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Certified Public Accountant (CPA) - Explained

What is a Certified Public Accountant?

Written by Jason Gordon

Updated at April 7th, 2022

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Table of Contents

What is a Certified Public Accountant (CPA)?What is Required to be a Certified Public Accountant CPA?CPA ExamAccounting ExperienceLicensureContinued EducationAcademic Research on Certified Public Accountant (CPA)

What is a Certified Public Accountant (CPA)?

A Certified Public Accountant (CPA) is a professional designation given by the American Institute of Certified Public Accountants referring. It is given to accountants who pass certifying exams and meet the applicable state requirements to become a licensed.

Back to: Accounting & Taxation

What is Required to be a Certified Public Accountant CPA?

State Boards of Accountancy determine the laws and rules for each state/jurisdiction. In each jurisdiction, 3 Es are needed for licensure:

  • Education
  • Exam or Uniform CPA Examination
  • Experience

Requirements differ with the state, but generally:

  • 150 semester hours of Academic Credit
  • Number of accounting hours depends on state requirements (mostly 30 or more)
  • Pass all parts of the CPA Exam

CPA Exam

  • Computer-based format
  • Consists of 4 sections
    • Auditing and Attestation (AUD)
    • Business Environment and Concepts (BEC)
    • Financial Accounting and Reporting (FAR)
    • Regulation (REG)
  • Same test no matter where it is taken
  • Passing score is 75 on a 0-99 scale
  • Question types include multiple choice, simulation, and written communication
  • Eligibility to sit for exam depends on state requirements

Accounting Experience

  • A candidate is an applicant for a CPA license
  • Many states require the candidate to have 1 2 years experience under a CPA
  • Additional requirements vary by the candidates needs.
  • Education e.g., Graduate degree vs. 150 hours of undergraduate Employer(s)
  • Type of work e.g., Tax professional vs. Auditor

Licensure

  • Licenses give the right to practice public accounting
  • Some state requires an ethics exam
  • Must comply with rules of professional conduct
  • CPA Exam & Licensure Center

Continued Education

  • Continuing Professional Education (CPE)
    • 40 hours per year Types (e.g., computer-based vs. group learning) of CPE vary by area requiring an application of Ethics and compliance Subjects differ relying on the type of license and area of work
  • Renewal of license every 1, 2 or 3 years

Certified Public Accountants mostly prepare income tax or auditing but can also practice forensic accounting, management accounting, and information technology. Auditors are required to follow a code of ethics. According to federal and state laws, accountants and auditors should be independent when performing their duties

cpa certified public accountant

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