All you need to know about the CPA exam and how to prepare for it

Introduction

The highest level of expertise in accounting is held by Certified Public Accountants (CPA). Administered by the American Institute of Certified Public Accountants (AICPA), the CPA exam is recognized as the most comprehensive assessment in the field. Those interested in pursuing an accounting career and establishing a distinguished reputation should consider a CPA course. CPAs are widely regarded as the top accounting professionals and are employed in various industries.

Who is a CPA

A Certified Public Accountant (CPA) is an accounting expert who has fulfilled the educational prerequisites, acquired practical experience, and successfully cleared the CPA Exam to obtain the CPA license.

What does a CPA do

• A CPA designation is not a job title or career path, but rather a professional certification that provides greater flexibility and mobility for accounting professionals. 

• Although CPAs are typically only licensed in one state, they can obtain licenses in other states through reciprocity laws. 

• Employers value CPAs for their industry knowledge, reliability, and credentials in various industries, including business and industry, public accounting, non-profit, education, and government. 

• The AICPA recognizes tax preparation and consulting, financial planning, auditing and review, consulting services, and litigation consulting as popular areas of specialization for CPAs. 

• Obtaining a CPA certification requires planning, effort, and dedication to continuing education, with many state boards expecting CPAs to complete 40 hours of professional education annually. Due to the difficulty of passing the CPA Exam and the commitment to continuous education, the CPA license is widely regarded as one of the most prestigious accounting credentials by finance and accounting professionals.

Eligibility for the CPA

• A bachelor's degree or equivalent is required to enroll in the CPA certification program.

• Completion of 150 hours of CPA coursework across multiple semesters is necessary to qualify for a CPA license.

• In certain states, candidates must have one to two years of experience working under the guidance of a licensed CPA.

• The CPA eligibility criteria differ for US citizens and international candidates.

• International candidates are subject to different consent agreements, testing fees, and additional identification requirements compared to US candidates.
  
  

The CPA exam

The CPA exam is a comprehensive test that consists of four parts and evaluates a candidate's skills and knowledge necessary for the CPA profession. The computer-based test is standardized for all candidates and is conducted in English at recognized test centers worldwide. The exam comprises multiple-choice questions, simulations, and written ability sections. To pass, candidates must obtain a score of at least 75 out of 99.

Subjects in the CPA exam

• Auditing and Attestation (AUD)

• Business Environment and Concepts (BEC)

• Financial Accounting and Reporting (FAR)

• Regulation (REG)
  
  

How to prepare for CPA

1. Schedule your exam
   
   

• Determine the date when you will take the CPA exam.

• Book your exam through Prometric, using the information on your Notice to Schedule (NTS).

• You can choose any Prometric test center that offers the CPA exam to take your test.

• Additional fees apply for international locations.

2. Prepare for your exam
   
   

• To prepare for the CPA exam, review the Exam Blueprints and utilize available exam resources and study aids.

• The Exam Blueprints provide content grouped by area, group, and topic, with a score weighting system, task statement examples, graded tasks, and reference materials.

• Candidates must complete a certain number of different item types, including multiple-choice questions, task-based simulations, and written communication tasks.

• Practice with the sample exams.

• Review the test structure of each exam section.

3. Take the exam
   
   

• To become a CPA, you must pass all four portions of the exam within 16 months and score at least 75 on each section.

• Additionally, some state Boards of Accountancy may require you to pass an Ethics exam.

• If an Ethics exam is required, you must pass it in order to become a licensed CPA.
  
  

4. Apply for your license
   
   

• To become a licensed CPA, you will typically need 150 credit hours of education with a focus on accounting.

• Additionally, you must have a minimum of one year of experience, which equates to approximately 2,000 hours.

• The experience must be in the areas of accounting, attest, auditing, or tax, and it must be verified by a licensed CPA.

• For specific requirements regarding licensure, you can visit the NASBA website or contact your state's Board of Accountancy.

Benefits of pursuing CPA as a career

The CPA exam is considered the highest level of accounting education, providing endless opportunities to showcase your skills. The NASBA has listed five advantages of becoming a CPA, which are:

1. Reputation and Esteem: By passing the CPA exam and meeting all other prerequisites, you become a part of a selected group of accountants.

2. Advancement of Your Career: CPAs have opportunities for career advancement in various industries, including investment banks, hedge funds, research firms, private equity firms, and more.

3. Career Security: With retiring CPAs leaving the market, there is an increasing demand for freshly licensed CPAs, ensuring job security.

4. Job Satisfaction: With the CPA designation, you become qualified to perform highly specialized duties that are more important and fascinating.

5. Money and Benefits: Being a CPA leads to an incredible career with higher earnings and opportunities for growth.

CPA jobs

• CPAs have a job in financial management, which includes analyzing clients' financial situation, reviewing financial documents, generating tax, capital, and audit reports, providing bookkeeping advice, and informing clients about changes in government regulations.

• Key responsibilities of CPAs include preparing and evaluating financial statements and records, maintaining records of all financial transactions, including assets, liabilities, and taxes, preparing financial reports for clients, and ensuring compliance with government regulations.

• CPAs are employed by a variety of clients, including individuals, corporations, government, private, and non-profit organizations.

Conclusion

Becoming a CPA is a highly prestigious career path with numerous benefits and recognition. Although challenging, it is a worthwhile field to pursue, depending on one's interests.