Poor Blair Bindley never saw it coming.
An independent screenwriter living and working in Arizona, Bindley sold a couple of his works to companies based in California. Since Hollywood is where the American film industry is based, that doesn’t come as much of a surprise.
What surprised Bindley was that, despite not incorporating his business in the state, or living there, or even working there, he still received a big bill from the California Franchise Tax Board. On top of that, he was penalized for failing to file a return he never even knew he was supposed to fill out.
The Tax Board decided their authority meant that Bindley, or anyone else unlucky enough to be getting paid by one of the more than 3 million businesses operating in the Golden State, is on the hook for filing a return and coughing up enough to cover some of the highest tax rates in the country.
This bad news for Bindley is great news for accounting pros in California, though. According to the Tax Foundation, California ranks 49 out of 50 when it comes to the state business climate. Multiply Bindley’s case by those more than 3 million companies and their vendors and employees, and it’s easy to see how CPAs here have a ticket to ride on the gravy train of sorting out complex and expensive accounting issues.
That’s why many accounting professionals learning how to become a CPA in California start thinking about specializing in taxation. With the 5 steps you’ll find here, you will get the kind of knowledge and expertise you need to sort out problems for the Blair Bindleys of the world, or any of the bigger businesses in or outside the state.
5 Steps to Becoming a CPA in California
- Get your Education in California
- Take the Uniform CPA Exam in California
- Gain the Necessary Experience in California
- Get your California CPA License
- Continuing Education in California
1. Get Your Education
a. Find out about accounting programs at California colleges and universities. The California Board of Accountancy states that all certified public accountants must have at least a bachelor’s degree degree and 150 semester units of education as noted below.
b. If you are still attending school or have just graduated, make certain that the California Board of Accountancy will accept your college credits. The program you attend must be through an institution accredited by any one of the national or regional accrediting agencies listed in the U.S. Department of Education Database of Accredited Postsecondary Institutions and Programs.
If you attended a foreign college or university, your credentials must be evaluated by a Board-approved foreign credentials evaluation service. The credentials evaluation service you use must be a member of one of the following bodies:
- National Association of Credential Evaluation Services
- National Association for Foreign Student Affairs Association of International Educators
- American Association of Collegiate Registrars and Admission Officers
c. Enroll in the correct classes. You must possess a bachelor’s degree at the time you sit for the Uniform CPA Exam. Your credits must total 150 and include the following:
- 24 semester hours of accounting courses including (but not limited to):
- Accounting
- Auditing
- External or internal reporting
- Financial reporting
- Taxation
- Financial statement analysis
- 24 semester hours of business-related courses including (but not limited to):
- Business communications
- Business administration
- Business management
- Business law
- Business related law courses taken at an accredited law school
- Economics
- Computer science
- Information systems
- Finance
- Marketing
- Mathematics
- Statistics
- Any accounting courses exceeding the 24 semester hours of accounting courses in the first bullet above
- 20 semester hours in accounting study including (but not limited to):
- At least 6 semester hours in accounting subjects
- No more than 14 semester hours in business-related subjects
- No more than 9 semester hours in other business and accounting courses, with no more than 3 semester hours in any one area, such as:
- Industry-based courses in real estate, architecture and engineering
- Foreign languages/cultural and ethnic studies courses
- Skills-based courses in social science, natural science, life science, physical science, journalism, communications, and English
- No more than 4 semester hours in internships or independent studies in accounting or business-related subjects
- Note: if you complete the requirements for a Master of Accounting, Master of Taxation or Master of Laws in Taxation, this counts for the entire 20 semester hours of accounting study required for CPA licensure in California
- 10 semester hours in ethics study including:
- No more than 10 semester/15 quarter hours in courses with these titles:
- Professional responsibilities
- Morals
- Legal Environment of Business
- Fraud
- Corporate Social Responsibility
- Business Law
- Business, Government and Society
- Organizational Behavior
- Management of Organizations
- Human Resources Management
- Ethics
- Corporate Governancee
- Business Leadership
- Auditing
- No more than 3 semester hours of 4 quarter hours in introductory, fundamentals, foundations, general, principles or survey courses in these areas:
- Theology
- Religion
- Philosophy
- No more than one semester hour in a course on financial statement auditing
- No more than 10 semester/15 quarter hours in courses with these titles:
2. Take The Uniform CPA Exam
Once you have been granted a bachelor’s degree and fulfilled the course requirements of the California Board of Accountancy (CBA), you are ready to take the Uniform CPA Examination.
a. Ask your college to mail your official college transcript directly to the CBA at Examination Unit, 2000 Evergreen Street, Suite 250, Sacramento, CA 95815-3832.
b. Register online at the CBA’s website to take the Uniform CPA Exam. Here you will create a Client Account. In approximately two days, the CBA will email you a password that will allow you to print a CPA Exam Application Remittance Form. (If you would rather apply via paper application, please contact the CBA at (916) 561-1703 to request one).
c. Mail your CPA Exam Application Remittance Form with the application fees ($100 fee for first-time applicants) to the CBA at the above address. If you will need disability testing accommodations, submit the Accommodation of Disabilities Request form as well at this time.
