Your Ultimate Guide to CPA Certification Requirements in 2024

Meeting the CPA certification requirements involves achieving two things:

• First, an accredited bachelor's degree or higher, often supplemented by additional credits
• Second, successful completion of the rigorous CPA exam

What Is The CPA Exam?

The Uniform Certified Public Accountant Examination CPA Exam is a standardized test administered by the American Institute of Certified Public Accountants (AICPA).

It is a crucial step in the CPA license requirements, especially for those aspiring to become licensed Certified Public Accountants (CPAs).

The exam itself is a rigorous assessment that tests candidates on various accounting and business-related subjects, including:

• Auditing and Attestation
• Business environment and concepts
• Financial Accounting and Reporting
• Regulation

It is designed to ensure that individuals possess the necessary Certified Public Accountant requirements, knowledge and skills to perform competently as professional accountants.

The exam is divided into four sections, and each section focuses on specific areas of accounting and related topics.

These sections are:

1. Auditing and Attestation (AUD)
2. Business Environment and Concepts (BEC)
3. Financial Accounting and Reporting (FAR)
4. Regulation (REG)

Candidates must pass all four sections within a designated time frame to become eligible for a CPA license.

The CPA Exam is administered in a computer-based format at various Prometric test centers across the United States.

The multiple-choice questions assess the candidate's knowledge and comprehension, while the task-based simulations evaluate their ability to apply their knowledge to practical scenarios.

Written communication tasks, included in the BEC section, test the candidate's ability to communicate effectively in a professional setting.

This exam is known for its challenging nature, and candidates often spend significant time preparing for each section to increase their chances of meeting the CPA education requirements.

A Breakup of Each Section

Here is a brief overview of each section of the CPA Exam:

1. Auditing and Attestation (AUD)

The AUD section assesses a candidate's understanding of the auditing process and the professional standards associated with attest engagements.

CPA Certification requirements include knowledge of:

• Auditing procedures
• Ethical responsibilities
• The application of generally accepted auditing standards (GAAS)
• International standards on auditing (ISAs)

Topics covered may also include audit planning, internal controls, audit reports, and the evaluation of audit findings.

There are 72 multiple-choice questions, eight task-based simulations and a time limit of four hours.

2. Business Environment and Concepts (BEC)

The BEC CPA exam requirements focus on testing a candidate's knowledge of general business concepts and their understanding of the business environment.

It covers topics such as:

• Corporate Governance
• Economic Concepts
• Financial Management
• Information technology
• Operations Management

Additionally, this section may also include questions related to business structure, strategic planning, and risk assessment.

There are 62 multiple-choice questions, four task-based simulations, and three written communication tasks.

3. Financial Accounting and Reporting (FAR)

The FAR section evaluates a candidate's knowledge of financial accounting principles and reporting standards, with a focus on U.S. Generally Accepted Accounting Principles (GAAP).

Topics covered for the CPA test requirements include:

• Financial statement preparation
• Accounting transactions
• Revenue recognition
• Presentation of financial statements

Candidates are also tested on their understanding of accounting for various types of entities, including partnerships and corporations.

There are 66 multiple-choice questions and eight task-based simulations.

4. Regulation (REG)

The REG section tests a candidate's knowledge of federal taxation, business law, and ethical standards related to the practice of accounting.

It covers topics such as federal taxation of individuals, corporations, and other business entities, as well as ethics, professional and legal responsibilities and federal tax procedures.

CPA education requirements expect candidates to demonstrate an understanding of tax laws, tax planning, and ethical considerations related to taxation and business law.

It consists of 76 multiple-choice questions and eight task-based simulations.

Candidates are required to manage their time effectively during the exam to ensure they can complete all the questions within the allocated time frame.

Requirements for the CPA Certification

The CPA Certification requirements typically involve several key steps, including:

1. Education
2. Passing the CPA Exam
3. Meeting specific experience
4. Ethics requirements

While the specific requirements can vary slightly from state to state due to the jurisdictional authority of state boards of accountancy, the general steps are as follows:

1. Education

CPA education requirements include a bachelor's degree or higher from an accredited college or university is usually required.

The CPA degree requirements should include a certain number of accounting and business-related courses, which may vary by state.

