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Obtaining the Certified Public Accountant (CPA) designation is an important achievement in the accounting and financial services industries. Contrary to popular belief, not all accountants are CPAs. The exact requirements for becoming a CPA vary from state to state. Practically speaking, though, there is little real difference among the states. You should still research the requirements for the state in which you wish to practice before proceeding with your post-college plans, just to be sure you will be able to meet or exceed them. Here is a short synopsis of each major step in the CPA licensure process:
Completing 150 Credit Hours of Postsecondary Academic Coursework
Most universities require somewhere between 120 and 130 credit hours of academic coursework for their students to graduate. Thus, even after students have likely qualified for graduation, they still have not completed the number of credit hours required to sit for the CPA exam. The additional academic credits required can be completed in any one of a few different ways. Some students choose to spend another year in college and pick up another major or minor along the way. Many students choose to pursue a master’s degree in accounting. These programs typically require about 30 credit hours to complete and only take about one year if you have an undergraduate degree in accounting. Finally, some students take community college courses to fulfill their 150-credit requirement. This is definitely the least costly option of the three, and can be completed at virtually any community college. Any one of these will suffice, though.
Having the Requisite Character and Fitness to be a Professional Accountant
Many parties—internal auditors, investors, shareholders, the federal government and the public, to name a few—rely on financial statements to be free of errors or falsehoods. As such, it is essential that prospective CPAs demonstrate that they possess the requisite ethical character to prevent false or misleading information from making its way onto these documents and out into the public sphere. The Enron scandal, which also took down former Big Five accounting firm Arthur Andersen, led Congress to pass the Sarbanes-Oxley Act and requiring more public transparency regarding audits and the auditors who are conducting them.
Passing All Three Parts of the CPA Exam
This is without a doubt the most important step on the way to becoming a CPA. If you do not pass all three parts of the exam, you must retake the part or parts you did not successfully complete until you earn a passing score. Nearly all students choose to enroll in a class to help them prepare for this beast of an exam. These test preparation classes typically cost somewhere between $1,000-$2,000, although some may be slightly more expensive than that. Spending that kind of money on CPA exam preparation may seem excessive but is actually a smart investment. Just view it as an insurance policy that will ensure your years of education will not go to waste.