Learn About Becoming a Certified Public Accountant

What Is a Certified Public Accountant?

A Certified Public Accountant (CPA) is an accounting professional who has met specific education, testing, and experience requirements set by their state. The CPA credential is one of the most recognized professional certifications in accounting and finance. According to the American Institute of CPAs (AICPA), there are approximately 650,000 active CPAs in the United States as of 2024.

CPAs perform a wide range of financial tasks, including preparing tax returns, auditing financial statements, consulting on business strategy, and helping individuals and organizations manage their finances. Unlike accountants without certification, CPAs have demonstrated they meet rigorous standards for knowledge and competency. They are also bound by a code of professional conduct and must follow strict ethical guidelines.

The CPA license is granted at the state level, which means each state has its own licensing board and requirements. However, all states follow similar fundamental standards. CPAs must renew their licenses periodically and complete continuing education courses to maintain their credentials. The requirements vary by state but typically involve completing 20 to 40 hours of continuing professional education each year.

CPAs work in various settings including public accounting firms, corporations, government agencies, and nonprofit organizations. Some CPAs also work independently as self-employed consultants or run their own accounting practices. The Bureau of Labor Statistics reports that accountants and auditors earned a median annual wage of $69,350 in May 2023, with CPAs typically earning at or above this range depending on experience and location.

Practical Takeaway: Understanding what a CPA is and what they do helps you determine whether this career path aligns with your interests. CPAs have more training and credentials than standard accountants, which often leads to greater career opportunities and earning potential.

Education Requirements for CPA Certification

To become a CPA, you must first complete specific educational requirements. Most states require that you earn at least a bachelor's degree from an accredited college or university. Your degree does not necessarily have to be in accounting, but you must complete specific accounting and business courses. These courses typically include financial accounting, managerial accounting, taxation, auditing, and accounting information systems.

Beyond a bachelor's degree, many states now require 150 college credit hours to sit for the CPA exam. This is equivalent to about five years of full-time study, or a bachelor's degree plus additional coursework. Some universities offer five-year combined bachelor's and master's degree programs that satisfy this requirement. Other students complete a bachelor's degree and then pursue a master's degree in accounting, business administration, or a related field. A few states still accept a four-year degree with a certain number of accounting courses, but the trend across all states is moving toward the 150-credit requirement.

The specific accounting courses you need often include intermediate accounting, advanced accounting, cost accounting, and tax accounting. You will also need courses in business law, business communications, and sometimes economics. The AICPA provides detailed information about course requirements because states follow their general framework, though individual state boards may have slight variations.

Beyond formal education, you should develop strong skills in mathematics, attention to detail, analytical thinking, and communication. Many accounting programs now incorporate technology training, including software used in real-world accounting practices. Your educational coursework will prepare you not just for the CPA exam but also for the technical knowledge you will need in an accounting career.

Practical Takeaway: Plan your college education with the 150-credit requirement in mind. If you are starting a bachelor's degree program, look for schools that offer accounting programs aligned with CPA requirements, and take advantage of any five-year combined degree programs that might save you time and money.

Understanding the CPA Exam

The Uniform CPA Examination is a standardized test required to become a CPA. It is administered by the AICPA and Prometric, a testing company. The exam is designed to measure whether candidates have the knowledge and skills needed to protect the public interest and practice as a CPA. The test is offered year-round at thousands of testing centers across the United States.

The CPA exam is divided into four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Reporting (FR), and Taxation (TAX). Each section is a four-hour computer-based test that includes multiple-choice questions and task-based simulations. The multiple-choice questions test your understanding of accounting concepts, while the simulations require you to apply that knowledge to realistic scenarios. You may take the four sections in any order, but most candidates complete them within an 18-month window.

To sit for the CPA exam, you must meet your state's educational requirements, which typically means having at least 120 college credit hours with specific accounting courses, though as mentioned, many states are moving to the 150-credit requirement. You must also register with your state's board of accountancy and pay examination fees. As of 2024, the total cost to sit for all four sections ranges from $600 to $1,000, depending on your state.

Passing the exam requires scoring at least 75 out of 99 on each section. According to the AICPA, the average pass rate for each section ranges from 40 to 50 percent. This means the exam is challenging and requires thorough preparation. Most candidates spend several months preparing, often using study materials, review courses, and practice exams. Many candidates also hire tutors or join study groups to improve their chances of passing.

Practical Takeaway: The CPA exam is substantial but conquerable with dedicated preparation. Start planning your study strategy months in advance, allocate sufficient time for each section, and use multiple study resources. Many candidates pass all four sections within 12 to 18 months of beginning their exam journey.

Work Experience Requirements

In addition to education and passing the CPA exam, you must complete a specified amount of work experience before you can receive your CPA license. Work experience requirements vary by state, but most states require one to three years of experience under the supervision of a licensed CPA or other qualified supervisor. Some states have more flexible requirements, allowing certain types of work experience to count even if you are not directly supervised by a CPA.

The type of work experience that counts is generally defined as work in accounting, auditing, taxation, management consulting, or other areas related to accounting and financial reporting. Many states focus on work that involves using accounting knowledge to serve the public interest, such as auditing, tax preparation, or financial statement preparation. Work experience in areas like bookkeeping, payroll processing, or general accounting functions may count, but the specifics depend on your state's board of accountancy rules.

Some states recognize what is called "broad experience," which may allow you to count diverse types of work in finance, accounting, and related fields. Other states have more narrow definitions and require your work to be specifically in accounting and auditing areas. You should contact your state's board of accountancy early in your career planning to understand exactly what work experience will count toward your requirements.

Work experience must typically be documented and verified by your supervisor or employer. You will need to provide details about your role, responsibilities, and the specific accounting functions you performed. Many candidates gain their required work experience while studying for the CPA exam, which means they can obtain their license relatively soon after passing all four exam sections. Some people take entry-level accounting positions at firms or corporations while completing their education and exam preparation, allowing them to satisfy both educational goals and work experience requirements simultaneously.

Practical Takeaway: Start considering work experience requirements early by researching your state's specific rules. Look for accounting positions that will count toward your experience requirement, and understand that this requirement does not necessarily delay your career—you can often meet it while studying for the exam and building your professional foundation.

Continuing Education and License Renewal

After you obtain your CPA license, your responsibilities do not end. All CPAs must complete continuing professional education (CPE) to maintain their licenses. These requirements ensure that CPAs stay current with changes in accounting standards, tax laws, technology, and best practices. The number of CPE hours required annually ranges from 20 to 40 hours depending on your state, with most states requiring around 40 hours per year.

Continuing education courses cover a wide range of topics including updates to Generally Accepted Accounting Principles (GAAP), changes to tax code, auditing standards, ethics, technology advancements in accounting software, and specialized topics relevant to different industries. Courses may