Certified Public Accountant (CPA) In India – How to become, Course, Exams, Fees, Institutes, TIPS and others.
(Read our Post on How to Become CFA In INDIA)
CPA is an individual with thorough and complete knowledge of accounting principles of the U.S. So, if you want to work in or for U.S. firms, understanding its accounting laws is essential.
Certified Public Accountants (CPAs) are qualified accountants in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification as a CPA.
In most US states, only CPAs who are licensed are able to provide to the public, attestation (including auditing) opinions on financial statements.
According to Wikipedia, the exceptions to this rule are Arizona, Kansas, North Carolina and Wyoming, where although the “CPA” designation is restricted, the practice of auditing is not.
In the present times of fast-paced globalisation, the qualification of a CPA will prove to be a valuable additional asset for the Chartered Accountants across the globe.
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How to become a CPA (You may Read – How to Pass the CPA Exam
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(1) Although the American Institute of Certified Public Accountants (AICPA) conducts uniform examination nationally, each State has got its own requirements to sit for the exam.
(2) AICPA is a parent body, however only an individual State can decide the pre-requisites to sit for the exam in that respective State.
(3) It is our responsibility to choose the State depending upon one’s qualification and experience.
(4) Once we choose the State, eventually all the States will ask our qualification and experience to be evaluated by the designated body (approved by AICPA/NASBA).
(5) But, as of now, only Colorado State recognises Indian Chartered Accountants and so does not require evaluation before admission to sit for the exam.
(6) However, after passing the exam, Colorado State does not award ‘CPA’ as at that stage it asks us for evaluation of the qualification and experience.
(7) Now the CPA exam is conducted online (through prometric centres), but only within USA. There are four subjects only and one can choose to sit individually or together. The pass percentage is 75.
(8) Exam questions mostly comprise Multiple Choice questions (say 60-70%), other objective formats (say 10-20%) and descriptive-simulation models (balance 20%).
(9) On an average, generally all the States require a minimum of 150 credit hours to be complied PLUS completion of the Ethics test (which can be written from home—passing grade is 90%), before a CPA is awarded.
(10) Then you will be given “Active” status of CPA, based on which you can practise in that State. You can sit for the exam in one State and after passing, shift to another State by providing valid reasons. The “Active” status will be passed on to the other State, provided ethical test requirements of the other State are complied with.
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(11) As for Colorado State is concerned, both CPA pass certificate and Certificate of License to practice are same. But, other states like Delaware, the CPA pass certificate is different from Certificate of License to practise.
(12) To maintain the “Active” Status of CPA certificate, certain credit hours are to be maintained annually. For example, in Colorado State, it is 80 credit hours for two years with a minimum of 2 credit hours each year towards the subject of ethics.
(13) The relevant details can be availed from the websites www.nasba.org andwww.cpa2biz.com
Some FAQ’s
What are the general requirements for becoming a CPA?
All candidates for certification must meet specific educational requirements and pass the Uniform CPA Exam. In addition, experience in the practice of public accounting may be required, depending on your educational background.
What is the education requirement for becoming a CPA?
Candidates pursuing CPA certification in Massachusetts are required to have 150 credit hours of college level education. The 150-hour requirement is a result of the growing demand for CPAs to provide clients with a wide range of professional services. CPAs are required to make increasingly complex and technical judgments, creating the need for professionals with diverse skills and a broad educational background. The additional education requirement is designed to meet this need.
Does this mean that I will need a graduate degree to become a CPA?
NO, the only degree required for certification is a bachelor’s degree. However, the skills and knowledge usually developed in a graduate program (e.g., Masters of Accounting, Masters in Tax, MBA, law degree) may be very useful in helping CPAs to meet client demands. For this reason, the Massachusetts Society of CPAs strongly encourages a graduate education.
Does my college-level education need to include specific coursework?
It depends; the requirements vary based on the highest degree you obtain. All coursework must be completed at a nationally or regionally accredited college or university and Associate Degree/Community College courses will be accepted only if transferred into a four-year bachelor’s degree program. Elementary or introductory accounting courses qualify to fulfill your accounting course requirements.
1. If you obtain a graduate degree in accounting from an AACSB accredited accounting program, or one that has been approved by the Massachusetts Board of Public Accountancy as substantially equivalent to an AACSB program, you will not need to meet specific course requirements.
2. If you earn a graduate degree in accounting from a school that does not fall within the above category, or if you earn a graduate degree in business administration or law, you will need 18 semester hours (27 quarter hours) of accounting at the graduate level or 30 semester hours (45quarter hours) at the undergraduate level, or an equivalent combination thereof. These courses must include coverage in financial accounting, audit, taxation, and management accounting. In addition, the degree must include or be supplemented by 24 semester hours (36 quarter hours) of business courses (other than accounting courses) at the undergraduate level or 18 semester hours at the graduate level, or an equivalent combination thereof.
