Public accounting is strictly regulated at the jurisdictional level, with each state and jurisdiction maintaining its own set of professional standards for certified public accountants. The CPA credential denotes competence and experience, assuring the public that the holder has met high education standards, has passed the CPA exam, and has gained on-the-job experience.
In simplest terms, the route to CPA licensure is a three-step process in accordance with the three E’s – education, experience and examination.
- Grand Canyon University - Bachelor's and Master's in Accounting
- SNHU - A.S. in Accounting, B.S. in Accounting, and M.S. in Accounting
- Capella University - BS Accounting CPA Pathway
- Capella University - MBA Accounting CPA Pathway
Some jurisdictions also require the successful completion of an ethics examination. This is sometimes called the fourth “E.” Many of these states require that candidates for CPA licensure pass the AICPA Professional Ethics Exam, while others have their own exams that focus on laws, regulations, and codes of ethical conduct within their respective states.
CPA Requirements By State
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Rhode Island
- South Carolina
- South Dakota
- West Virginia
CPA Licensing Requirements: Education
All 55 U.S. jurisdictions either require 150 semester hours of college education for candidates to be eligible for licensure, or are in the process of implementing this requirement. The 150 semester-hour requirement may be met by completing a bachelor’s degree (which is usually 120 semester hours) along with additional graduate-level coursework.
Within the 150-hour requirement, each state sets its own standards for course requirements. For example, Virginia requires applicants to complete at least 24 semester hours in auditing, financial accounting, management accounting, and taxation, and at least 24 semester hours of business courses.
However, because of the additional coursework requirements beyond a bachelor’s degree, it is common for accountants to pursue a master’s degree, which satisfies the 150-hour requirement while providing a greater level of preparedness. In addition, professional accounting programs often provide five-year, integrated programs that satisfy the 150-hour requirement and lead to a master’s degree in accounting.
CPA Licensing Requirements: Experience
All jurisdictions require that candidates for CPA licensure complete at least one year of public accounting experience, which may include experience in business and industry, government, or academia. Alabama, for example, requires either one-year of public accounting experience or two years of industry, business, government, or college teaching experience.
Experience must be gained under the supervision of a CPA with a license in good standing, and must be thoroughly documented.
State boards of accountancy currently have either a standard one-tier licensing process, or the less common two-tier licensing process:
- One-Tier System: Applicants must pass the CPA examination and fulfill the experience requirements to become certified and allowed to go into practice. The majority of states fall under the one-tier system.
- Two-Tier System: Applicants may obtain a CPA certificate by passing the CPA examination, but they must fulfill the experience requirements to obtain the actual license, sometimes referred to as a permit to practice public accounting. Kansas, for example, issues a certificate once a candidate passes the CPA exam, but the CPA license (permit to practice without supervision) is not issued until the experience requirement is met.
Most states are expected to move towards uniformity under the one-tier process in the coming years.
CPA Licensing Requirements: Uniform CPA Examination
The Uniform CPA Examination is the standard competency evaluation for CPA licensure used in all jurisdictions. It was designed to protect the public interest by ensuring that only qualified accountants become licensed as CPAs. Developed by the American Institute of CPAs with significant assistance from various state boards of accountancy and NASBA, the Uniform CPA Exam remains the only qualifying exam in place, and is a requirement in all 55 jurisdictions.
The Uniform CPA Examination is designed to assess the knowledge and skills that all Certified Public Accountants are expected to have.
The CPA exam is a 14-hour, computer-based examination that is comprised of four sections:
- Auditing and Attestation
- Business Environment and Concepts
- Financial Accounting and Reporting
The exam consists of a number of question formats, including multiple-choice questions, essays, and workplace simulations.
Although licensing requirements vary from state to state, and eligibility to sit for the exam depends on the requirements set forth by the state board of accountancy, the CPA exam is identical, regardless of the state or jurisdiction.
All jurisdictions require applicants to meet specific educational requirements prior to sitting for the Uniform CPA examination, although not all jurisdictions require the completion of the 150-semester hours required to become licensed.