If you use someone to prepare your taxes or have a firm that performs your company’s compilation, review or audit engagement, you are likely going to be working with a CPA who is signing off on the return or the report to your issued financial statements. You may even have a team of CPAs at providing these services to you. You may understand that these people are accredited to do what they do but do you know everything that goes into being a CPA?
First off, what is a CPA? A CPA is an accounting professional who has completed specific education, exams and work experience to become licensed as a Certified Public Accountant.
Let’s start off with the first piece – Education. To become a CPA, many states require you complete five years of college education (150 credit hours with a certain amount of credit hours in accounting specific courses). Because of this, many CPAs have a Master’s degree to get the extra year of college credits required and many colleges offer a five-year specific program for this.
Once a CPA candidate has completed the necessary education requirements, they can apply to take the Uniform CPA Examination. The Uniform CPA Examination is a set of four tests, taken one at a time, usually over the course of many months. Each exam is on a different topic: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Account and Reporting (FAR) and Regulation (REG). The exams vary in content and design, but each is four hours in length. To pass each exam, you need to score 75 or higher. If you don’t pass, you can retake the course. However, once you have passed your first exam, you must pass the remaining three within 18 months or your first passed exam will time out and you will need to retake it.
The next piece is experience. In Arizona, the experience requirement for CPA licensure is 2,000 hours of work experience supervised by another licensed CPA. The licensed CPA supervisor must sign-off, stating the applicant completed the necessary hours and performed satisfactory work. This experience may be achieved while satisfying the education requirement or while taking the CPA exam. Once a candidate has completed the education, exams and experience requirements, they apply for licensure through the state board of accountancy. Once the application is approved by the state board, they can finally use the CPA credentials next to their name.
However, once you have your license, it doesn’t end there. Every two years, you must renew your license. The renewal process requires CPAs to complete 80 hours of continuing professional education for each renewal. You can get CPE hours from webinars, self-study courses and in-person seminars. Here at Henry+Horne, we provide multiple opportunities through internal and external sources for our CPAs to complete their required CPE and remain up-to-date on the latest changes in the accounting, auditing and taxation profession. Furthermore, there are plenty of training opportunities for industry specific continuing education.
As you can see there is much that goes into becoming a CPA and keeping your license active. Furthermore, the requirements for CPA licensure have evolved, including the structure and content of the CPA exam itself. A CPA who became licensed 30 years ago likely took a difference path than a CPA being licensed today. However, the core requirements of the three E’s (education, examination and experience) have always been there.
If you have any questions, please contact your Henry+Horne advisor.
Jessica Cassavant, CPA