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How to Become a CPA
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May 3, 2024
In this episode, we're going to talk about the three main steps or the three E's that you should know before becoming a CPA. IMPORTANT LINKS: Master your study process by attending one of our free study training workshops: https://www.superfastcpa.com/study-secrets/ Enter our free monthly podcast giveaway: https://www.superfastcpa.com/enter FULL EPISODE PAGE: https://www.superfastcpa.com/how-to-become-a-cpa/ 00:00 Introduction 00:21 3 Main Steps to Become a CPA 01:29 Education 02:43 The Uniform CPA Exam or the "CPA Exams" 04:07 Important Organizations in Accounting 06:52 Experience 07:54 Key Questions 08:02 How Long Does It Take to Become a CPA? 08:29 How Much Does It Cost to Become a CPA?
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So you're thinking about becoming a CPA or you're at least checking out the
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requirements or what it takes to become a CPA. There are three main steps to becoming a CPA or the three E's and they are
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education, the exams, meaning the uniform CPA examination, the four CPA exams, and then the experience
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Now we will go further into the details of those three main steps, but first the CPA exams are the one thing that you have control over how long
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they take you. With the education requirements, a bachelor's degree or hitting the 150 hours that just takes as long as it
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takes. You have to get 150 hours. With the experience requirements, meaning you typically need one to two years of experience working in accounting
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under a CPA, that also just takes as long as it takes
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Depending on your state, it's either one to two years. However, the CPA exams
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those can take you as little as six months if you really get your study process
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dialed in and you're dedicated and you study every day. Or for some people
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they turn into a multi-year nightmare. Now if you're pretty sure that you are headed down the path of becoming a CPA
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then make sure to subscribe to our YouTube channel and our podcast because we
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focus on what I just mentioned, the strategy side of how to study effectively and efficiently so that the CPA
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exams don't take you multiple years. All right, so let's go deeper into the three big requirements
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So for the education requirement, this is the same across the board
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You need 150 hours credit hours. Now where it varies state to state is the specific number of accounting credits
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and how those are divvied up between different accounting subjects or business
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credits, things like managerial accounting or cost accounting, or financial reporting classes or auditing classes
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So depending on the state, those requirements are a little bit different
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but across the board, you need a bachelor's degree, which is going to be 120 hours and then you need 30 more hours
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So most people end up doing a master's degree in accounting because a master's
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degree in accounting is right around the 30 to 36 credit hours and it just
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completes that requirement for you. And if you're going to do 30 credit hours of graduate degree classes
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you might as well turn that into a master's degree. But some people just do the required amount above and beyond their master's and
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then get the CPA by doing the CPA exams and meeting the experience requirements
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And then again, some states do just require a master's degree. And typically that can either be a MBA or a master's in accounting
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So going on to the second E or the second big requirement, that is the uniform CPA examination. So the CPA exams
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when you hear people say that CPA exams, that is what they're referring to the uniform CPA examination
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But people say CPA exams because there are four sections. There are four separate exams that comprise the uniform CPA examination
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So a few things to know about the CPA exams. The CPA exams is typically the most difficult part of this process for people
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because you go through college. Typically most people that do a master's in accounting or that are planning on
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becoming a CPA, they will start out working in public accounting. So you start in this very high demand job and in your spare time
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whatever that is, you're trying to pass these exams that for the most part are much more difficult
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than any individual class that you had in college. So you get your review course and that's a literal library of information
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covering the topics on the four different exams. And it's just basically a self-study thing. So it requires discipline
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You have to be strategic about how you get through all the material on specific
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timelines so that you do it within a reasonable amount of time without forgetting
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everything that you've studied. So the CPA exams are the most difficult part of this process
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So a few organizations to be familiar with, obviously you've heard of the AICPA or the American Institute of Certified
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Public Accountants. The AICPA, they create and score the CPA exams. Then there's also NASBA or the National Association of State Boards of Accountancy
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So NASBA assists all the different state boards with credential evaluation. So all those education requirements and what credits you took
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you submit that to NASBA and they evaluate those credentials. They also assist with application processing
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So when you submit your application to sit for the CPA exams, you submit that to NASBA. And then NASBA also reports CPA exam scores
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So for example, in most states, after you take a CPA exam section
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you will be logging into a candidate portal on NASBA's website to actually check
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your score and get your score report. And then there's Prometric. They proctored the exam
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So when you actually go to take a CPA exam section, you show up to a Prometric testing center and they check you in
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fingerprint you, you take the exam at Prometric. So then there's the four CPA exams themselves. So you have Audit, BEC
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FAR, and REG. So Audit covers auditing. BEC stands for business environment and concepts
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FAR stands for financial accounting and reporting. And REG stands for regulation
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REG covers the tax code and business law. A passing score in the CPA exams is 75 and above. As I mentioned before
