Becoming a CPA from the USA
Becoming a Certified Public Accountant (CPA) in the United States has become more challenging in recent years for several reasons: the type of content tested on the CPA Exam has changed to focus more on the type of real-life tasks CPAs perform; the scope of content on the exam has expanded, and the educational and experience requirements to become certified have increased. This article talks about various aspects of getting a CPA from the USA.
Nevertheless, the CPA credential remains a sought-after goal with proven long-term benefits associated with its achievement. Here is a summary of what you need to know if you want to become a CPA
Who oversees the CPA Exam?
The National Association of State Boards of Accountancy (NASBA) and the American Institute of Certified Public Accountants (AICPA) jointly manage the Uniform Certified Public Accountant Examination (the “CPA Exam”).
NASBA is responsible for administering and scoring the CPA Exam within the 55 separate U.S. licensing jurisdictions—which include the 50 states, the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands, and the Commonwealth of Northern Mariana Islands (CNMI).
The AICPA oversees updates to the CPA Exam. The exam is administered at Prometric test centres. There are over 10,000 Prometric test sites in 160 countries.
Eligibility Criteria for the CPA Exam
Any candidate wishing to sit for the CPA Exam must meet certain educational requirements, though these do vary by jurisdiction so it’s best to verify with your state board.
Typically candidates must have completed either a bachelor’s degree or 120 college credit hours to be eligible. Most states require a minimum number of credit hours in specific business and accounting subjects.
In addition, nearly all states now require that candidates have 150 credit hours (this is sometimes referred to as the “150-Hour Rule”) to become certified, though most states still only require 120 hours to sit for the CPA Exam. Most states also require verified work experience to become licensed, but not to sit for the exam.
CPA Exam structure and scoring
The exam consists of four separate sections;
- Auditing and Attestation (AUD)
- Financial Accounting and Reporting (FAR)
- Regulation (REG)
- Business Environment and Concepts (BEC)
Altogether, the exam sections add up to 14 hours of testing. To pass, you must score at least 75 in each of the four sections within an 18-month period.
In recent years, the AICPA has restructured the exam in an attempt to test higher-level skills like evaluation and analysis rather than just testing your ability to memorize. In addition to multiple-choice questions (MCQs), the exam now includes Task-Based Simulations and Document Review Simulations, which are designed to replicate real workplace situations and require that you leverage your knowledge and experience to answer them.
Simulations make up 50% of your total score on the exam, so it’s critical for you to practice them as part of your exam prep.
CPA Exam “Testing Windows”
Candidates may take the CPA Exam during the first two months of each calendar quarter. These are often referred to as the four “testing windows”:
- January 1 – February 28 (or 29, if it is a leap year)
- April 1 – May 31
- July 1 – August 31
- October 1 – November 30
How to Apply for a CPA Exam section?
To start the testing process, you need to schedule your test at least 5 days before you wish to take a test, though NASBA recommends scheduling 45 days in advance to ensure your space (sometimes even farther out, depending on demand).
To register for the exam, contact your State Board of Accountancy. Once your application has been processed, you will receive a Notice to Schedule (NTS), at which point you may contact Prometric to schedule your exam session.
You may take any or all of the sections on your scheduled test day. However, if you do not pass a portion, you have to schedule to retake that exam in the next testing window.
How do I take the CPA Exam if I live outside the U.S?
If you’re a CPA candidate who wishes to take the CPA Exam in an international location, you must:
- Select a participating jurisdiction (note that Alabama, California, CNMI, Delaware, Idaho, Kentucky, Mississippi, New Jersey, North Carolina, and the Virgin Islands do not currently participate in international CPA Exam administration)
- Contact the Board of Accountancy in your chosen jurisdiction and ensure you meet its eligibility requirements (some, but not all, states require that candidates be U.S. citizens)
- Submit a completed application and any required fees
- To review the requirements to sit for the CPA Exam as an international candidate, click here.
How and when will I get my score?
The AICPA grades all exams and sends the results to the State Boards of Accountancy. Your State Board or jurisdiction will send you your results.
Typically, the AICPA will process test results and release the scores within 30 days of test date, though this can vary, especially soon after the CPA Exam has undergone changes.
How difficult is it to pass the CPA Exam?
Due to many of the factors covered in this article, such as the additional type of content and the ever-expanding scope that it covers as legislations change and grow, CPA Exam pass rates have declined in recent years.
National pass rates exceeded 50% for many years, but pass rates for individual sections now average between 45% and 50%, according to AICPA. Students often pass one or two sections but struggle to pass all four sections within the 18-month time frame.
How to increase my chances of passing the Exam?
Because it is so challenging to pass all four sections of the CPA Exam, most students seek the help of a prep course. The most popular CPA Review courses are now online and/or self-study based, versus classroom-based.
Most follow a traditional “linear” learning approach, where students are instructed to study every topic in the order in which the course presents it, from the first chapter to the last chapter. Becker is a well-known example of this kind of traditional, linear course.
More modern CPA Review courses, such as Surgent CPA Review, use adaptive learning technology to streamline the study process and personalize studies to each student’s specific weaknesses.
Rather than trying to study every lecture, textbook, and test bank question—which most candidates simply don’t have time to do—students using adaptive learning technology focus their study time on the specific topics they don’t know well, which typically saves many hours of study time.
In the end, as the low CPA Exam pass rate indicates, the road to becoming a CPA can be long and difficult. But studies have shown that CPAs make, on average, $1 million more over their career than non-CPA accounting professionals, so the effort can certainly pay off.
Be sure to research eligibility and experience requirements and be diligent in selecting a CPA Review course that you’re confident will help you pass all four sections the first time.