If you’re considering a career in accounting or finance, you might have heard of a CPA, Certified Public Accountant. But what does a CPA do, and is it worth becoming one? Learn what it means to be a CPA, the benefits and challenges of getting this certification, and help you decide if it’s the right choice.
What is a CPA?
A Certified Public Accountant (CPA) is a professional accountant who has completed specified academic and experience requirements and passed the challenging CPA exam. State boards of accountancy are responsible for issuing CPA licenses and must adhere to strict ethical and professional standards. They provide various accounting services, including auditing, tax preparation, financial planning, and consulting.
To become a CPA, you need to:
- Complete your bachelor’s degree in accounting or a similar field at an approved university.
- Meet your state’s education requirements, including extra accounting, auditing, and business law courses.
- Pass the challenging CPA Exam, which has four parts: auditing, business environments and concepts, financial accounting and reporting, and regulation.
- Obtain the necessary work experience, often one to two years, under the supervision of a registered CPA.
- Follow the profession’s strict code of ethics and meet ongoing education requirements.
Is CPA worth it?
Now that we understand what it takes to become a CPA, let’s explore the numerous benefits of being a CPA:
Increased Earning Potential
One of the most compelling benefits of being a CPA is the potential for higher earnings. The Bureau of Labor Statistics reported that the average annual compensation for accountants and auditors in the United States was $79,880 in 2023.
However, CPAs tend to earn significantly more than their non-certified counterparts. The CPA certificate is widely recognized and respected, making CPAs more appealing to employers and often leading to more excellent compensation.
Expanded Career Opportunities
One of the best benefits of having a CPA license is access to various career opportunities in multiple industries, including public accounting firms, corporations, government agencies, and nonprofit organizations.
CPAs can serve as auditors, tax specialists, financial analysts, controllers, and CFOs. You can even open your accounting practice. The versatility of the CPA certification allows for greater career flexibility and advancement opportunities.
Greater Job Security
Getting a CPA is worth it, as it can provide a significant advantage in the competitive job market. Many employers prefer to hire CPAs for high-level accounting and finance positions, as the certification demonstrates a commitment to professional development, ethical standards, and expertise in the field. Additionally, CPAs are often in high demand, especially during tax season and audit periods, providing greater job security.
Enhanced Credibility and Respect
Both the accounting profession and the general public highly respect and accept the CPA designation. One of the significant benefits of having a CPA license is that it signifies that you have met rigorous educational and professional standards, and it can significantly enhance your credibility and reputation. Clients and employers often trust CPAs highly due to their expertise and adherence to a strict code of ethics.
Opportunities for Entrepreneurship
If you have an entrepreneurial spirit, the CPA license can open doors to starting an accounting or consulting practice. As a licensed CPA, you can provide various services such as tax preparation, auditing, financial planning, and business advising. The CPA designation can help you gain clients and establish yourself as a reputable and skilled expert.
The Challenges of Becoming a CPA
While there are many benefits to being a CPA, it’s essential to understand the challenges involved in getting and keeping this certification:
Rigorous Exam Process
The CPA Exam is known for being tough, with pass rates usually between 40% and 60% for each section. Preparing for the exam takes time, effort, and dedication because you must master various accounting and business topics. Many people use CPA review courses or study materials to improve their chances of passing.
Ongoing Education Requirements
After you become a CPA, the learning continues. Most states require CPAs to complete certain continuing professional education (CPE) hours annually or every few years to keep their license. This continual education lets CPAs stay current on the sector’s newest innovations, regulations, and best practices.
Time and Financial Investment
Becoming a CPA is neither quick nor cheap. Besides the cost of your bachelor’s degree, you also need to consider the fees for the CPA Exam, review materials, and any extra coursework required by your state. Additionally, the time needed to study for the exam and gain the necessary work experience can be considerable.
Is it worth taking the CPA exam?
Now that we’ve looked at the benefits and challenges of becoming a CPA, you might wonder: is getting a CPA worth it? The answer depends on your goals and willingness to invest time, effort, and money.
If you’re passionate about a career in accounting, auditing, or finance and are ready to work hard, getting a CPA license can be a great investment in your future. The benefits of higher earnings, more career opportunities, job security, credibility, and the chance to start your own business can make it worthwhile.
However, if you’re unsure about committing to accounting or find the exam and ongoing education requirements daunting, it’s essential to carefully weigh the pros and cons before deciding.
Are you ready to reap the CPA benefits?
Becoming a Certified Public Accountant (CPA) is challenging but rewarding, offering many opportunities in accounting and finance. CPAs enjoy higher earning potential, job security, increased credibility, and the chance to start their own business. However, the process involves a challenging exam, ongoing education, and significant time and financial investment.
Pursuing a CPA license should depend on your personal and professional goals and willingness to put in the necessary effort and resources. The CPA journey can be enriching and fulfilling if you’re passionate about accounting and committed to continuous learning and professional development.