Certified Public Accountant (CPA) is the title of qualified accountants in numerous countries in the English-speaking world. In the United States they will have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for membership in their respective professional accounting bodies and certification as a CPA. In most U.S. states, only CPAs who are licensed are able to provide to the public attestation (including auditing) opinions on financial statements.
Services provided by CPAs
CPAs have a niche within the income tax preparation industry. Many small to mid-sized firms have both a tax and an auditing department. Along with attorneys and enrolled agents, CPAs may represent taxpayers in matters before the Internal Revenue Service.
Whether providing services directly to the public or employed by corporations or associations, CPAs can operate in virtually any area of finance.
In order to become a CPA in the United States, the candidate must sit for and pass the Uniform Certified Public Accountant Examination (Uniform CPA Exam), which is set by the American Institute of Certified Public Accountants (AICPA) and administered by the National Association of State Boards of Accountancy (NASBA). The CPA was established in law on April 17, 1896.
Eligibility to sit for the Uniform CPA Exam is determined by individual state boards of accountancy. All states have adopted what is known as the “150 hour rule”, which usually requires an additional year of education past a regular 4 year college degree, or a master’s degree.
The Uniform CPA Exam tests general principles of state law such as the law of contracts and agency (questions not tailored to the variances of any particular state) and some federal laws as well1.
Other licensing and certification requirements
Although the CPA exam is uniform, licensing and certification requirements are imposed separately by each state’s laws and therefore vary from state to state.
State requirements for the CPA qualification can be summed up as the Three Es—Education, Examination and Experience. The education requirement normally must be fulfilled as part of the eligibility criteria to sit for the Uniform CPA Exam. The examination component is the Uniform CPA Exam itself.
Over 40 of the state boards now require applicants for CPA status to complete a special examination on ethics, which is effectively a fifth exam in terms of requirements to become a CPA.
Continuing Professional Education (CPE)
CPAs are required to take continuing education courses in order to renew their license. Requirements vary by state but the vast majority require an average of 40 hours of CPE every year with a minimum of 20 hours per calendar year. The requirement can be fulfilled through attending live seminars, webcast seminars, or through self-study (textbooks, videos, online courses, all of which require a test to receive credit). As part of the CPE requirement, most states require their CPAs to take an ethics course during every renewal period. Again, ethics requirements vary by state but the courses range from 2–8 hours.
State CPA association membership
CPAs may choose to become members of their local state association or society. Benefits of membership in a state CPA association range from deep discounts on seminars that qualify for continuing education credits to protecting the public and profession’s interests by tracking and lobbying legislative issues that affect local state tax and financial planning issues.
CPAs who maintain state CPA society memberships are required to follow a society professional code of conduct (in addition to any code enforced by the state regulatory authority), further reassuring clients that the CPA is an ethical business professional conducting a legitimate business who can be trusted to handle confidential personal and business financial matters. State CPA associations also serve the community by providing information and resources about the CPA profession and welcome inquiries from students, business professionals and the public-at-large.
From Wikipedia, the free encyclopedia