One of the reasons why a bachelor’s degree in accounting is one of the top degrees for the highest-paying business careers is because you can use it to become a certified public accountant (CPA). Although you don’t necessarily need a master’s degree to become a CPA, you usually do need additional study beyond the bachelor’s degree at either the graduate or undergraduate level. Some states may allow you to substitute experience for this extra education, but you usually need such a great deal of experience that this option is only practical for late-career certification. New aspiring CPAs are giving up a lot of opportunity if they forgo post-bachelor’s studies and rely on meeting an experience requirement instead.
The Education You Need to Be a CPA
Do you need a master’s degree to attain certification? Technically, the only actual degree requirement for CPA licensure is a bachelor’s degree, according to the United States Bureau of Labor Statistics (BLS). That said, a four-year degree alone isn’t enough to satisfy the complete education requirements needed to become a CPA.
The American Institute of CPAs (AICPA) sets two different educational standards for aspiring CPAs: a degree requirement and a credits requirement. Under the degree requirement, a bachelor’s degree is sufficient, but the 120 college credits that make up a typical undergraduate degree fall considerably short of the 150 credit requirement. A fifth year of full-time study is mandatory in most states.
This credit requirement isn’t a way to force aspiring CPAs to earn a master’s degree. Every state and almost every territory in the United States have adopted the AICPA’s 150 credit recommendation, but none of them expressly require a master’s degree, the AICPA reported. You can earn a master’s in accounting or a Master of Business Administration (MBA) to complete your CPA credit requirement if you like, but you could also pursue further study in a non-degree program at the undergraduate or graduate level. Some students use the extra time in school to pursue a double major as an undergraduate. Students have options to meet the CPA credit requirement while still developing a deeper understanding of the business methods and regulations, tax laws and accounting technologies that prompted the AICPA to increase the credit requirement to begin with.
In addition to requiring 150 total credit hours, states can mandate a minimum number of accounting courses and business courses for CPA candidates. Often, you need at least 24 credits of upper-division accounting courses to qualify for CPA licensure.
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How Much Experience You Need to Substitute For Education
Some states do permit you to substitute experience for this extra year of education, but you need a lot more experience than you probably expect. In New York, for example, there is a 15-year experience pathway that you could pursue instead of meeting the 150 credit hour requirement.
Given the extensive amount of education needed to get out of completing one more year of school, this option isn’t likely to be practical for most new CPA candidates. Even entry-level accountant roles today typically require a bachelor’s degree, so you can’t realistically expect to be hired to a position that would give you the experience you need without at least some college study. Remember, too, that not every state allows you to substitute experience for education, so choosing this route may limit where you can live and work – and it’s more likely that the states that do allow for an experience path will tighten their restrictions further than for more states to begin offering this credentialing option.
Suppose that you do stick it out and work in the field of accounting for 15 years so you can finally satisfy the requirements for an experience pathway to CPA licensure in states that allow for one. You will be in direct competition with job candidates who not only have more education than you do but also likely have more experience as a CPA, since they acquired and began using their credentials earlier in their career.
Although another year of college tuition – or graduate school tuition – isn’t cheap, here’s a huge opportunity cost when you’re looking at needing so many extra years of experience to get certified. CPAs can expect to make 10 to 15 percent more than their peers who don’t have this credential, according to the New Jersey Society of Certified Public Accountants. The pay difference is so pronounced that, over the course of your career, you will likely earn one million dollars more than you would have made without becoming a CPA, the Accounting Institute for Success reported. If you delay getting licensed by 15 years – or even 10 years, accounting for the time you spend in school completing 150 credits – that’s a lot of extra income you’re missing out on by waiting.
There’s already an experience requirement in place for those who meet the 150-credit semester hour requirement. Most states require a minimum of two years of experience, the AICPA reported.