Dear Reader,
It seems that you are reading this blog since you are either a finance /accounts student or a professional want to boost your career towards a broader horizon. You know that earning the Certified Public Accountant (CPA US Course) certification is an excellent idea. You know this because of all the benefits of becoming a CPA.
But you might not know how to walk through every single CPA requirement including the unified CPA US course exam and the CPA licensure procedures. So, let’s start the journey. There are 2 parts in the CPA journey- the CPA exam and the CPA license.
Before you can become licensed as a certified public accountant, you must pass all four parts of the Uniform CPA US course examination: Auditing (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). The exam process could take a year or more to complete, and most jurisdictions require 150 semester hours plus two years of experience. Additionally, some states require an ethics exam.
CPA US course requirements: The basics
Each of the 55 U.S. jurisdictions (the 50 U.S. states plus DC, Guam, Puerto Rico, the Virgin Islands, and the Mariana Islands) maintains its own CPA US course requirements. When you decide to become a CPA US, you must decide which jurisdiction you wish to become licensed in.
You will apply for the US CPA Exam and your CPA US license in that state. You will need to abide by the CPA US course requirements of your jurisdiction to remain licensed.
CPA US course requirements differ by state
Each jurisdiction maintains its own directory of requirements; however, there has been a movement toward uniform standards in recent years. For example, nearly all jurisdictions require 150 semester hours to become licensed as a CPA US now.
However, requirements can still differ among states. While international CPA US course exam administrations are available, each licensing jurisdiction has specific requirements for citizenship and social security numbers, application/registration fees, early examination options, and passage of an ethics exam.
Additionally, licensing requirements may also differ by:
1. The number of education hours required to sit for the US CPA Exam
2. The makeup of coursework within those education hours
3. The years of experience required and how they are validated
4. Whether you can renew a license while inactive
5. The US CPA Exam application process
Requirements to take the US CPA Exam
To be eligible to take the US CPA Exam, you must meet the basic requirements of the board in the jurisdiction where you wish to become licensed.
While these can vary by state, typical CPA Exam requirements include:
1. 120 college credit hours (bachelor’s degree)
2. 24+ credit hours in accounting-related courses
3. U.S. citizenship
4. A Social Security numbers
5. Minimum age of 18 years old
Every state requires you to complete either 120 or 150 credit hours at an accredited college or university before you can apply to take the US CPA Exam.
Usually, a minimum of 24 hours of your coursework needs to be in accounting. Still, some states require that you also complete several hours in general business subjects like finance, business law, or management.
Some states require a bachelor’s degree in accounting or other business-related fields like finance, while others are fine with a general bachelor’s degree. A few states will allow you to sit for the US CPA Exam before you graduate.
Contact your state board of accountancy if you would like to confirm that your academic credits qualify. As part of the US CPA Exam application process, you will have to submit your transcripts.
US CPA Exam Requirements by State
Every state board requires CPA US course candidates to pass the Uniform CPA Examination. The AICPA developed the Uniform CPA Examination with input from NASBA and the state boards of accountancy.
The CPA Exam consists of 4 sections that cover a wide range of accounting topics.
Specifically, the CPA Exam sections include:
1.Auditing and Attestation
2.Business Environments and Concepts
3.Financial Accounting and Reporting
4.Regulation
The US CPA Exam sections present several different question types in a series of testlets. These question types include:
A, Multiple-choice questions
B. Task-based simulations
C. Written communications
Candidates have 4 hours of total testing time for each exam section, and they must pass all 4 sections of the exam within an 18-month period. Each state board of accountancy also defines the US CPA Exam eligibility requirements that candidates must meet in order to sit for the exam.
Almost all of the state boards want candidates to have 120 credit hours of education, the equivalent of a bachelor’s degree, before they will let you sit for the US CPA Exam. But, can you take the US CPA Exam while still in school? Yes, some states let you sit for the exam with less than 120 credit hours if you’re close to graduating.
For example, several states require you to be within a certain time frame of securing the 120 hours, such as 6 months away from graduating with a bachelor’s degree or within 15 credit hours of the 120-hour requirement. Other states make the 150-hour rule part of their CPA test requirements. These states might make similar provisions for those who are close to acquiring 150 credit hours.
