Certified Public Accountant (CPA) certification

  1. CPA certification

What is the CPA certification?
The Certified Public Accountant certification, or CPA certification, is the U.S. state-licensed credential for qualified accountants or professional financial advisors. The state-issued CPA credential authorizes the holder to advertise and act as a CPA within the state’s jurisdiction. The CPA credential is issued in 55 U.S. states or territories.

The CPA credential ensures that accounting professionals have met appropriate state-determined levels of education and experience. As such, the CPA is the highest-standard credential for U.S. accountants.

To ensure high standards, licensed CPA’s are required to meet yearly CPE (Continuing Professional Education) targets in order to keep their qualification active.

Who is the CPA certification for?
It takes a certain type of individual to enter the world of accounting in the first place. The role lends itself to detailed oriented individuals with good organizational and analytical thinking skills. The CPA certification itself is for such individuals who wish to pursue a high-level career in accountancy and specialize in areas such as taxes, compliance, financial reporting and auditing.

Typical job descriptions include (but are not limited to):
  • Internal Auditor
  • Forensic Auditor
  • Management Accountant
  • Environmental Accountant
  • Tax Accountant

Generally speaking, CPA’s have a wide variety of career options available.

What are the salary expectations for a CPA ?
The salary that a CPA can expect obviously varies depending on the specific job role, the level of experience the CPA brings, and the location of the job. Some estimates however, place candidates with a CPA credential at a 10% salary advantage over their non-CPA counterparts, not to mention the greater career opportunities that the CPA credential also offers.

For an overview of salaries in the financial sector, download the Accounting and Finance Salary Guide (2014) here.

Are there any prerequisites for the CPA certification?
Although the regulations vary from state to state, candidates will be typically required to hold a U.S. bachelor’s degree with a concentration in accounting, in addition to one further year’s study (undergraduate or graduate level). This 150 hour semester rule is a requirement for many of the state Boards of Accounting. Candidates should check the respective board rules in their area.

There may also be a relevant work experience requirement required by the individual state’s Board of Accountancy.

How do I obtain the CPA certification?
Because each state or territory has the right to develop their own CPA path there are slight variations from state to state, however the basic process is the same:
  • Apply to take the Uniform Certified Public Accountant exam
  • Pay the applicable exam fees
  • Receive notice to schedule
  • Schedule your exam
  • Take the exam
  • Receive the exam score

Candidates must first apply (and pay the appropriate fees) to sit one or more of the four sections of the Uniform CPA exam according to the applicant’s respective State requirements. A candidate must be declared eligible, and licensed, to sit the exam by the Board of Accountancy in an individual state or territory.

Once accepted to sit the exam, the candidate will receive a NTS (Notice to Schedule) document that permits them to take one or more of the CPA exams. These documents have an expiry date of between 90 days and 12 months from the issue date of the NTS, depending on the candidate’s location. The exam(s) must be taken within that time period.

With the NTS in hand, the candidate may book a time to take the respective exam. The CPA exams are only offered during the first two months of each calendar quarter (i.e. Jan, Feb; Apr, May; July, Aug; Oct, Nov). The candidate can take any or all sections of the examination during any calendar quarter and in any order. However, the candidate may not take the same section more than once during any one calendar quarter.

There are 4 different exams that candidates must pass to become CPA qualified. Once the first exam is passed, candidates have 18 months to complete all four exams.

As well as passing all four exams, candidates must complete 2 years of industry-related work experience under a qualified CPA before they can be awarded the CPA credential.

The CPA Exams
The CPA examination is a 14-hour, 4 exam process. The exams can be taken one at a time, and in any order, but all four must be completed within 18 months of taking and passing the first exam. The exams are:
  • AUD – Auditing and Attestation – 4 hours, 90 Multiple choice questions, 7 task-based simulations

  • BEC – Business Environment and Concepts – 3 hours, 72 Multiple choice questions, 3 written communication tasks

  • FAR – Financial Accounting and Reporting – 4 hours, 90 Multiple choice questions, 7 task-based simulations

  • REG – Regulation – 3 hours, 72 Multiple choice questions, 6 task-based simulations

The exams are the same regardless of the location or territory of the candidate.

Candidates should allow for slightly longer exam times to allow for logging in, survey questions, reading of instructions etc., however the actual testing time is as stated above.

Candidates must take their NTS (Notice to Schedule) into the exam as well as proper identification that matches the details on their NTS.

The passing score for each exam is 75 on a scale of 0-99. This does not represent a percentage scale however. More information about the passing score can be downloaded here.

After the candidate has completed the exam, the responses are forwarded to the AICPA (American Institute of CPA’s) for scoring. AICPA is the organization responsible for developing and grading the CPA exams. In turn, AICPA sends the candidate’s score to NASBA (National Association of State Boards of Accounting) which then sends the score to the appropriate Board of Accountancy. Candidates will only be able to obtain their exam score from their respective Board of Accountancy and the whole process can take weeks from the time the exam was taken. More information about the scoring process, pass marks and the exam results process can be found here.

What if I fail?
Candidates who fail any particular section of the CPA exam may apply to retake that exam in a future testing window (upon payment of the applicable fees). Candidates may not retake the exam in the same testing window. Candidates who fail the exam(s) will be provided with a detailed breakdown of their performance in the failed exam by content area and question type. This will aid in studying for the retake attempt.

What does the CPA exam cost?
As each state or territory sets their own CPA rules and regulations, the cost of the CPA exams differ based on the candidate’s location. In addition to the cost of the 4 exams (approx. $1000 combined), there are additional costs, such as the application fee and the certificate fee. Additionally, some states also require the candidate to pass an ethics exam. As a general rule of thumb, candidates should expect to pay in the region of $1000-1300. This doesn’t include the cost of training or review materials. Fees are generally required to be paid in advance.

International CPA Applications
The U.S. CPA credential is offered and administered in a number of overseas locations. Candidates from selected countries wishing to obtain the CPA credential may do so in their own country without the need to travel to the U.S.A. The application and exam process is essentially the same as offered in the U.S.

What are the CPA recertification requirements?
Once qualified as a CPA, individuals are required to maintain their credential through a Continuing Professional Education (CPE) program. This means that CPA’s must engage in continuing education in order to keep their CPA credential active. The CPE requirements can be vastly different from state to state and are subject to frequent changes. Individuals should check with their local Board of Accountancy for up-to-date information. CPA’s who do not complete the CPE requirements are not permitted to identify themselves as a CPA but for those individuals many states permit the use of the term ‘CPA Inactive’.

Where can I take the CPA exam?
The CPA exams are administered via Prometric. Bookings and schedules for the exams can be made via the Prometric website. Candidates must first have a valid NTS (Notice to Schedule) to book an exam.

Where can I find study resources for the CPA exam?
A great place to start for CPA study resources is to check out Amazon's Top 10 CPA resources.