Certified Public Accountant: What Is A CPA?

One important quality in being a successful CPA is genuinely caring about your clients and their businesses. I love working with not-for-profit clients for that very reason — I feel like I’m really contributing to their mission by helping them have good financial information on which to make smart business decisions. Because they examine confidential financial records and generally have access to sensitive information, like your Social Security number, it’s imperative to work with a CPA that you trust.

A CPA in Manhattan, New York, for example, will cost more than one in Manhattan, Kansas. CPAs have a wide range of career options available, either in public accounting (that is, working for an accounting firm) or corporate accounting (working inside cloud accounting case studies a company), or in government service. Individuals with the CPA designation can also move into executive positions such as controllers or chief financial officers (CFOs). The requirements for CPA licensure may differ from state to state.

Also, accountants with a CPA certification tend to advance to positions of more responsibility within one to two years and often are promoted to senior-level jobs within a few years after that. States maintain different requirements for whether CPA candidates can sit for the CPA exam before completing their degree. For example, Hawaii only requires examinees to be within 120 days of finishing their bachelor’s program, while Arizona requires candidates to complete their degree before applying for the test.

  • She has worked in private industry as an accountant for law firms and for ITOCHU Corporation, an international conglomerate that manages over 20 subsidiaries and affiliates.
  • Internationally, accounting professionals with similar education and credentials are called CAs, or charted accountants.
  • A certified public accountant (CPA) is an accounting professional whose knowledge and abilities meet elevated, standardized requirements.
  • Arthur Andersen was once a top firm in the U.S., but fell following the scandal.
  • He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses.

“CPAs charge more than regular accountants or tax preparers,” says Jiang. “For a simple tax return, they might charge anywhere from $375 to $500. For complex ones, their fee can go up to thousands.” For the accounting services you might retain if you needed help managing taxable income in retirement, a CPA might charge $150 to $250 per hour, says Jiang. Though known for their role in income tax preparation, CPAs can specialize in many other areas, such as auditing, bookkeeping, forensic accounting, managerial accounting, and even aspects of information technology (IT). Additionally, keeping the CPA designation requires completing a specific number of continuing education hours yearly.

Experience Requirements

Large public companies enlist the help of CPA firms annually in order to provide the SEC with audited financial statements and the IRS with their corporate tax return. The Enron scandal is a great example of what happens to CPAs who don’t follow the code of ethics. They performed both auditing and consulting services at the same time. Arthur Andersen was once a top firm in the U.S., but fell following the scandal. The CPAs that broke laws and breached the APCIA code of ethics faced legal consequences.

  • Some states may require an ethics exam or ethics course to finalize CPA licensure.
  • Some states — like California — also accept the teaching of accounting courses at the postsecondary level as relevant professional experience.
  • As CPAs remain high in demand, and as retiring CPAs leave the market, there is a growing number of job opportunities for newly licensed CPAs.
  • There are a lot of really interesting jobs and possibilities out there.
  • Let us know what type of degree you’re looking into, and we’ll find a list of the best programs to get you there.

States require applicants to have at least 150 semester hours of college education or the equivalent to qualify for CPA certification. Accounting.com is committed to delivering content that is objective and actionable. To that end, we have built a network of industry professionals across higher education to review our content and ensure we are providing the most helpful information to our readers. Our writing and editorial staff are a team of experts holding advanced financial designations and have written for most major financial media publications. Our work has been directly cited by organizations including Entrepreneur, Business Insider, Investopedia, Forbes, CNBC, and many others. The articles and research support materials available on this site are educational and are not intended to be investment or tax advice.

The CPA is an important credential to me, and I still get continuing education credits every year to keep up with our state requirements. This helps me keep current on issues happening in the industry and new accounting pronouncements. The accounting industry thrived in the late 1990s due to large accounting firms expanding their services to include various forms of consulting. The Enron scandal in 2001 resulted in major changes in the accounting industry, including the fact that Arthur Andersen, one of the nation’s top accounting firms, went out of business. Under the Sarbanes-Oxley Act, which was passed in 2002, accountants were subject to tougher restrictions about their consulting assignments.

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As such, CPAs are often accountants that perform the same duties and functions as an accountant without the designation. CPAs, however, are granted certain roles that only they can perform. These include performing audits of public U.S. companies and preparing audited financial statements for a company, such as a balance sheet or an income statement. Those earning the CPA generally end up as an accountant of some sort. That is, they put together, maintain, and review financial statements and related transactions for companies. Many CPAs file tax forms or returns for individuals and businesses.

Working with state CPA societies and other professional organizations, the AICPA provides information to and educates federal, state and local policymakers regarding key issues. Whether serving as an information resource or offering recommendations, the AICPA represents the profession while protecting the public interest. I would encourage students starting out in accounting to spend some time investigating their career options and talk to other people in the industry to get a sense of the best career fit for them. There are a lot of really interesting jobs and possibilities out there. I am an extrovert, which many people don’t think of as a typical characteristic of an accountant, but I find it helpful in establishing a bond with my clients.

Requirements to Become a Certified Public Accountant (CPA)

CPAs can specialize in areas like forensic accounting, personal financial planning, and taxation. In addition, CPAs must complete continuing education requirements and uphold a standard of ethics. Once a person becomes a CPA, the work is not over, there is still an education requirement. CPAs must earn continuing education credit hours annually to maintain their license. Otherwise, they cannot continue to use their CPA license to provide accounting and tax-related services.

How to Choose a CPA

This may include webinars, workshops, conferences, and online self-study courses. CPAs must earn a certain number of CPE credits during a time frame, which the state decides. In some states, unlicensed accountants or accountants with expired licenses are allowed to work as public accountants. But most of the time they still have to be supervised by a certified public accountant. The American Institute of Certified Public Accountants (AICPA) is a non-profit professional organization representing certified public accountants (CPA) in the United States. One important function performed by CPAs relates to assurance services.

As a CPA, it’s very rewarding to be able to make a direct and positive impact on a business client, especially with a not-for-profit that makes a real difference in our community. I also really enjoy the client education aspect of my work when I can help client accounting team members learn additional skills or be a resource to answer questions and resolve problems. As a college student, I learned and liked that accounting is the basis and building block of many financial and business decisions. And I liked that there are lots of different job options and that I would not be unemployed after graduation. That said, you may see a bump above those costs if you work with a CPA.

The format is computerized, and you can take a 15-minute break during each section. Explore programs of your interests with the high-quality standards and flexibility you need to take your career to the next level. This team of experts helps Finance Strategists maintain the highest level of accuracy and professionalism possible.

Depending on your specific skills, the average CPA accounting salary may be higher than other accounting professionals in the workforce. The AICPA announced its plan to accept applications from individuals meeting these criteria, beginning no later than January 1, 2011. Accounting involves recording financial information, preparing documents relating to finance, and analyzing financial records. Public accounting focuses on financial documents that clients must disclose to the public, such as tax documents. Candidates have four hours to complete each section, with a total exam time of 16 hours. Each section is taken individually, and candidates can choose the order in which they take them.