Why is CPA(Certified Public Accountant) the most sought-after course for both the employees and employers? What is with the hype around these 3 letters? What is CPA? Who is a CPA? How to become a CPA? These are some of the questions we have tried to answer in this blog.
With new businesses sprouting faster than plants today, accountants are in demand. After all, they are the ones that help the business grow by taking care of all the financial aspects of the business. They strategize the company’s growth and plan for the future of the business.
The American Institute of Certified Public Accountants offers the Certified Public Accountant CPA, often known as CPA USA, as a license in the subject of accounting (AICPA). According to the AICPA, CPAs are “trusted financial advisors” who assist individuals, businesses, and other organizations plan for and achieving their financial goals. CPAs can assist with any aspect of financial management, from saving for a new home to starting a business. It is one of the highest qualifications attained in this field. Being the only official credential an individual can attain in the field of accounting and finance, employers are looking to hire only those with the license.
In the financial world, a CPA can work in a variety of roles. They can operate as trustworthy financial counselors, business consultants, accountants, auditors, and tax specialists because of their considerable accounting and ethics knowledge. They are capable of holding high-ranking executive jobs. The CPA credential instills confidence and trust in the corporate sector. CPAs earn higher pay, are more widely accepted in the global workforce, have better career options, have more job stability, and are held in high regard in society.
Sounds fascinating right? Now, how to become one is the next question.
How to become a CPA (Certified Public Accountant)?
Before we apply for any exam or course, the first thing to look for is the eligibility criteria. Candidates must meet the eligibility requirements set forth by their individual state boards of accountancy to become Certified Public Accountants. Holding a bachelor’s degree in commerce is required for positions at the international level. Some Indian institutions provide a prospectus that is equivalent to thirty US module credits.
Chartered Accountancy is an international professional education that is offered by certain state boards. Candidates with a bachelor’s degree in commerce from a NAAC-A-rated university with a first division are qualified to sit for the standard CPA exam. Only those individuals who have a qualification in MBAs, Master of Commerce, Member of the Company Secretaries in India, Member of the Institute of Cost and Works Accountants in India, Member of the Institute of Chartered Accountants of India, CA’s with B. Com is also accepted in a few states of the US. Candidates must attain 1-2 years of experience by doing an internship under a CPA and can appear for the exam.
How to apply to take the CPA exam?
The next thing is how to apply for the exam that gives you the license? This can get a little difficult because your educational requirements must be approved by your state committee first. Once you’ve been approved, you’ll be able to formally apply for the exam. Once your application has been approved, you will receive a notification to schedule (NTS) and authorization to test (ATT), which will allow you to learn more about the CPA exam procedure. The ATT allows applicants to sit for specific sections of the CPA test. It is valid only for a period of 90 days.
Choose which sections of the CPA exam you want to take. It’s best to tackle one or two aspects at a time, giving each one its appropriate weight. The CPA exam allows you to choose your time and center for the test, according to the options listed. There are 8 cities candidates can take their exams in, New Delhi, Ahmedabad, Bangalore, Chennai, Calcutta, Hyderabad, Mumbai, and Trivandrum.
Prepare for the CPA exam
Once you are ready with the application, the next thing we need to do is prepare. A basic exam structure will help you prepare better for the exam. The exam is for a total of 16 hours and has 4 sections that need to be answered – Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).
A minimum score of 75 on a scale of 0 to 99 is required to pass the CPA exam. Please keep in mind that you have 18 months to complete all four components of the CPA exam. The 18-month timeframe begins on the day you pass your first section exam. It may, however, differ depending on the jurisdiction.
Pass the CPA exam and Ethics exam
Passing the ethics exam is the final step. It’s worth noting that passing this exam isn’t required by all state boards. So, check with your state’s accounting board. You must take the ethics exam within two years of applying for your CPA license after completing the four components of the exam.
The American Institute of Certified Public Accountants (AICPA) Professional Ethics self-study course and exam are accepted by some state boards. However, many companies run their own ethics exams, so you’ll need to choose a course that meets their needs. The minimum score required to pass the ethics exam is 90 and you get only 3 attempts to do so. It is a 40 multiple choice question paper, relatively easier compared to the main exam.
Apply for the license
Last but not the least, apply for the license after having cleared the ethics paper. Work experience requirements for obtaining a license vary by state, ranging from six months to two years. A certified public accountant must verify the experience credentials. Most states demand at least two years of public accounting experience. Many states accept expertise from non-public accounting professions as well, although with a higher experience requirement. Some states, on the other hand, have a two-tier system, awarding licenses in stages. While passing the exam will get you a license, you won’t be able to practice unless you meet the experience requirements.
Having said this, determination and hard work with consistency are what pay off in the end.
We at Finprov aim to help you through the process and support you achieve your goal of being a Certified Professional Accountant.