A CPA is a trusted financial adviser, who has passed the CPA exam and met the required education and work experience before being licensed, many names in different states know CPA.
Becoming a CPA (Certified Public Accountant) takes years of education and professional accounting experience as well as months of dedication to passing the exam. Still, it’s completely worth it, though; In this article, we will be learning more about CPA.
What is CPA?
CPA stands for Certified Public Accountant, is a designation or a title given by AICPA (American Institute of Certified Public Accountants) to every individual who passes the uniform CPA examination and meets the education and experience requirements.
History of CPA
The American Institute of Certified Public Accountants (AICPA) was formerly formed as the American Association of Public Accountants (AAPA) in the year of 1887, consisting of just 31 accountants.
The Institute of Public Accountants then succeeded in this Association. As a result, It had a membership of 1,150.
The name changed to the American Institute of Accountants in 1917. Later in 1927, the American Society of Certified Public Accountants was formed, which merged with the Institute in 1936, leading to the formation of AICPA (American Institute of Certified Public Accountants).
The AICPA was establishing Accounting standards until 1973 when the Financial Accounting Standards Board (FASB) came into the picture.
Roles and Duties of Certified Public Accountant
A CPA has a variety of jobs and tasks in a public and private accounting firm, let us take a look at a few of those functions.
1. Auditing and Review
It is probably one of the main jobs a CPA performs in public accounting, which is auditing the client’s financial statements and disclosing it with an opinion of whether any misstatements found in the material.
It is required by the SEC (Securities and Exchange Commission) to have CPA audit their financial statements before issued to shareholders.
2. Tax Preparation
It includes preparing different types of client tax forms like property taxes to income taxes
3. Consulting services
CPAs also engage in different types of consulting services, like helping the clients identify business problems and effective and efficient running of their operations.
4. Forensic Accounting Services
Sometimes CPAs are hired to trace some fraudulent activities that recovered, or any stolen money, etc.
5. Financial Planning and Business Valuation
They often engage in advising clients by providing the information and suggestions of business and financial activities like selling shares and transferring it to another person and notifying about tax ramifications and succession planning.
6. Litigation Services
They are often used by attorneys in the courtroom, mostly prevalent in divorce proceedings, bankruptcies, and business mergers/acquisitions.
7. Company Management
They understand finance, operations, law, and profitability maximizations, So they make excellent managers.
8. Company Executives
It’s common for a company to hire a Certified Public Accountant as the CEO, CFO, or COO because they understand how the company functions.
9. Non-Profit Organization
These non-profit organizations need the CPAs the most because they are the ones who can give the best guide on how to use their minimal funds.
10. Government and Education
The government and education sector offers a variety of job like the IRS, FBI, and most of the accounting professors at universities are CPAs
Why should you become a CPA?
You can make more money than their counterparts; On average, CPAs could make 1million dollars more than the non-certified peers.
You get better opportunities; public firms will allow you to advance up the hierarchy into senior positions, leading you to become a partner too.
You get a Stable career; The fact is that CPAs and accountants are always in demand.
CPAs have people's respect, people know how difficult it is to become a CPA, and they respect you because of it.
Also Read: CMA vs. CPA
How to become a CPA?
Becoming a CPA is one of the toughest things as well as the most rewarding experience that you will make in the accounting career; here are few steps that help you in achieving your desire to become a CPA.
Step 1- Fulfill the Educational requirements
Educational requirements differ from state to state, but most require you to have at least a bachelor’s degree to be eligible for the exam. Typically, the applicants should have had at least 24 credit hours in auditing, taxation, and accounting education, along with that 30 credit hours of finance, business law, and management.
Step 2- Apply for the CPA exam
First, you will need to get your educational requirements verified by your state board of accountancy. Once approved, you will be able to apply for the exam,
For more visit, The CPA application process.
Step 3- Get a Review Course and start the preparation.
Choose a CPA review course that suits your learning style, schedule, and budget.
Step 4- Pass the CPA Exam
The exam scored on a scale of 1-99. Candidates must get a score of 75 or higher to pass each section; The CPA exam tested during four test windows basis
For more visit, a Four-test window
Step 5- Pass the AICPA Ethics Exam
Once you have passed all four sections of the exam, you will have to take a short ethics exam, which is not mandatory in all states. All you have to do is read the ethics book given mailed by the exam authority and take the test online.
Step 6- Fulfill your Work Experience requirement
Once after both the CPA and AICPA ethics exams, you will need to have work experience. They may range between 6 months and two years under the direct supervision of a CPA. Some states may require you to have at least one year of auditing experience.
Step 7- Pay your dues and get your license.
After you fulfill the work experience requirement, all you have to do is pay your state board licensure fees and wait for your certificate. It takes 2-3 weeks via mail. Are you still wondering about the different types of degrees and courses available to pursue in Accounting?. Job concentrations to venture out to have a bright future career? Don't fret it employment of accountants and auditors projects to grow 6 percent from 2018 to 2028
Read more about it on how to become an accountant
CPAs have a wide range of career options available, either in public or corporate accounting. Individuals with the CPA designation can also move into executive positions such as controllers or chief financial officers (CFOs). CPAs are known for their role in income tax preparation but can specialize in many other areas, such as auditing, bookkeeping, forensic accounting, managerial accounting, and information technology.