Becoming a CPA can be a lucrative career move, but before you follow through with your ambitions, there are some things you should know. The better informed you are, and the better prepared you are, the smoother the process of becoming a CPA will be.
The Benefits of Becoming a CPA
First, you should know the benefits of becoming a CPA.
- Higher pay. Once you become CPA certified, you’ll likely attract a higher salary. Employers are willing to pay more for people who have this formal certification.
- Better employment opportunities. Becoming a CPA also opens the door to better employment opportunities. Some positions outright require CPA certification, so you’ll have a much wider range of options.
- The competitive advantage. CPA certification gives you a competitive advantage in many ways. If you own your own firm, you’ll be more likely to attract clients than a firm run by a non-certified accountant. And if you’re vying for a position or promotion within a company, your CPA certification could give you the edge.
The Requirements to Become a CPA
If you want to become a CPA, you’ll need to meet several requirements. These requirements vary by state, so you’ll need to become familiar with the CPA requirements of your state, specifically.
Generally, you’ll need to meet some requirements in each of these areas:
- Education. First, you’ll need to have some accounting education. That usually means meeting a specific number of credit hours of formal education in accounting.
- Experience. You’ll also need to have some experience in an accounting position. Depending on the state, this could be anywhere from 6 months to 2 years of experience.
- Exam. In all states, you’ll be required to pass the CPA exam before you can become CPA certified. We’ll discuss this exam in detail in the next section.
- Ethics (and other requirements). Some states also require you to pass an ethics exam, and may force you to meet other requirements.
The Sections of the CPA Exam
One of the most important requirements in becoming a CPA is the CPA exam itself. Many people fail this exam the first time they take it because they’re not adequately prepared—and because the exam itself is very difficult.
According to EfficientLearning.com, the exam unfolds across four sections:
- Auditing and Attestation (AUD). In the AUD section, you’ll be responsible for knowing ethics, professional responsibilities, general principles, risk assessment, obtaining evidence, and forming conclusions. You’ll have 4 hours to complete this section, which consists of 72 multiple choice questions and 8 task-based simulations.
- Business Environment and Concepts (BEC). In the BEC section, you’ll need to know about things like corporate governance, economic concepts and analysis, financial management, information technology, and operations management. You’ll have 4 hours to complete this section, which consists of 62 multiple choice questions and 4 task-based simulations. In this section, there will also be 3 written communications.
- Financial Accounting and Reporting (FAR). In the FAR section, you’ll need to know conceptual frameworks, standard setting, financial reporting, and information related to financial statement accounts, select transactions, and state and local governments. You’ll have 4 hours to complete this section, which consists of 66 multiple choice questions and 8 task-based simulations.
- Regulation (REG). In the REG section, you’ll need to know ethics, professional responsibilities, federal tax procedures, business law, federal taxation of property transactions, federal taxation of individuals, and federal taxation of entities. You’ll have 4 hours to complete this section, which consists of 76 multiple choice questions and 8 task-based simulations.
It’s important to dedicate significant time to studying for the CPA exam in each of these sections. You will be able to take each section of the exam separately, so don’t feel pressured to study all 4 sections at the same time. As long as you pass all 4 within 18 months, you’re good.
Many people like to take the FAR section first, and leave the BEC section for last, since it’s commonly regarded as the easiest section (based on the fact that it has the highest pass rate). However, you can take the sections in any order you choose. Oftentimes, the best approach is to take the test sections in order from hardest to easiest; if you leave the hardest sections for the end, you may find it harder to pass every section within your allotted time window.
Becoming CPA Certified Isn’t Enough
You also need to know that becoming CPA certified isn’t going to magically improve your accounting career or help you achieve all your personal and professional goals. It’s a helpful certification, but you still need to put in the effort if you want to improve your career.
- Goals and aspirations. The best way to advance in your career is to set specific goals and try to achieve them. If you don’t have direction, or specific aspirations, a CPA won’t improve your career by itself.
- Ongoing learning and development. Accountants should pursue continuing professional education (CPE) to remain up-to-date on the latest laws, rules, and regulations in the field. They should also commit to learning new skills and sharpening their existing ones.
- Networking. It’s important to network regularly to expand your professional connections. This can open the door to new job opportunities, help you find mentors, or just help you learn from other professionals along the way.
- Mentorship. Ideally, you’ll work with a mentor who can coach you and guide you in your career development. Their experience will be invaluable in your growth.
- Soft skill development. It’s also important to work on your soft skill development. Critical thinking, communication, interpersonal skills, and emotional intelligence are all vital for career success.
Not every accountant will want to become a certified CPA, but it can be a valuable career move for most people in the finance industry. If you take the time to learn more about CPA certification and adequately prepare for the exam, you should have no trouble taking this meaningful next step in your career development.