Becoming an accountant is more than just being good with numbers, although this is certainly an important factor. There are many strong reasons that makes accountancy a good choice for your career.
The American Institute of Certified Public Accountants (AICPA), which is one of the most prestigious professional accounting organizations in the United States, summed up the accounting Degree fittingly. It is one degree that prepares you to become a successful entrepreneur, partner in a renowned accounting firm or manager in finance enterprises.
TotalJobs.com maintains that many businesses rely on their accountants and bookkeepers to perform multifaceted tasks with absolute precision. “For that reason, the people who succeed in this industry thrive on routine. They also have an incredible eye for detail as well as methodical and rigorous approach in doing things.”
Status as Certified Public Accountants
The National Association of State Boards of Accountancy (NASBA) says that the primary goal of accounting students is to become Certified Public Accountants or CPAs. The license makes the difference. The CPA is respected by colleagues, clients and the business community in general. These licensed accountants are perceived as the “cream of the crop” in the accounting world. Certified Public Accountants go through years of education and practicum training. Graduates need to review and pass the difficult state board examinations. Several years of on the job training is also mandatory. This trademark of competency is one of the reasons that make the CPA stand out.
- Career growth is one good reason to pursue an accountancy degree. Earning the much-coveted CPA accreditation manifests full commitment to the profession. Moreover, this license is imperative for accounting professionals who wish to earn promotions as well as complex responsibilities. In fact, it is not odd for experienced accountants to aim for Master’s Degrees in Accounting and become certified CPAs.
- It is a guarantee for career security. The need for accountants has not waned. On the contrary, the US Department of Labor says that demand has risen and this scenario is not expected to change in the near future. The dearth of accountancy graduates is due to the Internet boom which started in the early nineties. Younger people have become more enamored with jobs in Information Technology and web-based marketing. However, the passing of the Sarbanes-Oxley Act (2002) propelled the need for more qualified CPAs to sustain superior standards of public corporate accounting.
- “It is an act passed by U.S. Congress in 2002 to protect investors from the possibility of fraudulent accounting activities by corporations. The Sarbanes-Oxley Act (SOX) mandated strict reforms to improve financial disclosures from corporations and prevent accounting fraud. This was enacted in response to the accounting scandals in the early 2000s. Scandals such as Enron, Tyco, and WorldCom shook investor confidence in financial statements and required an overhaul of regulatory standards.” (Source: Investopedia.com)
- Job fulfillment and diversity should serve as motivation for prospective CPAs. You can choose from different specialized fields such as Auditing, Business and Management Consulting, Information Technology, International Financial Reporting, and Tax Advisory Services. Nearly all enterprises come across financial situations at some time where the services of accountants will be needed. At the same time, the CPA is exposed to more opportunities due to the adoption of world-class benchmarks in global financial reporting.
- Financial remuneration is a primary incentive. It is just natural for professionals to look for careers that offer high salaries and numerous incentives. Based on figures provided by PayScale.com, the average compensation for CPAs is almost $60,000 annually. If you were to include bonuses and profit-sharing, this can reach almost $100,000 every year.
- Accountancy is a profession that facilitates intellectual development of crucial thinking aptitude, analytical capacity and potential to solve problems. Employers respect professionals committed to learning and building up new skills. Besides, the profession is very prestigious and ranks among the most respected occupations in the United States.
Outlook for Accountants
The US Bureau of Labor Statistics disclosed that employment prospects for accountants together with auditors are seen as increasing by at least 20 percent until 2018. Likewise, economic analysts forecast that economic progress, retirement and additional regulation will lead to more opportunities for Certified Public Accountants. If you are interested in enrolling in an accounting degree, here are some points to consider if the career is really made for you.
- Your personal finances should always be in order.
- You place importance on excellent personal standards.
- It is easy for you to communicate ideas logically to other people.
- You are known as a detailed and organized person.
- Background in accounting subjects will be very helpful. If this is the case, you must have excelled in these subjects in the past.
- You are a definite or concrete thinker instead of being an abstract theorist.
- You make decisions based on reason and not assumptions.
- Interest in solving puzzles and mathematical problems is an advantage.
- You are capable of organizing data in a chronological manner.
- Potential accountants are keen on making forecasts.
- You follow rules to the letter instead of breaking them.
Know the Qualifications
In almost all states, students need at least 120 credits of post secondary education. These include 12 credits for business courses and another 12 credits for accounting courses. Candidates are required to pass a laborious four part test which is called the “Uniform CPA Examination”. It is arranged and administered by the American Institute of Public Accountants or AICPA.
Topics covered are Financial Accounting/Reporting; Auditing and Attestation; Business Environment and Concepts; and, Regulation.
Keep in mind that the Certified Public Accountant is a recognition bestowed by the United States State Board of Accountancy to professionals who have achieved prescribed levels of competency in the following disciplines:
- Accounting Proficiency
- Ethical Standards
- Experience and Training
- Commitment to the Accounting Profession and Industry
If you want to become a CPA, you need to accomplish the following:
- Fulfill academic requirements.
