Do you want to become a certified public accountant? A certified public accountant (CPA) offers financial advice to individuals, companies, and organizations. Becoming certified gives you extra credibility as an accountant and licenses you to carry out auditing of financial statements. In some states, including Texas, only qualified CPAs are allowed to use the term "accountant" or "auditor" to describe themselves.
How to Become a Certified Public Accountant
In order to become a certified public accountant, you need to pass the Uniform CPA Examination. Most states also require you to have completed a minimum number of hours of education - 150 hours is the norm - and hold a bachelor's degree. California, Colorado, Delaware, New Hampshire, Vermont, and the Virgin Islands do not have this requirement in place. In many states, you are also required to have one or two years of experience of working under a CPA before you can become certified.
Uniform CPA Examination
The Uniform CPA Examination is a standardized exam that is the same across the United States. It is a computer-based exam that includes multiple choice questions and questions requiring written responses. The exam is scored from 0 to 99, and you'll need to score at least 75 to pass. The exam has the following four sections to test your knowledge and skills.
Auditing and Attestation
The first section of the CPA exam is the Auditing and Attestation (AUD) section. It tests your knowledge of auditing standards and practices, as well as your skill in applying these standards. You will need to answer multiple-choice questions about the auditing procedure, and answer a more in-depth question where you must identify the correct action to take in several auditing scenarios.
Business Environment and Concepts
The second exam section is on Business Environment and Concepts (BEC). For this section, you will need to demonstrate your knowledge of business and how business decisions can impact company accounts. Unlike the other sections, in which you have to choose the correct response from multiple options, this section requires you to make written responses to the questions asked. As this section has to be graded by humans rather than by machine, it can take longer to get your results from the BEC section of the CPA.
Financial Accounting and Reporting
The Financial Accounting and Reporting (FAR) section of the Uniform CPA Exam tests your knowledge of accounting practices that can be applied for companies, non-profits, and government institutions. You will be asked to study financial statements and answer multiple choice questions.
The final section of the Uniform CPA Exam (REG) ensures that you have a strong working knowledge of business law and taxation regulations. It also tests your understanding of professional ethics and responsibilities. More than 60% of this exam section focuses on taxation, so it is important to brush up on this topic. The REG section has a reputation for being tougher than the other sections, so make sure you prepare thoroughly.
Some states also will require you to pass a separate ethics exam before they will allow you to become a CPA.
Maintaining Your CPA License
Getting your license to practice as a CPA is only the first step: once qualified, you need to meet your state's continuing professional education requirements. Typically, you will be required to complete at least 40 hours of various types of training each year to be allowed to renew your license. This may include taking classes in ethics, depending on your state's requirements.
Once you have qualified as a CPA, you will be eligible to become a member of the American Institute of Certified Public Accountants (AICPA). Membership of the AICPA enables you to access training, advice, and guidance that could help you advance your career, as well as discounts on the products and services you use professionally.
Preparing to Become a CPA
Becoming a CPA requires hard work and dedication. You will need to study hard to pass the Uniform CPA Examination. One of the best things you can do to prepare is to take a practice test to learn what to expect. Passing the CPA exam could be the first step on your journey to a successful career in accounting.