experience requirements, but your license won't be issued until that is completed as well.

The CPA exam is created by the American Institute of Certified Public Accountants (AICPA). Once you take the first exam, you have 18 months to complete the remaining three. The four exams are on auditing and attestation, financial accounting and reporting, regulation and business environment and concepts. You can take them in any order.

Some states also require an exam on ethics, which is provided by the AICPA as well. This is usually taken online after passing the CPA exam.

5. Apply for your license

After you pass the exams and gain the necessary experience, you can apply to your state board for a CPA license. There is a fee to obtain the license.

Related: 16 Accounting Jobs That Pay Well

6. Maintain certification

To maintain your CPA license, you will need to meet your state's continuing education requirements. Joining a professional organization for accountants can assist with this requirement, as organizations frequently offer events and courses for this purpose. Common organizations for CPAs to join include:

  • The American Accounting Association

  • The National Society of Accountants

  • The American Institute of CPAs

  • The International Federation of Accountants

  • The Institute of Management Accountants

  • The Institute of Internal Auditors

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