Accounting is a major industry, one that employed more than 1.1 million individuals across the country in 2013. Within that national group of accountants are a special class of professionals: Certified Public Accountants.
A Certified Public Accountant, or CPA, is an accountant who has completed additional educational, examination and education requirements to earn a CPA designation, allowing them to work in a variety of sectors from public accounting to taxation, private firms to health care. Among the broader category of accounting careers, CPAs potentially have better job prospects, due to their additional training and education.
CPAs may handle a number of responsibilities based on their position and occupation. They could work as a financial analyst for a small accounting firm or work as the chief financial officer for a multimillion dollar company.
Education and Licensing Requirements for CPAs
The American Institute for Certified Public Accountants (AICPA) outlines the steps to become a CPA as Education, Examination and Experience.
The basic educational requirement for CPAs is a bachelor's degree in accounting that typically includes 150 semester hours of study. However, specific requirements vary by state and students are encouraged to review their state's educational rules.
Prospective CPAs must qualify for and successfully pass the Uniform CPA Examination that is sponsored by the AICPA. The examination covers four major topic areas including:
- Auditing and Attestation
- Business Environment and Concepts
- Financial Accounting and Reporting
Candidates seeking a CPA designation must meet their state's experience requirements prior to receiving a license to practice. The AICPA notes that many states require prospective CPAs to work at least one to two years under the supervision of a licensed CPA. Additionally, regulations may vary at the state level depending on educational degree, the specific employer, as well as the type of work (for instance, auditor vs. tax professional).
Upon meeting state requirements, prospective CPAs may apply for a CPA license, which grants them the right to practice public accounting. Again, it is important to contact the state board of accountancy to see if additional tests are required (e.g. ethics exams) to qualify for licensure.
CPA boards and state societies
Prospective students should become familiar with not only the AICPA, but their state accounting societies and state boards of accounting as well. State societies are membership-based organizations designed to assist its members understand state requirements, provide continuing education programs and more.
On the other hand, state boards of accountancies are the rule-setting organizations, creating and maintaining educational requirements and handling CPA eligibility regulations. These boards are also responsible for CPA licensing and subsequent licensing renewals.
A Popular and Growing Career Field
The demand for trained, qualified CPAs remains on the upswing, as more than 40,000 individuals were hired by public CPA firms in 2012, according to the AICPA report. Accounting was also named as one of the best careers in 2014, by both US News and World Report and CareerCast.
In turn, the hiring market is becoming competitive for the talents of Certified Public Accountants, according to Robert Half's 2015 "Salary Guide for Accounting and Finance." That data shows there is demand being created by public accounting firms and businesses desiring to hire top talent, but entry-level positions are also becoming competitive as well.
Among the most desired credentials are a CPA designation and an MBA for those seeking senior level roles in finance. During the past decade, enrollment figures reveal the growing popularity of securing accounting degrees, MBA degrees and CPA licenses. According to the 2013 "Trends in the Supply of Accounting Graduates and the Demand for Public Accounting Recruits" from the American Institute for Certified Public Accountants, enrollment in accounting programs increased every year between 2001 and 2012:
- Master's degree in accounting: 135.06% growth between 2001 and 2012
- MBA in accounting: 26.25% growth between 2001 and 2012
So, what does this competition mean? The 2015 Robert Half report reveals the following:
- There is a lack of talent at the senior accountant level
- Individuals with three-plus years of experience are in great demand
- Firms are recruiting entry-level talent out of college
Salary and Career Potential for CPAs
CPAs can be found across a spectrum of industries from public accounting to health care. Other industries include banking, financial markets, management services, tax services and more. Additionally, Certified Public Accountants may work in a variety of positions, depending on their specific industry or organization, such as the following:
- Forensic Accountant
- Budget Analyst
- Tax Director
- Director of Finance
- Chief Financial Officer
Overall, pay varies widely, based on industry, experience, location and position. However, based on data from Robert Half's 2015 report, earning CPA certification could be worth the investment. Below is a sample list of careers in accounting with their projected 2015 salary ranges from Robert Half's 2015 report:
- Vice President of Finance (small company): $96,250 to $133,250
- Director of Accounting (small company): $85,500 to $116,750
- Controller (small company): $79,250 to $106,000
- Manager of Tax Services (small company): $88,750 to $123,250
- Manager of Management Services (small company): $79,000 to $104,500
- Audit Manager (small company): $79,500 to $103,500
- Controller (small firms): $92,000 to $123,500
- Financial Planning Manager: $90,000 to $120,500
- Internal Auditing Manager: $91,000 to $126,000