The CPA designation provides assurance to the public, the government, and the business community that CPA licensees have obtained the education and relevant work experience necessary to perform specialized accounting, auditing, and reporting services within a strict code of professional ethics.
There are certain services that only licensed CPAs are legally allowed to perform. The ability to file reports with the Securities and Exchange Commission (SEC) is chief among these. Additionally, auditing and attestation services can only be provided by CPAs, or non certified public accountants (PAs) who have been grandfathered the authority to practice as auditors before changes were made that restricted these functions to certified public accountants exclusively.
Many public accounting firms and law offices will only hire CPAs because of their expanded practice rights and privileges. A number of specialty designations within the financial services industry are also more accessible to certified public accountants. This makes the CPA a tremendously diverse credential that allows those who hold it to draw from their advanced knowledge of accounting without necessarily devoting themselves to careers strictly related to accountancy.
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Certified public accountants are licensed by state and jurisdiction regulatory and licensing boards. All 50 states, as well as five additional jurisdictions, have their own Boards of Accountancy that grant CPA certification and licensure. Through the joint efforts of the National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA), the Uniform Accountancy Act was drafted. The Act has brought a great deal of uniformity to CPA licensing, with 53 of the 55 U.S. jurisdictions maintaining requirements considered substantially equivalent.
Accountants earn their CPA once they have passed the Uniform Certified Public Accountant Examination and met state or jurisdiction-specific education and experience requirements. Although CPAs in every state and jurisdiction must follow the same general outline of education, examination, and experience, known as the “Three Es,” there is considerable variance in the licensing process and specific requirements within the general outline. Requirement and process variation between boards has to do with how credit hours are distributed among accounting, business, ethics, and law classes; qualifications necessary to sit for the CPA Exam; and unique stipulations for fulfilling experiential requirements.
CPA license renewal through all state and jurisdiction boards is contingent upon taking part in continuing professional education courses. State and jurisdiction boards require ongoing education in an effort to ensure their CPAs are being kept abreast of the latest changes in laws and reporting requirements.
All state and jurisdiction Boards of Accountancy require CPA candidates to have a bachelor’s degree at minimum with 150 semester hours of credit. An ideal undergraduate curriculum will include courses in general accounting, computerized accounting, cost accounting, taxation, auditing, business statistics, business administration, business communications, financial management, budget management, principles of economics, capital management, business law, government accounting, risk analysis, international finance, information technology, and business ethics. Accounting program graduates need to acquire a thorough understanding of the primary functions within the arenas in which they will work. CPAs who decide to work in public accounting will need to identify their target clientele and become knowledgeable of their accounting and finance needs. Corporate accountants and auditors will need to understand their employers’ accounting practices, as well as how the business operates in terms of functions related to marketing, purchasing, production, and human resources.
Additional education beyond the bachelor’s degree and CPA certification can be acquired in a variety of ways. While it is certainly beneficial to gain as much on-the-job experience as possible, many positions will require additional study accomplished through advanced degrees or specialty certifications.
Certain management and key employment positions in private accounting require a Master of Science (MS) or Master of Arts (MA) degree. In addition to a degree in accounting or financial management, business degrees like a Master’s in Business Administration, Economics, or Information Systems can be valuable. Specialty degrees could include a Master’s in Taxation, Public Administration, or Forensic Accounting.
Some universities offer a five-year combined undergraduate and graduate degree option in accounting to help relieve the burden of the 150 credit hours required for CPA licensure.
Curricula in advanced degree programs will vary greatly because course concentration is always based on the focus or specialty area. Courses will typically include advanced work that emphasizes theory, research, and policy within the specialty area.
The results of a study published in 2011 by the American Accounting Association's journal, Issues in Accounting Education, show that a Ph.D. in accounting can provide a lucrative return on the educational investment. While positions in academia may be the obvious career choices for those with doctorates, there are also many research opportunities within industry and government for CPAs who hold a Ph.D. related to accounting and statistics.
A 2006 review of studies evaluating the personality characteristics of accounting students, working accountants, and accounting program professors was published in The Accounting Educators’ Journal. This review of the findings of various different studies seemed to support the fact that there are a variety of different personality types drawn to accounting.
The summary of research illustrated how the predominant personality type for accounting and business students was ESTJ, which represents the characteristics of extraversion, sensing, thinking, and judging. However, many of the other studies reviewed showed strong results for the STJ type (sensing, thinking, judging). The differences between studies begged the fascinating question: Do accountants truly tend to be more introverted than extroverted?
One study suggested that the extrovert was more likely to become a supervisor while the introvert would probably become an investigator or researcher. However, some senior business partners were reported to have the qualities of introversion and intuition. This led the investigators to conclude that introversion and intuition were attributes just as valuable as extroversion and sensing for upper management and executive positions.
According to the AICPA, several skills help to ensure that a person will make a good accountant. They suggest good leadership abilities, an understanding of good business practices, communication skills, and an aptitude for computer technology.