d. Wait to receive an Authorization to Test (ATT) from the Board by mail after your application has been approved. At this time, you will be given instructions to go online and select the exam sections you wish to take.
e. Wait to receive your payment coupon from the National Association of State Boards of Accountancy (NASBA). You will have 90 days from receipt of the coupon to submit fees to NASBA via mail, over the telephone, or online.
f. Wait to receive your Notice to Schedule (NTS) from NASBA. When they have received your fees the NTS will be mailed, faxed or emailed to you (depending upon which method you chose previously).
g. Go to Prometric’s website to schedule the Uniform CPA Exam.Centers are located in:
- Glendale
- San Francisco
- Camarillo
- San Bruno
- Alameda
- Fair Oaks
- San Jose
- Fresno
h. Arrive at the correct Prometric testing site on examination day prepared to test.
i. Wait to receive an exam score report by mail from the CBA.
For detailed information on the Uniform CPA Exam, click here.
3. Gain The Necessary Experience
In order to become licensed as a CPA, California requires applicants to complete prescribed work experience. You must complete 12 months of general accounting experience and 500 hours of attest experience. The general accounting experience must be as follows:
- Involve the use of consulting, tax, financial advisory, management advisory, compilation, attest or accounting skills
- Be gained through employment in government, private industry or public industry. Employment in academia does not fulfill the requirement.
The general accounting experience must be documented .
- If earned in public accounting, it must be documented on the Certificate of General Experience – Public Accounting Form. A licensed CPA must supervise the work and sign this document.
- If earned in private industry or government accounting, it must be documented on the Certificate of General Experience – Non-Public Accounting Form. A licensed CPA must supervise the work and sign this document. If the licensee is the owner of the private industry company, a second signature is not required. If the licensee is not the owner, however, a second person with a higher level of responsibility within the company must sign the form. The second signer need not be a licensed CPA.
The attest experience must be as follows:
- Involve experience in planning the audit and selecting procedures
- Involve experience in applying a variety of auditing techniques and procedures
- Involve preparing working papers
- Involve preparing written comments and explanations on the work performed
- Involve preparing and reporting full disclosure financial statements
The attest experience must be documented.
- If earned in public accounting, the attest experience must be documented by your employer on the Certificate of Attest Experience-Public Accounting Form. The signer must have the authority to perform attest services.
- If earned in private industry or governmental accounting, the attest experience must be documented by your employer on the Certificate of Attest Experience – Non-Public Accounting Form. The signer must have the authority to perform attest services.
All forms must be submitted to the California Board of Accountancy, 2000 Evergreen Street, Suite 250, Sacramento, CA 95815-3832.
4. Get Your California CPA License
Upon meeting the California Board of Accountancy’s educational requirements, passing the Uniform CPA Examination, and fulfilling the state’s experience requirements, you are ready for CPA licensure. Make sure that you have not missed any of the following steps:
a. Checklist
- Earn a bachelor’s degree with 150 total semester hours and the correct amount of accounting and business courses
- Ask your college to mail official college transcripts to the CBA at Examination Unit, 2000 Evergreen Street, Suite 250, Sacramento, CA 95815-3832
- Pass the Uniform CPA Exam.
- Complete work experience. Have your supervising CPA mail all applicable Certificates of Experience to the CBA at 2000 Evergreen Street, Suite 250, Sacramento, CA 95815-3832
- Submit a 2” x 2” photo of yourself.
- Submit all applicable fees.
b. Apply for your California CPA License. Use the Application for Certified Public Accountant License. Mail it, along with a Fingerprinting Request and a Criminal Conviction Disclosure Form (if necessary) and applicable fees, to the address above. Applicable fees:
Interstate Reciprocal License
The California Board of Accountancy makes it easy for you to receive a reciprocal CPA license in the state if you hold a CPA certificate or license from another state. The Application for Certified Public Accountant License form has sections for those who hold a CPA license in another state.
- First, complete the Authorization for Release of Examination & Licensure Information form. Mail this form to the Board of the state where you hold your CPA license or certificate.
- Have your college send an official transcript and copy of your diploma to the Board.
- Provide Certificates of Experience to verify your work experience of one or two years.
- Complete the proper sections of the Application for Certified Public Accountant License form for applicants who hold a CPA license in another state.
- Submit all necessary fees and information to the CBA at 2000 Evergreen Street, Suite 250, Sacramento, CA 95815-3832
International Reciprocal License
Do you hold a CPA license in another country? If you have passed either the Canadian Chartered Accountant Uniform Certified Public Accountant Qualification Examination (CAQEX) or the International Uniform Certified Public Accountant Qualification Examination (IQEX), you may be eligible for a reciprocal CPA license in California. These individuals are classified as “Type E” under the CBA’s qualification system and are eligible to use the state’s Application for Certified Public Accountant License form and fill out the appropriate sections.
