Certified Public Accountant

Professional designation in accounting

A Certified Public Accountant (CPA) is a professional designation given to qualified accountants in numerous countries around the world. In the United States, the CPA designation is granted by each of the 50 states for accountants who have passed the Uniform CPA Examination and met additional state education and experience requirements. CPAs are responsible for maintaining and auditing financial records, preparing tax returns, and providing consulting services to businesses and individuals.

History

The CPA designation was first established in the United States in the early 20th century. The American Institute of Certified Public Accountants (AICPA) was founded in 1887 and played a significant role in the development of the CPA profession. The Uniform CPA Examination was introduced in 1917 to standardize the certification process across different states.

Requirements

To become a CPA, candidates must meet the following requirements:

• Education: Most states require a minimum of 150 semester hours of college education, which typically includes a bachelor's degree in accounting or a related field.
• Examination: Candidates must pass the Uniform CPA Examination, which consists of four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).
• Experience: Many states require candidates to have one to two years of relevant work experience under the supervision of a licensed CPA.
• Ethics: Some states require candidates to pass an ethics exam or complete an ethics course.

Roles and Responsibilities

CPAs perform a variety of tasks, including:

• Auditing: Examining financial statements to ensure accuracy and compliance with Generally Accepted Accounting Principles (GAAP).
• Taxation: Preparing and filing tax returns for individuals and businesses, and providing tax planning advice.
• Consulting: Offering financial and business consulting services, including risk management, financial planning, and business strategy.
• Forensic Accounting: Investigating financial discrepancies and fraud.

Continuing Education

CPAs are required to complete continuing professional education (CPE) to maintain their license. The number of required CPE hours varies by state but typically ranges from 40 to 80 hours per year. CPE courses cover a wide range of topics, including accounting, auditing, taxation, and ethics.

Related Designations

Other professional accounting designations include:

• Chartered Accountant (CA)
• Certified Management Accountant (CMA)
• Certified Internal Auditor (CIA)
• Enrolled Agent (EA)

See Also

• American Institute of Certified Public Accountants
• Uniform CPA Examination
• Generally Accepted Accounting Principles
• Financial Accounting Standards Board
• Public Company Accounting Oversight Board
• Internal Revenue Service
• Taxation in the United States