CPA: Definition, Working Area, Salary, and Exams [With PDF]

In this article, we will learn in-depth about CPA, including its definition, working area, how to become a CPA, 4 CPA exams, salary, and much more.

What is a CPA?

A Certified Public Accountant (CPA) is a person who is professional in accounting and tax matters, who has passed the Uniform CPA exam, and also meets the requirements of additional state certification and experience.

A CPA can independently provide services on accounting and tax matters to individuals or businesses. He or she may serve the individual or business internally or through a specialized accounting firm.

In many English-speaking countries, Certified Public Accountant (CPA) is the designation of professional accountants. In other English-speaking countries, it is usually similar to the title of a chartered accountant.

In the U.S. the CPA is a certification to provide the public with accounting services. This is granted for service in that state by any of the 50 states.

The standards for state licensing differ, but the minimum standard criteria include passing the Uniform Certified Public Accountant Test, 150-semester college education units, and one year of accounting experience.

Continuing professional education (CPE) is also required to retain licensing.

Only CPAs are constitutionally capable of providing attestation (including auditing) opinions on financial statements in most US states. Many other CPAs in their state are members of the American Institute of Certified Public Accountants and the CPA society.

Globally, CPA demand is driven by the $8,563 billion market cap of dominant American companies worldwide with 236 percent growth between 2008 and 2018

The working area of CPA

If a person becomes a CPA, they are able to operate in almost any financial sector. CPAs can operate in virtually any financing sector, including whether they deliver services directly to the public or are employed by companies or organizations, including:

Corporate finance
Corporate governance
Estate planning

Assurance and attestation services
Financial accounting
Governmental accounting

Forensic Accounting
Financial analysis
Financial planning

Information technology
Management consulting
Performance management

Income tax
Tax preparation and planning
Venture capital

Financial reporting
Regulatory compliance

How to Become a CPA?

The applicant must sit for and pass the Uniform Certified Public Accountant Examination formed by the American Institute of Certified Public Accountants (AICPA) and administered by the National Association of State Boards of Accountancy (NASBA) to become a CPA in the USA.

Eligibility to sit for the Uniform CPA Exam shall be decided by individual accounting boards of the State.

Many states have implemented what is known as the “150-hour rule” (150 college semester units or the equivalent) which typically requires an additional year of education beyond a standard 4-year college degree or a master’s degree.

After that, you need to pass the Uniform CPA exam and get full-time work experience under the licensed CPA (up to 2 years depending on your state).

In order to retain the CPA certification, CPAs must complete a minimum number of Continuing Professional Education (CPE) courses.

What are the 4 CPA Exams?

The Uniform CPA Exam consists of:

Auditing and Attestation (AUD),

Financial Accounting and Reporting (FAR),
Regulation (REG), and
Business Environment Concepts (BEC).

A total of almost 14 hours of CPA examination also includes writing skills, MCQ, and case studies. Within 18 months you need to pass all four sections, obtaining a minimum score of 75 on each section.

How much money does a CPA earn as a salary?

There is a huge demand for CPAs in various industries. And the demand for CPAs is increasing day by day. Virtually every organization needs a public accountant and auditor.

As tax professionals or business consultants, many CPAs also work. Their skills and training ensure that they can order higher salaries.

Now the question is how much money does a CPA earn annually and how much can it earn?

The salary of a CPA in an organization depends on many factors.

How many years do you have of experience?

The nature of the work you have carried out
And in the sectors in which you have been working

All of this plays a role in determining your salary level.

Now let’s see how much a CPA gets paid

A newly qualified CPA with less than one year of work experience can expect to earn an annual salary of about $6,000, according to a survey conducted by the Association of International Certified Professional Accountants (AICPA).

The average salary of a United States-based CPA is $119,000. CPAs with extensive experience working in the field of accounting and finance can earn a substantial amount. A person with 20 years of experience can exchange an average of $152,000 in annual salary.

It is important to note that these figures do not exclude bonuses, which can be in the range of 10% of the annual salary. Additionally, CPAs can achieve a salary increase of 4% to 5% per year.

Most companies try their best to maintain their accounting talents by providing regular salary increases and bonuses.

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