Certified public accountants (CPAs) are crucial in today’s complex and ever-changing business environment.
CPAs are responsible for providing reliable financial information, assisting with tax preparation and ensuring the accuracy of financial records, among other responsibilities.
The CPA designation is a prestigious credential that signifies high competence and adherence to professional standards.
Here, you will learn more about what a CPA is, the roles and responsibilities of certified public accountants and the process of obtaining a CPA license.
Additionally, we will explore the various career paths and specializations available to CPAs and the importance of ethics and professionalism in accounting.
Table of Contents
What is a CPA?
A CPA, or certified public accountant, is a designation awarded to accounting professionals who have met specific education, examination and experience requirements.
They possess the knowledge and expertise to perform various accounting services, including financial accounting, tax preparation, audit and consulting services.
The distinction between a CPA and a non-CPAaccounting professional is crucial. A non-CPA may have an accounting degree and perform bookkeeping or financial reporting tasks.
However, a CPA has passed the rigorous Uniform CPA Exam, met work experience requirements and is licensed by their respective State Boards of Accountancy. This licensure indicates a higher level of expertise and competence in accounting practices.
The American Institute of Certified Public Accountants (AICPA) is the national professional organization representing CPAs in the United States.
It establishes professional standards, provides resources and supports CPAs in their careers by offering continuing education and professional development opportunities.
What are the education and licensure requirements for CPAs?
Aspiring candidates must meet specific educational and licensing requirements to become CPAs. These include:
Educational Background: Candidates must have a bachelor’s degree in accounting or a related field. Some states also require a master’s degree or a certain number of semester hours in accounting courses to be eligible for licensure.
Uniform CPA exam
Administered by the National Association of State Boards of Accountancy (NASBA), the Uniform CPA Exam is a comprehensive and challenging test that assesses a candidate’s knowledge and skills in various accounting areas.
The exam consists of four sections:
- AUD: Auditing and Attestation.
- BEC: Business Environment and Concepts.
- FAR: Financial Accounting and Reporting.
- REG: Regulation.
Please be aware that candidates must pass all four sections within an 18-month window. Once passed, one may earn their CPA certification.
Every state has a State Board of Accountancy responsible for licensing CPAs. These boards set the eligibility, education and experience requirements for licensure.
In general, CPA candidates must complete a specific number of work experience hours under the supervision of a licensed CPA before obtaining their CPA license. Additionally, some states require ongoing continuing professional education to maintain licensure.
Related: How Can I Help My CPA?
What job opportunities are available to CPAs?
CPAs have a wide range of career opportunities available to them, including working for:
- Public Accounting Firms: CPAs can work for large, medium or small public accounting firms, providing services such as auditing, tax planning and consulting to clients in various industries.
- Government Agencies: CPAs can work for federal, state or local government agencies, such as the Internal Revenue Service (IRS), managing budgets and financial reports and ensuring compliance with financial regulations.
- Non-profit Organizations: CPAs may work for non-profit organizations, overseeing financial records, managing budgets and ensuring compliance with tax laws and regulations.
- CFO and Chief Financial Officer Positions: CPAs with extensive experience and knowledge can rise to executive-level positions, such as Chief Financial Officer (CFO), overseeing an organization’s financial operations and strategy.
Related: How to Choose the Best CPA Firm for your Startup or Business
What services do CPAs provide?
CPAs provide a variety of services, including:
- Financial Accounting: Preparing and maintaining financial statements and records to ensure accurate and reliable financial information.
- Tax Preparation and Tax Returns: Assisting individuals and businesses in preparing and filing their tax returns while ensuring compliance with tax laws.
- Auditing and Attestation: Conducting audits to verify the accuracy and integrity of financial statements and providing assurance on the reliability of financial information.
- Financial Planning and Consulting Services: Helping clients achieve their financial goals by providing advice on investments, budgeting and financial management.
No matter what area of accounting you choose to pursue, a CPA career can be exciting and rewarding. The job offers opportunities for growth and the chance to work with clients from all walks of life.
This is why so many people pursue a career in accounting and become CPAs.
What are the specializations within the CPA profession?
CPAs can choose to specialize in specific areas of accounting based on their interests and career goals.
Some of these specializations include:
This specialization involves investigating financial fraud, disputes and other irregularities. Forensic accountants may work with law enforcement agencies, legal teams or businesses to uncover financial misconduct and help resolve disputes.
CPAs who specialize in financial planning advise individuals and businesses on various aspects of financial management, such as investments, retirement planning and estate planning.
Tax specialists focus on tax compliance, planning and consulting for individuals, businesses and non-profit organizations. They help clients navigate complex tax laws and regulations, minimize tax liabilities and take advantage of tax-saving opportunities.
Nonprofit and government accounting
CPAs working in this field focus on the unique accounting and financial reporting requirements of non-profit organizations and government agencies. They ensure compliance with specific regulations and assist with budgeting and financial management.
CPA consultants provide specialized advice and solutions to businesses on various financial, operational and strategic matters, such as mergers and acquisitions, business valuations and risk management.
What are the ethical and professional guidelines in the CPA profession?
Ethics and professionalism are essential components of the CPA profession. To maintain the public’s trust and uphold the profession’s reputation, CPAs must adhere to the AICPA’s Code of Ethics, which outlines their ethical responsibilities and provides guidance on maintaining the highest standards of integrity and professionalism.
Continuing professional education (CPE) is another vital aspect of maintaining ethical standards.
CPAs are required to complete a certain number of CPE hours each year to stay up-to-date with the latest industry trends, changes in laws and regulations and best practices in accounting.
Related: How Leaders and Their Teams Flourish Through Continuing Education
Consider a career as a CPA
If you are interested in pursuing a career in accounting, then a CPA is an excellent option. With the proper education, experience and willingness to learn, you can become a successful CPA and enjoy a rewarding career filled with many opportunities.
If you want to learn more, check out Entrepreneur for other detailed articles covering accounting and other financial topics.