Becoming a Certified Public Accountant (CPA) is a goal that many aspiring financial professionals pursue, but it’s not just about passing an exam. A CPA is a trusted advisor, a regulatory expert, and often a financial strategist for individuals and organizations. This blog will guide you through the essential steps in how to become a CPA, what the journey entails, and what to expect along the way.
What Is a CPA?
A CPA, or Certified Public Accountant, is a licensed accounting professional who has met specific educational, examination, and experience requirements. These professionals are often authorized to perform auditing services, prepare and file taxes, and provide strategic financial planning advice.
CPAs are held to strict ethical and professional standards, and they often serve in roles such as auditors, financial analysts, compliance officers, and consultants. Their certification indicates a high level of competence, credibility, and integrity in the field of accounting.
What Does CPA Stand For?
CPA stands for Certified Public Accountant. The certification is issued by state boards of accountancy in the United States and requires passing the Uniform CPA Examination, along with fulfilling educational and work experience criteria.
Although the CPA credential is recognized nationally, licensure is granted on a state-by-state basis. This means that candidates must ensure they meet the specific requirements of the state in which they plan to practice.
What Are the Steps to Becoming a CPA?
1. Earn a Bachelor's Degree
The first step in becoming a CPA is earning a bachelor’s degree, typically in accounting or a closely related field such as finance or business administration. Most states require CPA candidates to complete 150 semester hours of college coursework, which exceeds the traditional 120 credit hours found in a typical four-year undergraduate program.
This often means candidates pursue a fifth year of coursework or enroll in a combined bachelor’s/master’s degree program. Courses should include a mix of general education, business, and advanced accounting topics like taxation, auditing, and financial reporting.
2. Meet State-Specific Requirements
Each U.S. state and territory has its own board of accountancy that sets the criteria for CPA licensure. Common requirements include:
- 150 semester hours of education
- A certain number of accounting-specific courses
- Residency or citizenship status
- Good moral character documentation
Some states also require candidates to pass an ethics exam in addition to the CPA Exam.
3. Pass the CPA Exam
This is often seen as the most challenging part of the process. The Uniform CPA Examination, developed and maintained by the American Institute of Certified Public Accountants (AICPA), tests a broad range of knowledge and skills necessary for the profession.
The exam includes four separate sections:
- Auditing and Attestation (AUD)
- Business Environment and Concepts (BEC)
- Financial Accounting and Reporting (FAR)
- Regulation (REG)
Candidates must pass all four sections within an 18-month window. Scoring is done on a scale of 0 to 99, with a minimum passing score of 75 for each section.
4. Gain Required Work Experience
After passing the CPA exam, candidates must accumulate a specific amount of professional experience, typically one to two years, under the supervision of a licensed CPA. The exact requirements vary by state, but the experience should include relevant accounting tasks such as:
- Auditing
- Tax preparation
- Financial reporting
- Consulting or advisory services
Most boards require documentation and verification from the supervising CPA.
5. Apply for Licensure
Once all education, examination, and experience requirements are completed, the next step is applying for CPA licensure through your state’s board of accountancy. The process often includes:
- Submitting official transcripts
- Verifying work experience
- Passing a background check
- Paying an application fee
Once approved, you'll be officially granted CPA status and allowed to use the CPA designation after your name.
6. Maintain Your License Through Continuing Education
Earning the CPA license is not the end of the road. CPAs must complete Continuing Professional Education (CPE) requirements to keep their license active. Most states require 40 hours of CPE annually or 80 hours over two years, including ethics training.
Courses may cover new laws, regulations, technology, or best practices in accounting. This ensures that CPAs remain up to date in a constantly evolving field.
How Difficult Is the CPA Exam?
It’s no exaggeration to say that the CPA Exam is one of the most challenging professional licensure exams. Each section is designed to test deep understanding, analytical thinking, and practical application of accounting principles.
Key Challenges:
- Volume of Content: Each exam section covers a broad and detailed body of knowledge. For example, FAR is considered the most content-heavy, requiring mastery of topics like GAAP, government accounting, and financial statement preparation.
- Format: Each section includes a mix of multiple-choice questions, task-based simulations, and (in some cases) written communication tasks.
- Time Pressure: With each section lasting four hours, test-takers need strong time-management skills to complete every question.
Study Tips:
- Start with a Plan: Create a realistic study schedule that allows you to focus on one section at a time.
- Use a Reputable CPA Review Course: These often include practice exams, flashcards, and performance analytics.
- Practice Simulations: These are the most time-consuming part of the test and require a practical understanding of the content.
- Stay Consistent: Study regularly in small, focused sessions instead of cramming.
Persistence, discipline, and proper preparation are the keys to success.
How Long Is the CPA Exam?
The CPA Exam consists of four sections, each lasting four hours, totaling 16 hours of test time. Here’s a closer look at the exam structure:
1. Auditing and Attestation (AUD)
- Focus: Auditing procedures, ethics, internal controls, risk assessment.
- Format: Multiple choice and task-based simulations.
2. Business Environment and Concepts (BEC)
- Focus: Corporate governance, economics, financial management, IT, and written communication.
- Unique Feature: This is the only section that includes written response questions.
3. Financial Accounting and Reporting (FAR)
- Focus: Financial statement preparation and reporting under GAAP, governmental and not-for-profit accounting.
- Known as the most difficult due to its breadth.
4. Regulation (REG)
- Focus: Federal taxation, business law, ethics, and professional responsibility.
Candidates can take each section independently, and many opt to schedule their exams across several months. All four sections must be passed within an 18-month rolling window, which begins after the first section is passed.
Conclusion
Becoming a CPA is a rigorous process that begins with education, progresses through a demanding exam, and culminates in real-world experience and licensure. It’s a journey that requires time, focus, and resilience, but the result is a professional designation that holds significant prestige in the field of accounting.
Understanding how to become a CPA means more than just studying for an exam. It’s about building a solid foundation in accounting principles, staying committed to ethical standards, and continuing to grow through lifelong learning. Whether you’re just starting your academic journey or preparing for the CPA exam, being clear on each step in the process will help you move forward with confidence. To learn more about ECPI’s Accounting Program, visit here.