3. If your highest degree is a bachelor’s degree in business, your degree must include, or be supplemented by, 30 semester hours in accounting with coverage in financial accounting, audit, taxation, and management accounting. In addition, the degree must include, or be supplemented by, 24 semester hours in business courses other than accounting courses. These business courses shall include coverage in business law, information systems, finance, and coverage in at least one of the areas of economics, business organizations, professional ethics, and/or business communication.
4. If your degree is not in business, your 30 semester hours in accounting must include at least three semester hours in each of the subject areas of financial accounting, audit, taxation, and management accounting; and your 24 semester hours in business must include at least three semester hours in each of the areas of business law, business information systems, professional ethics and finance. Business courses, other than accounting, in business management of organizations, economics, and/or business communications may be included for the business course requirements.
Can I sit for the CPA exam before I meet the 150- hour requirement?
YES. After January 1, 2007, candidates may qualify to sit for the exam when they have completed 120 of the required 150 semester hours (or 180 of the 225 quarter hours) of college education at a nationally or regionally accredited institution where the successful completion of 120 semester hours (180 quarter hours) results in obtaining a bachelor’s degree.
What educational requirements must I meet if I choose to sit for the exam with 120 credits?
You must have completed 21 semester hours of accounting courses that include coverage in financial accounting, audit, taxation, and management accounting and 9 semester hours of business courses, including coverage in the areas of business law, finance, and information systems.
Can I sit for the exam during my final semester before graduation?
NO, you must have completed all of the requirements for your bachelor’s degree. You may, however, apply for the exam during your final semester. For planning purposes, please note that the application review process for a first-time exam candidate will take 6-8 weeks and that testing is only available in the first two months of each calendar quarter. Once your exam application is approved you will receive a Notice to Schedule (NTS) that gives you six months to schedule and complete all exam sections for which you applied. If you have not taken all exam sections and your NTS expires, your fees will be forfeited.
Can I sit for the exam before I receive my official college transcript certifying the completion of my bachelor’s degree and required accounting and business courses?
YES. Beginning January 1, 2007, you will be able to sit for the exam before you actually receive your official transcript as long as you are able to provide the certified transcript within 90 days of your exam date. Failure to provide a transcript(s) that certifies the award of the bachelor’s degree and completion of all required accounting and business courses will result in the loss of any exam credit in the exam window completed. Also, you will not be allowed to sit as a Massachusetts exam candidate in future CPA exams until such official transcript is received by the testing administrator.
Is there a time limit to meet the 150-hour requirement if I sit for the exam with 120 credits?
YES. You have 3 years from the time you receive notice of passing all four parts of the exam to meet the educational requirements. If you don’t, you will need to retake all parts of the exam.
Where do I find out more information about becoming a CPA?
If you have specific questions about any licensing requirements, you should visit the Board of Public Accountancy Web site or contact the Board at:
Massachusetts Board of Public Accountancy
239 Causeway Street, Suite 500
Boston, MA 02114
617.727.1806
What is the experience requirement for CPA certification?
It depends on your level of education. With 150 credits, you need one year of public accounting experience. With a graduate degree in accounting, business, or law, no experience is required for certification.
Does my experience have to include 1000 hours in the attest function?
NO, however, the privileges of your license will be restricted to all accounting services except issuing reports on financial statements.
How can I receive full license privileges to allow me to sign off on financial statements?
You will qualify for full license privileges after you complete twelve months of uninterrupted employment in a public accounting firm and 1000 hours in the report function on full disclosure financial statements, of which not more than 300 hours may consist of full disclosure compilations.
Once I’m certified, do I have to do anything to maintain my license?
YES. Upon your initial certification, you are issued a biennial license that will require you to complete 80 hours of acceptable continuing education of which 4 credits are in the area of professional ethics. In addition, every CPA is required to adhere to a code of professional conduct that helps to maintain integrity and dignity in the profession. Finally, CPAs who sign off on financial statements (or their firms) are required to undergo a peer review every three years.
What if I move to another state? Will my license transfer with me?
Reciprocity, or the recognition of your Massachusetts license in another state, is ultimately the decision of the licensing board in your new state. However, since almost all states have adopted the 150-hour education requirement, it is likely that if you meet the certification requirements for Massachusetts you will be able to obtain a license in another state.
5 Reasons to become A CPA
#1. CPAs = Most Elite Accountants
CPA, or certified accountants, are finance professionals who have achieved expertise beyond a “normal” accountant through advanced education, training and experience. Accountants who aspire to become partners in the accounting firm or move up the corporate ladder work hard to get the CPA qualification.
#2. CPAs Are Needed Everywhere. Corporations, non-profit organizations and governments in every industry around the world specifically look for CPAs to fill in their senior finance positions. Therefore, it is not surprisingly that junior accountants with CPA are preferred when it comes to recruitment and promotion.