- Take the Uniform CPA Examinations.
- Pass the test on Ethics.
- Gain appropriate work experience.
- Satisfy CPE prerequisites.
These conditions are established by the Board of Accountancy in all 50 states and federal jurisdictions of the US. Each state board has come up with rules or policies that are different from one another. There is a so-called CPA Exam Requirements that you can consult for specifics.
The summary below can serve as your reference:
Minimum Degree – Majority of states and jurisdictions require no less than a four year Bachelor of Science degree. In the same manner, many but not all the states oblige 150 semester credit hours which is the same as a Master’s Degree as precondition for the exam.
Accounting/Business Subjects – All states mandate a program of accounting and business subjects. The “easiest” is said to be in New Hampshire where 12 semester courses of accounting classes are accepted. Nevertheless, there are some states that strictly require focus on accounting. Most states enforce classes in business laws, auditing and ethics. The minimum age for those who want to take the tests are from 18 to 21 years old. Only citizens of the US are allowed to sit for the CPA examinations.
The “Uniform CPA Examination” is computer-based. The test covers intermediate or advanced accounting and applicable fields which consist of business, law, and taxation. There are four parts which you can take one at a time and in any order.
- Auditing and Attestation– 4 hours
- Business Environment and Concepts– 3 hours
- Financial Accounting and Reporting – 4 hours
- Regulation- 3 hours
This is described as one of the hardest professional examinations in the country with the passing rate at only 50 percent each year. A lot of CPA candidates settle for study guides as well as courses to increase their chances of success.
Once you have passed the CPA examination, nearly all state boards will ask you to take the Ethics exam. It is a self-study and open book examination which is less difficult compared to the Standardized CPA testing.
According to the AICPA, “this revised course teaches you and your staff the AICPA, SEC and GAO independence rules in an inventive and creative way. You will learn the most up-to-date AICPA, SEC and GAO rules, including those adopted under the Sarbanes-Oxley Act. This course also explains the revised AICPA Code of Professional Conduct and conceptual framework, which all members of the AICPA must follow. It covers the basic tenets of ethical and professional conduct, covering the principles of ethics, and it explains why the code is necessary and how it is organized.” (Source: CPA.com)
Relevant Working Experience
Many states will demand that the accountant obtain one to two years of work experience to secure a CPA license. This will not pose a problem since it is not difficult to get an accounting job if you pass the CPA licensing exam.
CPAs are also required to take certain Continuing Professional Education or CPE hours to maintain their licenses. Each state has different policies and guidelines.
“CPAs are required to take continuing education courses in order to renew their license. Requirements vary by state (Wisconsin does not require any CPE for CPAs 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. AICPA guidelines grant licensees one hour of CPE credit for every 50 minutes of instruction.” (Source: Wikipedia.org)
What is practice mobility? It is the capacity of the top-caliber CPA from one state to practice in another state without the need for acquiring a license in that state. This is a concern especially in this modern era when accountants may have to deal with clients interstate and even globally. The practice frequently needs to cross state lines or international borders.
Requirements differ for CPA licensing. There is the matter of reciprocal or mutual relationship, provisional practice and other facets of state accountancy laws. Different legislation in 55 licensing jurisdictions (50 states, the District of Columbia, US Virgin Islands, Guam, Commonwealth of the Northern Mariana Islands, and Puerto Rico) make interstate systems and mobility of accountants more intricate.
“The American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA) have analyzed the current system for gaining practice privileges across state lines and have endorsed a uniform mobility system. This model approach is detailed through the substantial equivalency provision (Section 23) of the Uniform Accountancy Act (UAA). The UAA is an “evergreen” model licensing law co-developed, maintained, reviewed and updated by the AICPA and NASBA. The model provides a uniform approach to regulation of the accounting profession.
Under Section 23 of the UAA, a CPA with a license in good standing from a jurisdiction with CPA licensing requirements essentially equivalent to those outlined in the UAA is deemed to be “substantially equivalent,” or a licensee who individually meets the requirements of:
- Obtaining 150 credit hours with a Baccalaureate Degree
- Minimum 1 year of CPA experience
- Passing the Uniform CPA Examination”
Homogeneous implementation of the UAA’s significant equivalency stipulation develops a system analogous to the country’s drivers’ licensing by providing CPAs with mobility. At the same time, licensed accountants retain and reinforce the capability of state boards to protect public interest. This approach allows consumers to get prompt services from accountants best capable for the job, irrespective of location, and devoid of impediments of unwarranted documentation and increased costs that do not safeguard public interests.
The road to finishing accountancy is not easy. You need to deal with numerous requirements and obstacles along the way. Yet, the rewards are lucrative. It only entails perseverance and dedication to your calling.