Certified Public Accountant CPA What is a CPA

certified public accountant meaning

Some states allow candidates to sit for the CPA exam before they have graduated from college. Others require accountants to pass an additional professional ethics exam to qualify for licensure. A certified public accountant (CPA) is an accounting professional whose knowledge and abilities meet elevated, standardized requirements. CPAs can also perform professional functions that uncertified accountants cannot legally offer. CPA is a license awarded by the state you want to work in, which allows you to practice as an advanced accountant.

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At this stage, you must furnish materials like academic transcripts and any other state-level requirements that apply. States generally require CPA certification candidates to have at least one year of relevant experience. Most states define one year of experience as 1,800–2,000 hours of work. Applicants https://www.bookstime.com/ must obtain that experience within a specified time frame. It’s important to note that states have different CPE requirements and deadlines. For example, states have different requirements for the number of hours of ethics CPE you’ll have to do, and accept various types of education.

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NASBA charges application and registration fees for the CPA exam. First-time applicants pay an application fee, plus exam fees for each of the four sections. Re-exam applicants pay a reduced registration fee, plus the standard exam fees for each section. For additional state-specific information, refer to NASBA’s CPA exam portal. Government-aligned state agencies issue CPA credentials in the United States. Your exact path to CPA licensure may differ depending on where you live.

You can also search for your state’s board of accountancy or CPA society for online directories. As such, CPAs are often accountants that perform the same duties and functions as an accountant without the designation. CPAs, however, are granted certain roles what is public accounting that only they can perform. These include performing audits of public U.S. companies and preparing audited financial statements for a company, such as a balance sheet or an income statement. The Enron scandal is an example of CPAs not adhering to such a code.

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CPAs have a wide range of career options available, either in public accounting (that is, working for an accounting firm) or corporate accounting (working inside a company), or in government service. Individuals with the CPA designation can also move into executive positions such as controllers or chief financial officers (CFOs). Like most accountants, CPAs perform a wide range of accounting, auditing, tax, and consulting work for corporations, small businesses, non-profit organizations, governments, and individuals.

If you’re looking to take your accounting career to the next level, a CPA designation may be what you need. CPA licensure is the gold standard in the profession and can lead to increased earning potential, career mobility, and prestige. The required years of experience you need to take the CPA Exam vary from state to state, but most call for at least two years working in public accounting. Some states will accept other experiences, such as working in government or industry, but you will generally need more years of such experience. The certified public accountant exam, formally called the Uniform CPA Examination, is a nationally administered test that sets the standards for the skills and knowledge CPAs must possess. Internationally, accounting professionals with similar education and credentials are called CAs, or charted accountants.

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When it comes to managing your money, though, a CPA isn’t necessarily a one-stop shop. You’ll probably need the support of other financial professionals, like certified financial planners, to help shepherd your financial life. The difficulty of the CPA certification process depends on your accounting skills and exam prep.

When a company seeks investors, for example, those investors need to know the company’s financial position. The licensure scheme of the CPA makes sure that the accountant who prepares that audit owes loyalty to more than just their employer. They will perform an audit honestly in order to preserve their own license. Those earning the CPA generally end up as an accountant of some sort. That is, they put together, maintain, and review financial statements and related transactions for companies. Many CPAs file tax forms or returns for individuals and businesses.

As CPAs remain high in demand, and as retiring CPAs leave the market, there is a growing number of job opportunities for newly licensed CPAs. Earning CPA designation can grant opportunities in nearly every industry. The CPA designation is specific to the country in which the exam is taken, though it is a well-known program that is offered in many countries around the world.

  • You’ll probably need the support of other financial professionals, like certified financial planners, to help shepherd your financial life.
  • The Bureau of Labor Statistics (BLS) projects employment for accountants and auditors to grow by 7 percent from 2020 to 2030, which is as fast as the average for all occupations  [5].
  • Review courses for the exam can cost between $1,300 and $3,400, depending on which state administers it.
  • Obtaining the certified public accountant (CPA) designation requires a bachelor’s degree in business administration, finance, or accounting.
  • In addition to keeping and interpreting financial records, CPAs are able to perform other services as a result of the knowledge gained in exam preparation and continuing professional education (CPE) requirements.

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