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it is not easy to get just a 75. In fact, the pass rates are right around 50% for all four sections
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or the fail rates, however you want to look at it. The exams themselves
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when you're sitting there taking the exams, they consist of multiple choice questions, task-based simulations
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which are meant to simulate actual work duties that you would be doing as
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a newly licensed CPA. And then there is a written communications portion on the BEC exam
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In most States, you can typically sit for the exams once you have 120 credit hours
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but you have to add that 30 other hours to get to 150 to actually be
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licensed. But again, the CPA exams are very rigorous. And so most people don't really mess with them while they're still in school
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trying to finish those last 30 hours. However, it does happen. Some people do it. We have a few people that we've interviewed on our podcast
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For example, Zach, he passed all four CPA exams while he was still in his master's degree
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And then after you've passed the four CPA exams, in most States, there will be one or two ethics exams or some form of an ethics exam that you
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need to take. So going on to the third big step, that's the experience portion. So you need to work under a CPA
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which broadly just means, you know, working at a CPA firm, you get that experience. And so in most States, that's one year
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some States it's somewhere between one and two years, but again, you don't need to have passed the CPA exams for that one year experience to
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start. Let's say you get out of school, you get recruited, you start working at a public accounting firm. And you know
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at the six month mark, you finish the four CPA exams. Then you would just have six more months of working
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gaining the experience to be eligible, to actually get your CPA license
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So one year of experience. And then after you actually get your CPA license
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there will be CPE requirements and it's typically 40 credit hours per year
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So these are just continuing education classes that you can either take in
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person or online. And depending on the state, you might report those every other year or every year
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but typically it's around 40 hours of CPE credits each year. So a few key questions related to how to become a CPA would be how long does it
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take to become a CPA? Well, if you take four years for your bachelor's
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one year for your master's or your 30 graduate level credits, and then let's say a year for the CPA exams and then a year of experience
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but that year of experience can be, you know, happening as you're getting your CPA exams done
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So four years for the bachelor, one year for your master's, one year for the experience slash CPA exams that puts you at six years
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Another question would be how much does it cost to become a CPA
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Let's start with the master's degree. So a master's degree, again, my master's degree in accounting will typically be a 30 to 60 credit hour
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program. So that will be somewhere between 30 to $60,000. Then once you're ready to formally study for the CPA exams
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you'll get a review course. A lot of times your firm will pay for this or reimburse you once you pass the
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four exams. But a CPA review course is going to be an investment of somewhere between
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$1,500 to $3,000. And then the exam fees will be somewhere between one to $2,000
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So that puts the total cost of getting your CPA license somewhere between 30 to
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$60,000, not considering your bachelor's education. Another very common question is, is it hard to become a CPA? Again
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the CPA exams are definitely the hardest part of this process. For some people, it turns into a multi-year nightmare. For some people
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they go through that multi-year nightmare and they never actually pass all four
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So they don't actually become a CPA. But then again, on the other side, if you learn how to study strategically and you're constantly improving your
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study process and you're dedicated, you don't miss days of studying and you really just nail the process. You know
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you can pass the CPA exams, studying two to three hours a day in five to six months in some
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cases. And then another common question is, do CPAs make good money
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The best thing to compare it to would be, let's say, an accounting professional that goes through their whole career and never gets
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their CPA versus that same person in a parallel universe that did get their CPA. The CPA
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there are studies out there that it is somewhere between a million extra
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dollars to a million and a half extra dollars that you will get paid for doing
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the same jobs as you go through your career in accounting. So it is an investment with a very high ROI
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If you are going to go into accounting, it's well worth the one to two years of hassle and, you know
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the thousands of dollars to make the investment, to get your CPA
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If you're going to be working in accounting anyways, because you will get paid more every day for the rest of your working career
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than you would otherwise, without having your CPA to the tune of one to 1.5 million
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extra dollars over what you would make by not having your CPA
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So that's a brief rundown of what it takes to become a CPA. I hope you found that helpful. Again
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our YouTube channel and our podcast where we interview successful CPA candidates
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it is full of the strategy side of how to study effectively
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how to get the most out of your review course, how to get really good results from your review course without having to sit in
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front of your review course all day so that the CPA exams don't become a
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complete nightmare. So check out some of our other videos or subscribe to our channel so that you
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get notified when we release other videos about the strategy side of studying
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for the CPA exams
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