What is a Certified Public Accountant?
A Certified Public Accountant (CPA) is a licensed accounting professional who performs a variety of services, including tax preparation, auditing, bookkeeping, and financial consulting. The CPA designation is awarded to individuals who successfully pass the CPA Exam, which is administered by the American Institute of Certified Public Accountants (AICPA). CPAs are highly trained and knowledgeable in all areas of accounting and taxation, making them an essential asset to individuals and businesses alike.
How Do I Become a CPA?
The path to becoming a CPA is rigorous and involves several steps:
- Education: Candidates must complete 150 semester hours of education, which typically includes a bachelor's degree in accounting or a related field, and often additional graduate coursework.
- Examination: Candidates must pass the Uniform CPA Examination, which is administered by the American Institute of Certified Public Accountants (AICPA).
- Experience: Most states require candidates to gain a specific amount of professional work experience under the supervision of a licensed CPA.
- Licensing: After meeting educational, exam, and experience requirements, candidates can apply for a CPA license through their state’s Board of Accountancy.
How Much Do CPAs Make?
CPAs are in high demand, and their career paths can be diverse, offering opportunities in various industries and roles. Salaries for CPAs vary based on factors such as location, experience, and industry. On average, CPAs earn more than non-certified accountants, with starting salaries ranging from $51,000 to $74,000. Experienced CPAs can earn significantly more, with those having over 20 years of experience averaging around $150,000 annually. Salaries can exceed six figures, especially for those in management positions or working for large firms like the Big Four (Deloitte, EY, PwC, and KPMG).
What Are the Requirements in New York State?
Being licensed as a Certified Public Accountant in New York State you must means a candidate must:
- be of good moral character
- be at least 21 years of age
- meet education requirements
- meet examination requirements
- meet experience requirements
The specific requirements for licensure are contained in Title 8, Article 149, Section 7404 of New York's Education Law and Part 70 of the Commissioner's Regulations. You should also read the general licensing information applicable for all professions.
What's the Difference Between an Accountant and a CPA?
CPAs are distinguished from other accountants by their ability to provide audited financial statements and represent clients in IRS audits. They can work in numerous sectors, including public accounting, corporate finance, government, and non-profit organizations. The primary difference between an accountant and a Certified Public Accountant (CPA) lies in the level of certification and the scope of services they can provide. Ultimately, deciding between an accounting career and pursuing the CPA comes down to a personal choice.
Extra Credit: SUNY Fredonia Insight: What is an Accountant? What do Accountants Do?
Education and Certification
- Accountant: Generally requires a bachelor's degree in accounting or a related field. Accountants do not need to be licensed to practice, although they can pursue additional certifications to enhance their skills and career prospects.
- CPA: Must meet specific educational requirements, pass the CPA exam, and obtain a license from your state. This process includes completing 150 semester hours of education, which often involves additional coursework beyond a bachelor's degree, and fulfilling work experience requirements.
Scope of Work
- Accountant: Can handle a variety of financial tasks such as bookkeeping, tax preparation, and financial reporting. They provide valuable financial advice and help with financial planning but lack the legal authority to perform certain tasks that require a CPA license.
- CPA: Has the legal authority to perform specific duties such as auditing financial statements, representing clients in front of the IRS, and filing reports with the Securities and Exchange Commission (SEC). CPAs often specialize in areas like taxation, auditing, and consulting, and are held to higher ethical standards due to their licensure.
Legal and Ethical Standards
- Accountant: Not subject to the same licensing requirements or ethical codes as CPAs. They can provide many of the same services but do not have the authority to perform audits or represent clients in legal tax matters.
- CPA: Must adhere to a code of ethics and is subject to oversight by your respective state. This includes maintaining continuing education requirements to stay current with industry standards and regulations.
A Goal Within Reach
Pursuing a CPA designation is an attainable goal for accounting majors, presenting a pathway to enhanced career prospects and earning potential. With determination, the right educational foundation, and practical experience, students can navigate the requirements for certification confidently. It is essential for students to engage with their academic advisors, who can provide valuable guidance and resources tailored to help them prepare for the CPA journey. By taking this proactive step, aspiring CPAs can set themselves on a successful career trajectory.
