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What It Takes–A Guide to Becoming a CPA

One day you’re sitting in history class learning about the wives of Henry VIII when suddenly you see a flash—the curtains fly open, light pours through the window, a voice booms from above—and deep in your heart you realize your calling: You were meant to be a CPA! 

OK, perhaps the realization that you’d like to explore a CPA career won’t hit you like a bolt of lightning, but the timing has never been better. Most accounting majors have job offers cemented before they graduate—and starting pay is usually more than $45,000. What’s more, insiders predict this trend to continue for years to come.If you’re wondering what it takes to be a CPA, here’s a road map of the requirements that can lead you from inspiration to a compelling career. 
What Is a CPA?
A CPA is a certified public accountant and is licensed by the state. In California, to earn the prestige associated with the CPA license, individuals are required to demonstrate their knowledge and competence by passing the Uniform CPA Exam, meeting high educational standards and completing a specified amount of general accounting experience. 

The two most important goals to focus on in your quest to become a CPA are passing the Uniform CPA Exam and meeting licensing requirements—which have recently seen some big changes that take effect Jan. 1, 2014.

California law gives CPA candidates two options for entering the profession. The California Board of Accountancy has outlined the following pathways for earning a CPA license: 

Pathway 1 (Expires Dec. 31, 2013.)
Designed for individuals who will practice only in California and requires:
  • A bachelor’s degree;
  • 24 semester units in accounting-related subjects;
  • 24 semester units in business-related subjects (accounting courses beyond the 24 required units may apply toward the business units);
  • Passing the Uniform CPA Exam;
  • Two years of general accounting experience supervised by a CPA with an active license; and
  • Passing an ethics course. 

Pathway 2 (After Jan. 1, 2014, this will be the ONLY pathway to licensure in California.)
If you are licensed under this pathway, the majority of other states will recognize your license. If you think that someday you might want to practice in another state, Pathway 2 may provide you the professional mobility you desire. Requirements:
  • A bachelor’s degree;
  • 24 semester units in accounting-related subjects;
  • 24 semester units in business-related subjects;
  • 150 semester units (or 225 quarter units) of education;
  • Passing the Uniform CPA Exam; • One year of general accounting experience supervised by a CPA with an active license; and
  • Passing an ethics course. 

Once you pass the exam and apply for your CPA license, you’ll need to select one of the pathways.

Auditing
When the public thinks of CPAs, they often think of auditing—the process of examining, testing and verifying a company’s financial records. Traditionally, logging audit hours has been how aspiring CPAs “pay their dues.”

Well, times have changed, and the number of CPAs in California who perform audits and other attest-type services is dwindling. So now, neither pathway requires audit experience to obtain a CPA license.

But publicly held companies in the United States still need to be audited each year to remain in business. So at some point you may want to log the 500 hours of attest or auditing experience to obtain the authority to sign attest reports. It can add to your marketability as a professional.

Increased Opportunity Since audit hours aren’t required, you can acquire the experience you need for licensing from any CPA in California with an active license. This means you can train under the CPA who is the information technology director at Warner Bros. or a CPA who works for herself in Lodi just as easily as you can under a partner at one of the large international accounting firms. 

Your predecessors may have had to work only with firms that performed audits, but your employment possibilities are wide open.

2014: The Year of Change
Now that you’ve digested all the above—get ready for something new. With the passage of SB 819 in 2009, new licensing requirements go into effect Jan. 1, 2014, that mandate that all CPA candidates will have to meet the Uniform Accountancy Act’s 150-hour educational requirement prior to licensure, which includes a total of 150 semester hours, as well as a bachelor’s degree and one year of work experience (currently referred to as Pathway 2). 

SB 819 also:
  • Sunsets Pathway 1 (licensure with 120 units and two years of experience) effective Jan. 1, 2014.
  • Makes California a substantially equivalent state for purposes of mobility, allowing current California CPAs to provide services in most other states without first notifying the affected state board of accountancy and without paying a fee to the state. Note that California CPAs would be subject to discipline by the other state and required to follow that state’s laws. Many states only require that the out-of-state CPAs register with the other state board of accountancy when the CPA is providing audit services to an entity headquartered in that other state. A few states also have other rules, so check the state’s law prior to providing services.
  • Grandfathers in CPAs licensed prior to 2014 as substantially equivalent. 

Destination Success
This is just a glimpse of the road ahead. It’s an exciting one that requires careful planning. But your hard work will be rewarded. 

By earning a CPA license, you are telling the world that you received a broad-based education, planned well and studied hard to pass all parts of a very difficult exam. A CPA license shows that you have the knowledge, skills and abilities to be a trusted business adviser to your clients or employer, and that you are an ethical individual who can offer an independent viewpoint. 

In short, it means you have become a well-respected professional widely known as “the most trusted adviser.”

(rev. March 29, 2011)