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How Do You Become a CPA?

If you want to propel yourself to the top of the accounting world, becoming a CPA is a must. However, with such a lofty status comes lofty requirements. Whether you’re just getting started in this industry or you’ve been an accountant for years, knowing the proper steps to get from where you are to where you want to be is paramount.

Why Become a CPA?

Many outside of the industry use terms like accountant and CPA interchangeably, but there are some distinct differences between the two. While all CPAs are accountants, not all accountants are CPAs.

A CPA, also known as a certified public accountant, is someone who has met very strict and comprehensive state and education licensing requirements. This includes passing the rigorous CPA exam. 

Benefits of becoming a CPA include:

  • Increased prestige and respect within the industry. (The designation alone helps a resume move from the bottom to top of a pile of resumes.)
  • Accountants are a dime a dozen. The CPA designation is much more exclusive. By obtaining your CPA license, you essentially create a high level of job security and upward mobility within the industry. 
  • While it all depends on where you live, what industry you work in, and your experience level, most CPAs make somewhere between 10 to 15 percent more than standard accountants. Plus, with more job opportunities for CPAs, there’s always an opportunity to grow your income.

While it might not be the sexiest field, the world of accounting – and the CPA designation in particular – is one of opportunity. And those who pursue this career path will have success.

3 Tips to Become a CPA

Interested in becoming a CPA? Here are some things you need to know:

  1. Understand the Basics

The first step is to understand what you need to do to become a CPA. While there can be slight variations in requirements from state to state, they’re relatively similar across the board. 

In all 50 states, you’re required to have a bachelor’s degree with at least 150 credit hours of approved coursework. (Some states will allow you to sit for the exam with only 120 hours, but you’ll still be required to complete 150 hours before applying for the license). 

The minimum age is 18 in most states, though you have to be 21 in Missouri and New York to apply for your CPA license. Residency can come into play in certain states (where you must reside for at least six months prior to sitting for the exam), but many allow non-residents to take the exam.

As we’ve hinted at, the most important part of becoming a CPA – or at least the most difficult part – is the CPA exam. And while it’s often framed as an exam (singular), it’s really a series of exams. 

“The CPA exam has 324 multiple-choice questions, 20 task-based simulation questions and three writing portions,” Joe D’Allegro writes for Investopedia. “These are divided into four main sections: Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), Regulation (REG) and Business Environment and Concepts (BEC).”

Each one of the four exams is taken individually. Once you pass the first exam, an 18-month clock starts. You must pass the remaining three exams within this window of time. 

  1. Study for the Exams

Studying is one of the most important steps in the process. You need a minimum of a 75 on each of the exams to pass. And, unfortunately, the national pass rate for each of the exams is below 50 percent. In other words, there’s no coasting. You have to study early and often.

  1. Schedule and Take Your Exams

Finally, it’s time to schedule your CPA exam. You’ll fill out an application and once it’s approved by your state board of accountancy, you’ll receive something known as an Authorization to Test (ATT) in the mail. You then have 90 days to select the CPA exam you’ll sit for. Then you register, pay the fees, and sit for the exam. Once the first exam is complete, you can schedule the next one (and so on).

Adding it All Up

The process of becoming a CPA is clear and relatively straightforward. If you complete the steps outlined, you’ll obtain your license and be able to launch a new career. However, do not mistake the simplicity of the process with ease. There’s nothing easy about becoming a CPA. It requires hard work, patience, and attention to detail. The more seriously you take the process, the more likely it is that you’ll come out on top. Best of luck in your future endeavors!