The business and accounting world is full of abbreviations, but CPA is certainly among the most common, and important, abbreviations to know. CPA stands for certified public accountant, a title that can lead to enhanced job opportunities and salary potential. CPAs take on a number of job responsibilities, and they must complete five years of college plus pass a national examination to earn this title.
The Role of a CPA
A certified public accountant is an accounting professional who works with a wide range of clients, from individual taxpayers to corporations and from nonprofit organizations to governments. CPAs differ from public accountants who don’t earn certification in that they have more education and expanded responsibilities. For example, when a publicly traded company submits reports to the Securities and Exchange Commission (SEC), a federal government commission that regulates investment markets, they must have a CPA sign those statements.
A typical day for a CPA involves working with numbers, forms, and people. Accountants aren’t just number crunchers. In addition to preparing financial statements, CPAs must also interact develop and maintain relationships with their clients. Often, CPAs do more than just prepare financial documents for businesses and individuals. They may discuss short-term and long-term financial goals with their clients and help them plan to achieve those objectives. Accountants work with computer software that analyzes and computes financial data, but they must also have excellent mathematical skills. They spend their days organizing, compiling, analyzing and examining financial records. During tax season, CPAs may work primarily with preparing tax returns. CPAs may find niches such as nonprofit accounting, or they may work with a wide variety of clients. Many accountants – about eight percent of all professionals in the field, according to U.S. News & World Report – are self-employed. In addition to handling clients and paperwork, these accounting professionals must also handle the responsibility of running their own business.
The Path to Becoming a CPA
To become a CPA, candidates must first earn a bachelor’s degree in accounting. However, most states require candidates to have taken 150 semester hours of college-level study in order to sit for the CPA examination, which translates to 30 credits or one year of study more than the typical four-year degree program. To meet this requirement, some students enroll in five-year accelerated programs in which they earn both a bachelor’s and a master’s degree. Other students simply complete additional studies at the bachelor’s level, perhaps completing a double major. Still other students complete their undergraduate degree and begin a traditional master’s degree program in accounting, business administration or taxation. Besides completing the required number of semester hours, candidates must also pass the four-part Uniform CPA Examination, which can take as long as 18 months to complete, before they can earn a license from the Board of Accountancy in their state.
Becoming a CPA takes a good deal of time and hard work. However, government certification can lead to better salaries, better opportunities, and an increase in clients.