If you’re looking for a prestigious accounting career with great earning potential and job prospects, CPA could be the perfect fit for you. CPA is an accounting credential you can only attain once you have gained the required education and experience and passed a notoriously challenging professional examination. Once you meet these requirements, though, you will be equipped with the legally required credentials to perform necessary accounting tasks and the skills and knowledge to attain a promotion to a senior-level role or to be your own boss in your own accounting firm.
The Role of a CPA
As the name of the certification suggests, CPAs often work in the field of public accounting. What this means is that they work with financial data that clients are legally obligated to disclose, according to the United States Bureau of Labor Statistics (BLS). Their work responsibilities are broad and varied, but they may include preparing tax forms for individuals or creating the balance sheet statements corporations must provide to prospective investors.
Not all public accountants are licensed CPAs, but those that are can perform job duties that accountants without the CPA credential cannot. For example, only a CPA is legally permitted to file a report with the Securities and Exchange Commission, which publicly traded companies must have done annually as well as quarterly. CPAs also have more extensive accounting knowledge, which means they are better equipped to act as business consultants, advise on how tax regulations could affect business decisions and investigate fraud.
CPAs can also choose to work in private accounting, in which they act as in-house employees who manage the company’s internal financial documents.
Earning Potential for Certified Public Accountants
Accounting is known as a profitable profession, but salaries are substantially better for CPAs than for more general role of accountant. From the time CPAs first earn their credentials, they start to see a boost in income. The average starting salary for a CPA is $66,000 per year, according to The Houston Chronicle. That’s a great deal higher than the $52,922 average starting salary for accountants with undergraduate degrees. In fact, starting salaries for CPAs are almost as high as the $69,350 median wage for accountants and auditors at all levels of experience.
The CPA credentials proves its worth throughout an accountant’s career. Accountants with a CPA license generally earn 10 to 15 percent more than their peers who don’t have CPA credentials, according to the Association of International Certified Professional Accountants (AICPA). Over the full course of their work life, this pay boost can add up to an additional $1 million. When you become a CPA, you are also positioning yourself as a candidate for promotions to lucrative senior-level roles. Some of these roles, such as Tax Director, Director of Accounting, Director of Financial Reporting and Controller, earn six-figure salaries.
Since most states require CPA candidates to have a minimum of two years of experience to sit for the CPA exam, even entry-level CPAs aren’t fresh out of college with no work experience.
Becoming a CPA
Given the high earning potential for the career path, you may wonder what you would need to do to get started as a CPA. The first requirement you must meet is earning a college degree in accounting. Technically, you need only a bachelor’s degree to be eligible to take the CPA exam. However, most states require CPA candidates to have a minimum of 150 semester hours of study, rather than the 120 semester hours required to earn a typical bachelor’s degree. This means that, if you want to be a CPA, you should plan on spending at least five years in school.
Students can meet this additional study requirement in different ways. Some choose to use their extra year of studies to double major in a second undergraduate program of study that they find useful, such as finance or computer information systems. Others spend the time working toward a master’s degree in accounting. Still others take undergraduate or graduate courses without working toward an official degree. Whether you choose to gain these extra 30 semester hours at a community college or a prestigious graduate school, completing additional coursework is necessary to become a CPA in most states.
Experience is also necessary, with most states requiring prospective CPAs to have at least two years of professional experience in accounting. Last, but certainly not least, is the requirement to earn a passing score on a difficult and demanding professional examination, the AICPA’s four-part Uniform CPA Examination.
The average passing rate for the CPA exam is around 50 percent, though that rate was down to 30 percent in the early 2000s, according to Accounting Today.