The CPA, or Certified Public Accountant, is the gold standard of accountancy; a US designation, it is comparable with the term chartered accountant in other jurisdictions. But what is a CPA?
Although most states in the USA will allow anyone to practice as an accountant, CPA have to earn the title. To so this, candidates have to go through a rigorous qualification process, pass the CPA exam, meet study requirements, and, once certified, maintain ongoing professional development to hold their status. The system provides assurance that only the best accountants can call themselves a CPA.
As a result, there are a series of tasks that only a CPA can perform, for example, providing audit and accountancy services to corporations. It means that CPAs are in high demand, commanding higher salaries than other accountants, and experiencing more rapid career progression; many C-suite occupants, especially those with finance roles, will be CPAs. It means that for many interested in a financial career, the question is not how to become an accountant, but how to become a CPA.
How to become a CPA
The path to gaining CPA status is not an easy one, and for some can take a considerable time. There is no single answer to how long it takes to become a CPA, since people’s routes will vary. For those who set out to follow that path, however, it is likely to take four to five years at a minimum.
In simple terms, to become a CPA, you must have a relevant Bachelor's degree to begin. Once you have that, you can start the process of studying for the CPA. Exact requirements vary between states, but most have a ‘150-hour’ rule, requiring 150 hours of study before the exam, and many have a requirement for some work experience. In practice, this requirement means at least an additional year of study or practice, and some universities even offer five-year programmes that include this after the normal Bachelor's programme.
It is also important to note that even with a great degree and the 150 hours of additional study, the exam is hard. Made up of four parts, consisting of multiple-choice questions, simulations, and written tasks, candidates must score at least 75% on each. The Association of International CPAs publish quarterly pass-rates and, overall, typically more than half the candidates fail.
The academic rigor means that many would consider the CPA equivalent to a master’s degree. Indeed, many consider it to be more like a specialist MBA.
What type of Bachelor’s degree do you need
A consideration when planning how to become a CPA is to choose the right Bachelor's degree. A common question from potential candidates is ‘can I take the CPA exam with a Bachelor's degree in …’ and whatever their major might be. Unfortunately, the answer is often ‘no’. The requirement for a Bachelor's degree is not merely to establish a level of academic ability, but to ensure a foundation of relevant knowledge.
Exactly what degrees qualify will vary. Since CPA licensing is at state level, each state sets their own rules. Frequently, these will be straightforward, such as requiring a Bachelor's degree in accountancy. Others are more flexible, for example allowing any degree if it contains specific accountancy-related courses or a minimum amount of accountancy content.
If you are confident you want to seek CPA status, it’s worth researching the precise requirements in your state, or the state you hope to qualify in. And, for some, this might provide an opportunity to consider studying elsewhere. Given how long it takes to become a CPA, it is a major commitment, so finding the right course for you is important. Studying in a state that allows you to take a degree that not only has the required content, but also interests you, might be better than studying for four years on a course you do not enjoy. And one of the benefits of being a CPA is that, despite individual states licensing CPAs, they all — except Hawaii — recognize CPAs from any state.
Choosing your Accountancy course
Most US accountancy Bachelor's degrees will meet the requirements for the CPA Bachelor's qualification. Indeed, because of the move towards a common global accountancy standard, most notably through the International Financial Reporting Standard, it’s possible that degrees from elsewhere in the world will also qualify. However, regardless of the degree title, if you want to take the CPA exam with a Bachelor's degree it’s important to check it meets the relevant state’s criteria.
Check our list of Bachelor's in Accounting
The benefits of CPA status
Given how long it takes to become a CPA, it requires a significant investment of both time and money for students. Some of this might be offset, for example, in states that require professional experience it means that, for at least some of the period, the candidate will have been earning money. Indeed, some candidate may find that employers contribute towards their CPA qualification.
But having considered how to become a CPA, it’s also worth asking why become a CPA in the first place.
For those that are interested in accountancy, those benefits may simply be in the work itself. CPAs will, generally, undertake a more varied, interesting, and challenging work. Non-CPA accountants might work in-house for their entire career, while a CPA for a major firm might find themselves dealing with clients around the world, working across sectors, and constantly facing new situations and problems to solve.
But there are more mercenary benefits, too! The most obvious is in earning potential. A CPA will, typically, earn 20-25% more than a non-CPA accountant with an otherwise similar level of education and experience. And CPAs experience better career progression. Typically, the high-level finance roles at any organization will be filled by CPA-holding candidates. Although how long it takes to become a CPA might be off-putting, the long-term benefits of acquiring the status more than compensate the work it requires.
