Certified Public Accountant (CPA) Career Profile
The Certified Public Accountant (CPA) designation is without question the most valuable credential for advancing a career in accounting and auditing. It attests to holding 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, for both small businesses and individuals, many members of the general public erroneously assume that this is the major focus of the profession.
Likewise, it is often assumed that a career in financial management is synonymous with a career in accounting and that holding a CPA is necessary or desirable for those pursuing such career paths. This is another misconception. In fact, the vast majority of corporate jobs in financial management or financial analysis are filled by people who are not trained as accountants, never mind by CPA holders. Neither is a CPA a particularly important certification for many of these positions, though it often can be helpful.
Indeed, while the controller of a major public corporation might be expected to hold a CPA license, this is rarely true of departmental controllers. Meanwhile, it is not unusual for corporate or divisional CFOs to be non-CPAs. Indeed, a highly effective divisional CFO at Merrill Lynch in the early 1990s had taken only one accounting course in his academic career.
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 Become 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 services. 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.
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) began imposing professional standards on paid tax preparers in 2011. These standards include passing an exam, meeting continuing education requirements for 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.
Within much of the English-speaking world outside the U.S., Chartered Accountant, or CA, is the professional certification most similar to the CPA. This is not to be confused with the slightly similarly-titled Chartered Global Management Accountant, or CGMA.