- Note that you must have a U.S. social security number in order to apply for a California CPA license
- Have your foreign credentials evaluated by one of the approved agencies listed in step 1
- You must fulfill all educational, examination and experience requirements
- Other forms necessary for Type E applicants include:
- Criminal Conviction Disclosure Form
- Fingerprint Packet
- General and/ or Attest Certificates of Experience in Public Accounting and/or Non-Public Accounting
- Documentation of passage of the California Professional Ethics (PETH) Examination
- Original letter from the AICPA or NASBA stating that you passed the CAQEX or IQEX exam
- A 2” x 2” photograph of yourself
- All applicable fees
- Mail the Application for Certified Public Accountant License and all above documentation to the CBA at 2000 Evergreen Street, Suite 250, Sacramento, CA 95815-3832
If you hold a CPA license or Chartered Accountant credential from any of the jurisdictions below, the California Board of Accountancy will allow you to take the IQEX to become licensed in the state:
- Institute of Chartered Accountants in Australia (ICAA)
- CPA Australia (CPAA)
- Canadian Institute of Chartered Accountants (CICA)
- Instituto Mexicano De Contadores Publicos (IMCP)
- Institute of Chartered Accountants in Ireland (ICAI)
What should you do if you hold a license in one of the above jurisdictions?
- Request that your jurisdiction’s credentialing agency send a Letter of Good Standing to NASBA
- Apply here to take the IQEX. Mail your application, fees and any supporting documentation to: NASBA, Attn: IQEX, P.O. Box 440555, Nashville, TN 37244
- NASBA will send you a Notice to Schedule (NTS) the IQEX by mail or email, at which time you may schedule your test through Prometric.
- Test results will be mailed to you as they are available.
If your foreign CPA license is from a jurisdiction not listed here, you must follow California’s regular licensing procedure, beginning with qualifying for and taking the Uniform CPA Exam.
5. Stay Current Through Continuing Professional Education in California
As a licensed CPA in California, you must complete continuing professional education (CPE) hours to keep your license active and current.
a. Complete 80 hours of CPE every two years
- At least 20 hours of CPE must be completed in one year
- At least 12 hours of CPE must be completed in approved subjects each year (listed below)
- At least 4 hours of CPE must be completed in ethics every two years
b. Understand and Adhere to CPE requirements and rules for specific positions:
- Government auditors must complete:
- 24 hours of CPE every two years in government auditing, accounting or related subjects.
- 8 hours of CPE in fraud detection and reporting.
- Auditors working in other capacities must complete:
- 24 hours of CPE every two years in subjects including: financial statement preparation and/or reporting, reviews, auditing, industry accounting, compilations, assurance services, attestation services.
- 8 hours of CPE in fraud detection and reporting.
- At least 50% of your CPE hours must come from the following subjects:
- Accounting
- Auditing
- Fraud
- Taxation
- Consulting
- Financial planning
- Ethics
- Regulatory review
- Computer and information technology (except for word processing),
- Specialized industry or government practices having to do with public accounting skills and knowledge.
- No more than 50% of your CPE hours may come from the following subjects:
- Communication skills
- Word processing
- Sales
- Marketing
- Motivational techniques
- Negotiation skills
- Office management
- Practice management
- Personnel management
- Avoid the following subjects, which do not count towards CPE credit:
- Personal growth
- Self-realization
- Spirituality
- Personal health and/or fitness
- Sports and recreation
- Foreign languages and cultures
- Other subjects which do not contribute directly to the professional competence of a CPA
c. Enroll in approved CPE formats and acceptable programs, including:
- Professional development programs of national and state accounting organizations
- Technical session at meetings of national and state accounting organizations and their chapters designed as formal educational programs
- University or college credit courses (one semester hour of credit equals 15 hours of CPE credit)
- University or college non credit courses (one classroom hour equals one hour of CPE credit)
- Interactive webcasts that relate to a CPA’s professional competency
- Formal correspondence programs
- Self-study programs that contribute to a CPA’s professional competency
- Instructing, leading a discussion, teaching or speaking on an approved topic or subject relating to a CPA’s professional competency (may only use such formats for 50 percent of your total CPE credit)
- Writing published articles, books and instructional materials that contribute to a CPA’s professional competence
- Writing questions for the Uniform Certified Public Accountant Examination (may only account for 25 percent of your total CPE credit)
You can find acceptable CPE programs in California through these organizations:
- California Society of Certified Public Accountants
- American Institute of CPAs
- NASBA’s National Registry of CPE Sponsors
- California colleges and universities
d. Report your CPE credit hours at the time of your CPA license renewal using the CPE Reporting Worksheet. Keep records of your CPE hours for no less than five years. These records should include:
- Name and description of course
- Sponsor of course
- Location of course
- Dates of attendance
- Method of presentation
- Number of CPE hours claimed
Now that you’re a CPA in California
Congratulations! Your hard work and studying has paid off, and you are now a licensed California CPA! One professional organization that you might want to consider joining is the American Institute of CPAs (AICPA). This national professional organization provides members with networking and development opportunities, continuing professional education programs and professional guidance. These same opportunities are available at the state level when becoming a member of the local California Society of Certified Public Accountants.
Do you want to specialize? If so, you have many choices, including finance, management, governmental accounting, auditing, information systems accounting and forensic accounting.