Accounting Certifications: Certified Public Accountant (CPA)
Certified Public Accountant (CPA) is a widely recognized and respected accounting certification. In this article, we will discuss all important aspects related to becoming a CPA: what a CPA is and is not; how to apply for a CPA license in your state, and what different requirements for a CPA license may be; how to prepare for and take the CPA exam; and finally, how to maintain your CPA license after you received it.
1. What is Certified Public Accountant (CPA)?
A Certified Public Accountant (CPA) is a certification (license) granted to an individual who demonstrates the knowledge of accounting through education and training and who has gained some work experience in the accounting profession.
Some people may be wondering if all accountants are CPAs: only some accountants are CPAs while all CPAs are accountants. There are more accountants than there are CPAs.
Becoming a CPA has advantages. Over the term of their careers, CPAs usually earn more than accountants without a CPA designation. An accountant who starts a career as a bookkeeper, for example, can have an hourly rate of $15 per hour, which translates to roughly $30,000 per year (in the U.S.); and their earning potential over the long term may be limited. On other hand, CPAs can start earning about $40,000-$60,000 per year, and the earning potential may not stop until hundreds of thousands per year (e.g., some partners in the Big Four audit firms can earn $500,000 and more per year). CPAs are also more attractive job candidates for employers because CPAs are known to have proven skills and experience in the profession. Finally, in the U.S., only CPAs can provide certain audit or assurance services which increases the number of job opportunities for CPAs.
Among all accounting designations available to accountants, CPA is one of the more widely spread, recognized, and respected. CPAs work in all areas of the profession such as accountants, auditors, controllers, chief financial officers, chief executive officers, educators, business owners, and so on. The CPA certification is also more flexible as it doesn’t limit somebody to a specific area of accounting as much as other more specialized accounting certifications. For example, Certified Internal Auditor, Enrolled Agent, and Certified Fraud Examiner designations are more geared towards internal audit, taxes, and fraud examinations, respectively.
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