There is a lot to learn in the process of becoming a CPA, and getting your license depends on more than just sitting for the Exam. There are even differences depending on what state or jurisdiction you are applying in. Before we dig into the details, let's cover some of the basics.
What does CPA mean?
Not all accountants are CPAs, but all CPAs are accountants.
CPA stands for Certified Public Accountant. A person with that title has passed the CPA Exam, completed their experience requirements, received certification from their state board of accountancy, and thus can be a trusted advisor to help individuals, organizations, and companies thrive financially. A CPA may specialize in different fields of accounting, including (but not limited to) auditing, taxation, and business valuation.
Tip: You can decide where you want to specialize after you get your license; you don't need to have that figured out before.
What Does it Take to Earn My CPA License?
Each state and jurisdiction has unique requirements determined by their board of licensure, but there are three things all candidates need to check off their list. Every candidate will need to:
- Obtain the required education to sit for the CPA Exam
- Pass all fours sections of the CPA Exam
- Meet the experience requirements set forth by their licensing board
Tip: Check out our state requirements page to determine the unique requirements for your state.
What are the Education Requirements to sit for the CPA Exam?
Depending on the jurisdiction, education requirements to sit for a CPA Exam vary, one reason that some candidates choose to apply in a state or jurisdiction other than their state of residence. For example, in Alabama, a candidate only needs 120 credit hours to sit for an Exam.
Though the number of hours required to sit for an Exam may be different, credit hours for licensure are the same across the board. In all 55 states and jurisdictions, CPA candidates need to have 150 credit hours before being eligible to apply for their CPA license. Make sure to check with your licensing board in regards to what types of classes are accepted.
Tip: Just because you have enough hours to sit for the exam doesn't mean you should sign up for the test yet. Those additional hours may help with your Exam studies.
Can I take the CPA Exam Without a Master’s Degree?
The short answer is yes. You don't even need a Master's degree to get your CPA License.
The long answer is that150 credit hours** are required to apply for licensure. These credit hours must meet the guidelines of the state or jurisdiction you are applying in. Most bachelor programs are 120 credit hours, and adding a master's program gives you those additional thirty credit hours. Nothing is requiring those additional hours to come from a specific program; however, keep in mind that most licensing boards require a certain number of accounting-specific hours.
** That's semester credit hours, not quarter credit hours. If your school is on a quarter system, you have to convert your quarter hours to semester hours by dividing your quarter credits by 1.5. As an example, 225 quarter credit hours ÷ 1.5 = 150 semester credit hours.
How do I Pass the CPA Exam?
To pass the CPA Exam, you will need to pass all four sections of the CPA Exam with a score of 75 or higher. These four sections are:
- Financial Accounting and Reporting (FAR)
- Regulation (REG)
- Auditing and Attestation (AUD)
- Business Environment and Concepts (BEC)
Though you can take these sections in any order, they're listed above in our recommended testing order. If you're curious about why we recommend taking the exams in a specific order, take a glance at our blog about that topic.
All four Exam sections consist of multiple-choice questions and simulations; BEC also includes a Written Communication section. Regardless of location, all students take the same test.
Tip: Review the AICPA’s blueprints for the contents of each section.
Can I Pass the CPA Exam Without Studying?
Maybe? We wouldn't recommend trying it unless you are prepared to accept that your first Exam was a very expensive practice test. The CPA Exam is one of the hardest licensure exams, with an average pass rate between 44% - 62%, depending on which Exam section you're taking. There are always going to be those stories where "a friend of a friend's third cousin twice removed sat for all four sections and passed without a day of studying!" But realistically, the pass rate statistics don't support passing without studying.
How do I Study for the CPA Exam?
The best (and most efficient) way to study is to use a CPA Exam Review course. The pass rates for students who utilize a review course is much higher than the rates for students who study on their own. There are many options in CPA Review materials, and you can even get access to practice questions, quizzes, and exam simulations.
Tip: Make sure your course has a way for you to connect with CPA Exam advisors and professors who can walk you through difficult concepts and sections of studying.
What CPA Exam Work Experience do I need?
This is a jurisdiction-specific requirement. In general, most licensing boards require you to have one to two years of work experience under a CPA. This experience requirement is often stated as a required number of hours, and only specified categories of work activities qualify toward that hour requirement. Also, factors such as working for a public accounting firm or having a graduate degree can change the experience requirement. Check your licensing board to see what the requirements are.
Tip: once you have the experience, you'll still need to apply for your license.
How do I get my CPA License?
I know we may be starting to sound repetitive, but you'll want to review the licensing board's requirements before doing anything else. In general, the process goes something like this:
- Verify you’ve met the licensing board’s education, exam, and experience requirements.
- Take an ethics exam (currently, 35 of the 55 jurisdictions require an ethics exam at some point in the licensing process). Read more about the ethics exam.
- Apply for licensure through your licensing board!.
Tip: This application process can take weeks, so be patient; you’re almost there!
Ready to start studying for the CPA Exam? Join our Seven-day Kickstart Challenge- 7 Days of 7 Straightforward, Actionable CPA Exam Prep Tips and Free Tools to get you started on the path to CPA.
P.S. Don’t forget to keep an eye out for Part Two: What to do after you’ve gotten your CPA license, including requirements to maintain it and improve your skills and connections.