#3. CPAs Are Indispensable. In the post-financial crisis era, corporate accountability has become the #1 concern for companies and their shareholders. The senior management is relying on the CPAs for the financial health and integrity of the corporations.
#4. CPAs Are In Demand. Because of the 2002 Sarbanes-Oxley act, the workload on the accounting department of every corporation has vastly increased, leading to a shortage of accounting experts in a global scale. At the same time, 75% of the current CPAs will retire in 15 years, based on a study by the AICPA. This creates a golden opportunity for you to plunge into this important industry
#5. CPAs Are Paid Better. Another study by global recruiting agency Robert Half points out that CPA on average earns 10% better than non-CPA. Also, CPAs with 5+ years experience are paid $80-110K in public accounting firms.
CPA Certificate vs License: Is there a Difference?
First of all, each state has its own laws and rules governing the CPA profession. Each state also has its own Board of Accountancy that monitors the CPAs that it licenses.
For most states, the term “CPA certificate” and “CPA license” is inter-changeable. However, for the “two-tier states” there could be a distinction between the two:
CPA Certificate
- Work experience is often not required
- No CPA CPE (continuous professional education) hours required
- Scope of work is limited as certificate holder cannot own a CPA firm (either as sole owner or partner) or sign an audit report
- Cannot hold yourself out as a CPA within the jurisdiction, i.e. cannot call yourself a CPA in the state where you get the CPA certificate.
CPA License
- Normally require 1-2 years of working experience, supervised and/or verified by a CPA licensee.
- CPE hours required every reporting years (typically 120 hours every 3 years)
- Can use CPA title in business cards and own CPA firm/sign audit report.
Because certificate is easier to get, most candidates consider certificate as the “first level” while license, or permit to practice, is the “second level”.
However, many international students aim for certificates only in their CPA application because the CPA qualification is used mainly for the enhancement of their credentials.
In any case, it’s a good idea to check with your state regarding the specific requirement for a CPA certificate and/or license before you apply for the CPA Exam.
The services of U.S. CPA are required in all areas of the business world:
- Assurance and Attest Services
- Financial Accounting
- Management Consulting and Performance Management
- Information Technology (especially as applied to accounting and auditing)
- Corporate Finance (Merger & Acquisition, initial public offerings, share and debt issuing)
- Financial Planning
- Financial Analysis
- Venture Capital
- Forensic Accounting (preventing, detecting, and investigating financial frauds)
- Tax Preparation and Planning
- Estate Planning
- Corporate Governance
Institutes for CPA in India
- Concorde Gleim
- Milescpareview
- Cpachamps
- Piron Education
( If you are a Institute, Please let us know so that we can add you here)
The Uniform CPA Examination
Exam Fees is Close to $1,000. The CPA examination measure professional competence in business law, taxation, accounting, auditing and related business topics.
The 4 exam sections of the CPA Exam are:
1) Business Environment & Concepts (BEC), 3.0 hours
2) Regulation(REG), 3.0 hours
3) Financial Accounting & Reporting(FAR), 4.0 hours
4) Auditing & Attestation(AUD), 4.0 hours
Note : Passing Score of 75 is required in the scale of 0 – 99 to pass each section of the exam. Passing score is not a percentage score. Average Passing Rate as per AICPA : just below 50%
Syllabus – Details
Business Environment and Concepts (BEC)
CBT-e structure from January 1,2011
Business Environment and Concepts (BEC) , 3.0 hours, 85% multiple-choice exam and 15% written communication tasks, 3 Multiple-Choice Question (MCQ) testlets containing a total of 72 questions . This format will be tested from January 1,2011
Exam Contents:
I. Corporate Governance (16% – 20%)
II. Economic Concepts and Analysis (16% – 20%)
III. Financial Management (19% – 23%)
IV. Information Systems and Communications (15% – 19%)
V. Strategic Planning (10% – 14%)
VI. Operations Management (12% – 16%)
References – Business Environment and Concepts
• The Committee of Sponsoring Organizations of the Treadway Commission (COSO):
o Internal Control – Integrated Framework
o Enterprise Risk Management
• Sarbanes-Oxley Act of 2002:
o Title III, Corporate Responsibility
o Title IV, Enhanced Financial Disclosures
o Title VIII, Corporate and Criminal Fraud Accountability
• Current Business Periodicals
• Current Textbooks on:
o Accounting Information Systems
o Budgeting and Measurement
o Corporate Governance
o Economics
o Enterprise Risk Management
o Finance
