Being familiar with the CPA requirements is necessary so you can make the proper preparation. The following are the basic qualifications. However, each state has additional needs so it’s best to check first.
The 150 Hour Rule
You must have at least a US bachelor’s degree in accounting / business. You must have the minimum credit hours required for accounting / business study. In addition you must have one more year of study.
This will total 5 years and is known as the 150 hour rule. The 150 rule is in effect in 45 states. Some states though, do not adhere to this regulation.
The CPA Uniform Exam
The CPA requirements can be summed up by the three Es. These are education, experience and examination. The actual test is the same throughout the United States. But the requirements of each state differ.
Once you meet these requirements, you can apply for the Uniform CPA Exam. The Individual State Boards of Accountancy will determine the other requirements. However the prerequisites mentioned earlier will almost certainly be needed. For overseas accountants, the International Qualification Examination is usually taken.
1 Tier and 2 Tier System
The states may use a 1 tier or 2 tier system. Under the 1 tier system, an examinee that passes the test will be granted the license after attaining a specified working experience / hours. The CPA requirements and process for the 2 tier system is different. Here the license and certification are given simultaneously.
Issuance of CPA certificates rather than licenses is increasingly becoming the norm. The 2 tier states can issue a certificate without any work experience needed. In some places like Massachusetts, a superior academic background is given importance over the working experience. But other states still demand working experience.
An increasing number of state boards have implemented ethical examinations. Most use the AICPA self-study Professional Ethics for CPAs CPE course. But other states have designed their own tests. Currently 40 state boards make use of these tests. Be sure to check the status in your own area, as it may differ.
The CPA requirements also come with the CPE (Continuing Professional Education). These are tests undertaken to renew their license / certificate. The frequency is two to three years.
The total time is 40 to 80 hours. The study can consist of seminars or self study.
However the study is conducted, the CPA must pass the test to get the credit. Most now include the ethics test. This takes at least 2 hours and up to 8 hours.
The most basic task of the CPA involves public accounting and auditing. They can also work as business advisors. These individuals also prepare tax records and statements.
In addition they work as financial analysts, IT for accounting and venture capital. Debt management, corporate governance and various forms of forensic accounting can also be part of their duties.
Because some CPA requirements are state dependent, it’s best to review the regulations in your area. This will ensure you meet the prerequisites.