Key Takeaways:
- Aspiring CPAs must complete 150 semester hours in accounting, often achieved through a bachelor’s and a master’s degree.
- The CPA exam has four sections: auditing, regulations, business concepts, and financial accounting, and it takes 14 hours in total.
- To maintain licensure, CPAs must fulfill state requirements and complete continuing education after passing the exam.
Accounting students who wonder how to become a CPA should know that there is a set career path. It begins with completing an accounting degree, working as an accountant, and taking the American Institute of Certified Public Accountants (AICPA) Uniform Certified Public Accountant Examination.
Complete an Accounting Degree
Most states require CPAs to have at least 150 semester hours, so accounting students will need more than a 120 credit hour bachelor’s degree. Certain colleges will offer a unique five year accounting program specifically designed for aspiring CPAs.
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However, most students will complete a bachelor’s degree and then go on to finish a master’s degree. A Bachelor of Science in Accounting is the most commonly pursued degree by accountants. The opportunity to become a CPA is one of the things that makes dedicated accounting degrees worth it.
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Courses will cover accounting information systems, strategic decision-making, and ethical and legal topics. Students will learn advanced accounting concepts within the framework of business environments.
They will be trained to create accurate accounting documents and make informed business decisions. Other classes will cover key topics such as liabilities, investments, payroll accounting, and statements of cash flows, and financial analysis.
The CPA Exam
The CPA test is one of the most challenging professional licensing exams. Although candidates can only take one of the four sections at a time, almost half of examinees fail the first time.
The AICPA divides the year into four time slots that consist of three months. Each period is divided into two months, when testing is allowed, and one month, when testing is not allowed. During the testing months, examinees may take one or more exam sections, but only one time.
The majority of the test consists of multiple-choice questions with interactive simulations. That is, the examinee will be required to create written communications, manipulate spreadsheets, and search databases.
Examinees are required to craft well-written communications that properly organize, develop, and express ideas and evidence. The computer-based CPA exam takes a total of 14 hours and consists of four sections: auditing, regulations, business concepts, and financial accounting and reporting.
The CPA Exam Content
Auditing and attestation cover knowledge of internal controls, auditing procedures, and the generally accepted auditing standards (GAAS). It will test knowledge of professional responsibilities, such as industry-standard ethics and the AICPA Code of Professional Conduct. It will also cover review services, audit reports, and attestation engagements.
The regulation section covers business law and federal taxation. This includes questions about individual, corporate and gain and loss taxation. Therefore, students must have a strong understanding of the federal tax process and common business laws related to taxation.
Next, the CPA exam covers general knowledge of business practices and environments related to accountancy. This includes key concepts such as IT, finance, economics, strategic planning, and operations management.
Examinees must be able to demonstrate a working knowledge of this through written communication samples. Financial accounting and reporting will make up the bulk of the CPA exam. This section will test knowledge of the generally accepted accounting principles (GAAP) and the International Financial Reporting Standards (IFRS). Finally, it will also cover basic financial concepts, accounts, disclosures, and transactions.
After successfully graduating from an accredited accounting program and gaining sufficient work experience, students will be ready to meet their state’s licensing requirements and pass the CPA exam. How to become a CPA begins with a formal education and continues with license renewal through completing continuing education coursework.