Finally, many state boards also require you to have a certain number of upper-level accounting credit hours before you can sit for the US CPA Exam. Ultimately, each state board decides who is eligible to sit for the exam in their state. I try my best to keep up with each state’s requirements in the pages on my site, but these requirements change sporadically and without much warning. Therefore, the best way for you to be certain that your understanding of your state board’s requirements is up to date is to visit your state board’s website or contact them directly.
US CPA Exam 2021 – New Updates In 2020, the US CPA exam in India had few changes; the most prominent change was the introduction of the CARES Act to the REG section effective in Q4 2020. In 2021, the US CPA Exam will undergo additional changes, mainly to the AUD & BEC sections, with minor revisions to the remaining two sections – FAR & REG….continue reading
CPA US License Requirements
Becoming a licensed Certified Public Accountant (CPA US ) involves acquiring a combination of education, work experience, and passing examination scores. However, the CPA license requirements are not universal. In the U.S., the boards of accountancy of the individual states/territories determine the regulations for accounting and dictate the requirements for CPA licensure. There is no one national governing body that makes these rules. Therefore, each jurisdiction has a slightly different set of CPA requirements, though there are general areas of overlap within each state’s requirements.
Since each state enforces distinct CPA requirements, earning the CPA license from certain states might be easier for you than from others. And luckily, you can choose. You are allowed to pursue a CPA license in any state, even if you don’t live there.
Across the states, the basic CPA requirements would be the 3 Es:
A. Education: earn a 4-year bachelor’s degree and 150 credit hours of general education
B. Exam: pass the entire Uniform CPA Examination
C. Experience: acquire at least 1 year of relevant accounting experience.
So, all CPA candidates must meet these requirements in some way. However, many states also have one additional “E” requirement:
D. Ethics: pass the state’s ethics examination
The 3 Es are the most generalized summary of the CPA US course requirements. Each state has an education, exam, and experience requirement of sorts, but the differences among the CPA state requirements manifest themselves in the type of educational credit hours needed, the US CPA Exam requirements, and the amount and type of work experience expected. Which ethics exam the state uses is another point of distinction.
CPA US Course Work Experience Requirements by State
The CPA US course work requirement has the most variability of all the requirements. Some state boards only accept experience under a licensed CPA, while others readily accept academic and non-public accounting experience.
Many states substitute higher amounts of non-public accounting work experience for lower amounts of experience acquired under the direct supervision of a CPA US. Most states require 1-2 years of relevant accounting experience, and they often make provisions for part-time work as well.
The Application
It might seem that applying for the US CPA Exam is more difficult than the US CPA Exam. After all, there are many different facets to the application which can make the process a bit confusing. This is especially true since US CPA Exam requirements vary by state.
One thing to keep in mind is that there are two routes US CPA Exam candidates can go through when they’re applying to the US CPA Exam:
1. State Boards of Accountancy, or
2. NASBA (National Association of State Boards of Accountancy).
Which route you take to apply for the US CPA Exam depends entirely on the state you’re obtaining your CPA license in. If you’re applying to any of the states below, you will be applying through CPAES (CPA Examination Services), a part of NASBA which provides a comprehensive array of services to state boards of accountancy related to the CPA Exam. The CPAES includes application processing, credential evaluations, and score reporting.
Alaska, Colorado, Connecticut, Delaware, Florida, Georgia, Guam, Hawaii, Indiana, Iowa, Kansas, Louisiana, Maine, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New Jersey, New Mexico, New York, Ohio, Pennsylvania, Puerto Rico, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Washington and Wisconsin.
If you are not applying to any of the above states, your application will be handled and processed directly through your State Board of Accountancy I.e. Independent states. Every state has its own decision as to whether they would like to be a part of NASBA’s CPAES jurisdiction.
States that decide to remain independent do so for several reasons, such as being able to control their own fees and giving candidates a wider range to choose from when it comes to third party companies/organizations that handle credential evaluations and other administrative services. This means that CPA Exam costs will vary more widely within these states, especially when it comes to initial application and registration/re-examination fees.
For these states (listed below), candidates will also contact their State Board of Accountancy directly to determine whether they’re eligible to sit for the CPA Exam. The only part where State Boards of Accountancy interact with NASBA is for processing fees and issuing Notices to Schedule (NTS).
