What Is a CPA: The Certified Public Accountant (CPA) designation is a valuable credential for advancing a career in accounting and auditing. It attests to your in-depth knowledge of accounting principles and practices, including applicable laws and regulations. Because many holders of the CPA in private practice devote a considerable portion of their time to preparing and filing tax returns, both business and individual, many members of the general public erroneously assume that this is the major focus of the profession.
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Earning a CPA: You are required to pass an exam and fulfill continuing professional education (CPE) requirements. Complicating matters is that most states have their own boards of accounting (also known as boards of accountancy) that regulate the profession and the awarding of the CPA license. Thus, qualifying to practice in one state may not automatically allow you to practice in another. If you work within a large corporation with a multi-state footprint, many of these complications can be overcome.
Why Get a CPA: To pursue a career as an auditor, the CPA is a must for advancement. Without it, you are limited to entry-level jobs supervised by a CPA. The Big 4 (Big Four) firms that dominate public accounting are PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, and KPMG.
Aside from the public accounting sector, within other financial services firms (like banks, brokerage firms and investment firms) the CPA license is required only in some highly specialized support functions such as internal audit. Indeed, the vast majority of jobs within the controller and compliance functions outside public accounting firms themselves are filled by people without a CPA, even senior management positions.
If you already hold a CPA, use it as a major selling point in seeking any position in financial sevices. A CPA license is widely respected as an indicator of quantitative skills and high standards of professionalism. As such, it can vastly enhance your credibility as a job applicant. In particular, if you wish to pursue a career in securities research, holding a CPA indicates that you have much of the in-depth knowledge necessary to analyze financial reports thoroughly and systematically. However, it probably is not worthwhile to obtain a CPA strictly as a means to launch a financial services career outside the public accounting sector itself.
Tax Preparers: Many CPA holders are involved in the preparation of individual or small business tax returns, either in the course of their work or as a sideline. The Internal Revenue Service (IRS) has announced that it will impose professional standards on paid tax preparers starting in 2011. These standards will include passing an exam, meeting continuing education requirements of at least 15 hours per year, registering with the IRS, and paying an annual registration fee. However, CPA holders will be exempt from these requirements, given the professional standards to which they already are subject.
For More Information: See the American Institute of Certified Public Accountants (AICPA) website.
Chartered Accountant: Within much of the English-speaking world outside the U.S., Chartered Accountant, or CA, is the professional designation most similar to the CPA.
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