o Management
o Management Information Systems
o Managerial Accounting
o Production Operations
o Project Management
(Source : CONTENT AND SKILL SPECIFICATIONS FOR THE UNIFORM CPA EXAMINATION of AICPA)
Regulation (REG)
CBT-e structure from January 1,2011
Regulation (REG) , 3.0 hours, 60% multiple-choice exam and 40% Task-Based Simulations (TBS), 3 Multiple-Choice Question (MCQ) testlets containing a total of 72 questions, 1 testlet containing 6 task-based simulations . This format will be tested from January 1,2011
Exam Contents:
I. Ethics, Professional, and Legal Responsibilities (15% -19%)
II. Business Law (17% – 21%)
III. Federal Tax Process, Procedures, Accounting, and Planning (11% – 15%)
IV. Federal Taxation of Property Transactions (12% – 16%)
V. Federal Taxation of Individuals (13% – 19%)
VI. Federal Taxation of Entities (18% – 24%)
References – Regulation Ethics, Professional and Legal Responsibilities, and Business Law
• AICPA Code of Professional Conduct
• AICPA Statements on Standards for Tax Services
• Revised Model Business Corporation Act
• Revised Uniform Limited Partnership Act
• Revised Uniform Partnership Act
• Securities Act of 1933
• Securities Exchange Act of 1934
• Sarbanes-Oxley Act of 2002
• Uniform Commercial Code
• Current textbooks covering business law, auditing, accounting, and ethics
Federal Taxation
• Internal Revenue Code of 1986, as amended, and Regulations
• Treasury Department Circular 230
• Other administrative pronouncements
• Case law
• AICPA Model Tax Curriculum
• Current Federal tax textbooks
(Source : CONTENT AND SKILL SPECIFICATIONS FOR THE UNIFORM CPA EXAMINATION of AICPA)
Financial Accounting and Reporting (FAR)
CBT-e structure from January 1, 2011
Financial Accounting and Reporting (FAR), 4.0 hours, 60% multiple-choice exam and 40% Task-Based Simulations (TBS), 3 Multiple-Choice Question (MCQ) testlets containing a total of 90 questions, 1 testlet containing 7 task-based simulations . This format will be tested from January 1, 2011
Exam Contents
References – Financial Accounting and Reporting
• Financial Accounting Standards Board (FASB) Accounting Standards Codification
• Governmental Accounting Standards Board (GASB) Codification of Governmental Accounting and Financial Reporting Standards
• Standards Issued by the U. S. Securities and Exchange Commission (SEC):
o Regulation S-X of the Code of Federal Regulations (17 CFR Part 210)
o Financial Reporting Releases (FRR)/Accounting Series Releases (ASR)
o Interpretive Releases (IR)
o SEC Staff Guidance in Staff Accounting Bulletins (SAB)
o SEC Staff Guidance in EITF Topic D and SEC Staff Observer Comments
• International Accounting Standards Board (IASB) International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), and Interpretations
• AICPA Auditing and Accounting Guides
• Current textbooks on accounting for business enterprises, not-for-profit organizations, and governmental entities
(Source : CONTENT AND SKILL SPECIFICATIONS FOR THE UNIFORM CPA EXAMINATION OF AICPA)
Auditing and Attestation
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CBT-e structure from January 1, 2011
Auditing and Attestation (AUD), 4.0 hours, 60% multiple-choice exam and 40% Task-Based Simulations (TBS), 3 Multiple-Choice Question (MCQ) testlets containing a total of 90 questions, 1 testlet containing 7 task-based simulations . This format will be tested from January 1, 2011
Exam Contents:
References – Auditing and Attestation
• AICPA Statements on Auditing Standards and Interpretations
• AICPA Codification of Statements on Auditing Standards, AU Appendix B, Analysis of International Standards on Auditing
• Public Company Accounting Oversight Board (PCAOB) Standards (SEC-Approved) and Related Rules, PCAOB Staff Questions and Answers, and PCAOB Staff Audit Practice Alerts
• U.S. Government Accountability Office Government Auditing Standards
• Single Audit Act, as amended
• Office of Management and Budget (OMB) Circular A-133
• AICPA Statements on Quality Control Standards
• AICPA Statements on Standards for Accounting and Review Services and Interpretations
• AICPA Statements on Standards for Attestation Engagements and Interpretations
• AICPA Audit and Accounting Guides
• AICPA Auditing Practice Releases
• AICPA Code of Professional Conduct
• IFAC Code of Ethics for Professional Accountants
• Sarbanes-Oxley Act of 2002
• Department of Labor Guidelines and Interpretive Bulletins re: Auditor Independence
• SEC Independence Rules
• Employee Retirement Income Security Act of 1974
• The Committee of Sponsoring Organizations of the Treadway Commission (COSO): Internal Control – Integrated Framework
• Current textbooks on auditing, attestation services, ethics, and independence
(Source : CONTENT AND SKILL SPECIFICATIONS FOR THE UNIFORM CPA EXAMINATION OF AICPA)
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