Many states require a total of 150 semester hours of college credit to become licensed as a CPA, which often exceeds the typical 120 hours needed for a bachelor's degree.

This additional coursework is often referred to as the "fifth year" of education.

For example, CPA MD requirements state students must complete 120 semester hours or 180 undergraduate quarter hours or the equivalent.

30 semester hours or 45 quarter credit hours in Group I, which requires 27 semester or 41 quarter credit hours, must be in accounting and related subjects, and three semester credit hours or four and a half quarter credit hours must be in ethics.

2. CPA Exam

Passing the Uniform CPA Examination is a crucial step in the CPA license requirements.

Candidates must pass all four sections of the CPA Exam within a designated time frame.

The exam assesses candidates' knowledge and skills in various areas of accounting and related subjects.

3. Experience

Most states CPA work experience requirements involve candidates completing a certain number of hours of relevant work experience under the supervision of a licensed CPA.

This experience is typically gained through employment in public accounting, government, industry, or a related field.

The specific requirements for experience may vary by state.

4. Ethics Exam

Some state boards of accountancy CPA credit requirements insist candidates must pass an ethics examination, designed to ensure that CPAs understand and adhere to the ethical standards and regulations of the accounting profession.

After fulfilling the education, exam, and experience CPA requirements, candidates can apply for a CPA license through their state board of accountancy.

Once the application is approved, the candidate is granted a CPA license, allowing them to practice as a certified public accountant in that state.

It is important for individuals interested in pursuing a CPA certification to familiarize themselves with the specific requirements set by the state board of accountancy in the state in which they plan to practice.

These requirements may be subject to change, so it is advisable to regularly check with the relevant state board for any updates or modifications to the CPA certification process.

The Five Types of CPA Fees

The five types of fees associated with the CPA (Certified Public Accountant) testing phase include:

1. CPA Review Course Fee

The CPA Review Course Fee covers the cost of enrolling in a comprehensive review course designed to help candidates prepare for the CPA Exam.

These courses typically include study materials, practice exams, online resources, and instructional support to assist candidates in meeting their CPA credit requirements.

The cost of a CPA review course can range from approximately $1,000 to$3,000, depending on the provider, the level of support offered, and the duration of access to the course materials.

2. CPA Exam Application Fee

The CPA Exam Application Fee is required when candidates apply to take the CPA Exam through their respective state boards of accountancy.

The application fee varies depending on the state in which the candidate plans to take the exam and can range from $50 to $200.

This fee covers the administrative costs associated with processing the application and registering the candidate for the exam.

3. CPA Examination Fees

The CPA Examination Fees refer to the costs associated with taking each section of the CPA Exam.

These fees vary across states and are typically approximately $200 per exam section.

Since the CPA Certification requirements consist of four sections (AUD, BEC, FAR and REG), candidates are required to pay the examination fee for each section they intend to take.

These fees contribute to the overall expenses associated with the administration and scoring of the exam.

4. CPA Exam Registration Fee

The CPA Exam Registration Fee is a mandatory fee that candidates are required to pay when registering for the CPA Exam.

This fee, which costs approximately $300, covers the administrative expenses related to scheduling the exam, securing a testing location, and ensuring a smooth examination process for the candidates.

Payment of the registration fee is necessary to reserve a seat for the chosen exam date and location.

5. CPA Ethics Exam Fee

The CPA Ethics Exam Fee is part of the CPA license requirements for some states.

This fee typically ranges between $150 and$200 and covers the costs associated with the administration and scoring of the ethics exam.

Understanding these various fees is crucial for individuals planning to pursue the CPA designation, as it allows them to budget and plan for the costs associated with the entire CPA testing phase.

Frequently Asked Questions

Final Thoughts

Obtaining a CPA license is undoubtedly a challenging yet rewarding journey that requires dedication and perseverance.

With a comprehensive understanding of the specific educational, examination and experience requirements in your chosen state, careful planning and preparation are crucial.

While the process may seem daunting, the professional and personal benefits that come with earning the CPA designation make the effort worthwhile.

Ensuring you possess the necessary qualifications and a commitment to continuous learning will set the foundation for a successful career in the dynamic field of accounting and finance.