Alabama, Arizona, Arkansas, California, District of Columbia, Idaho, Illinois, Kentucky, Maryland, Mississippi, Nevada, North Carolina, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Virginia, West Virginia, Wyoming and Virgin Islands.
CPA Examination Services States
For states that are a part of NASBA’s CPAES jurisdiction, the application process is much more streamlined. States that decide to utilize NASBA and CPAES do so to make the application process for candidates more simplified.
Candidates applying through CPAES will find that there are no third-party companies/organizations used to help evaluate credentials or process their application. This means that US CPA Exam costs have less variation from state to state. Initial application, individual US CPA Exam sections, and registration/re-examination fees remain relatively the same.
For these states, candidates go directly through CPAES to learn more about what requirements they need to meet to be eligible to sit for the US CPA Exam. CPAES works with the State Board of Accountancy to determine this. The only other time CPAES interacts with State Boards of Accountancy are when candidates are issued their actual CPA US license.
Many international candidates apply to states under NASBA’s CPAES jurisdiction since the application process can be more efficient and simpler, offering in-house credential evaluation services as well as other resources that tailor to their unique circumstances.
The difference between applying to sit for the CPA Exam through NASBA vs. a state board of accountancy
NASBA CPA Examination Services (CPAES) provides a comprehensive array of services to state boards of accountancy related to the Uniform CPA Examination (Exam). Using this service means that some processes like application processing, credential evaluations and score reporting are managed through the website. There are 32 states/jurisdictions that utilize this service. Visit the NASBA website in order to check if your jurisdiction participates.
If your jurisdiction does not participate in the CPAES service, then you will have to visit your state board’s accountancy website. You may be able to submit items online or you may be required to mail them. Also, communication regarding scoring may occur through the website or through mail.
Finding an easier state
What to do if you don’t have 150 credit hours, are a non-accounting major, lack the required work experience, or are not a U.S. citizen/resident, you will have fewer state board options from which to choose.
So, either way, you can determine the easiest state to become a CPA US by comparing your current qualifications and plans for the future with the CPA US state requirements and discovering how you can meet those requirements in your situation.
States That Don’t Require 150 Hours of Education
A typical 4-year bachelor’s degree only awards you 120 credit hours of education. Therefore, you must acquire additional education to meet the CPA US course education requirement of 150 credit hours.
What’s more, you must understand that 150 hours is the standard for all accounting students graduating within the U.S. Therefore, the state boards are simply asking you to match that standard. In the past, some states allowed candidates to get the CPA US license with just 120 credit hours (California, Colorado, Delaware, New Hampshire), but every state now enforces the 150-hour rule.
CPA US Course Work Experience Requirements by State
The CPA work requirement has the most variability of all the requirements. Some state boards that only accept experience under a licensed CPA, while others readily accept academic and non-public accounting experience.
Many states substitute higher amounts of non-public accounting work experience for lower amounts of experience acquired under the direct supervision of a CPA. Most states require 1-2 years of relevant accounting experience, and they often make provisions for part-time work as well.
Picking a State Board Based on CPA Licensure Requirements
If you believe that meeting the requirements of the state in which you currently reside will be too challenging, then a different state may be a better fit for you. Furthermore, if you don’t have 150 credit hours, are a non-accounting major, lack the required work experience, or are not a U.S. citizen/resident, you will have fewer state board options from which to choose. So, either way, you can determine the easiest state to become a CPA by comparing your current qualifications and plans for the future with the CPA state requirements and discovering how you can meet those requirements in your situation.
States That Don’t Require 150 Hours of Education
A typical 4-year bachelor’s degree only awards you 120 credit hours of education. Therefore, you must acquire additional education to meet the CPA education requirement of 150 credit hours. What’s more, you must understand that 150 hours is the standard for all accounting students graduating within the U.S. Therefore, the state boards are simply asking you to match that standard. In the past, some states allowed candidates to get the CPA license with just 120 credit hours (California, Colorado, Delaware, New Hampshire), but every state now enforces the 150-hour rule.
Taking the CPA Exam Without an Accounting Degree?
Here Are the States That Don’t Require an Accounting Degree. Instead of a full accounting degree, some states simply require candidates to have a certain number of accounting credits to earn the CPA license. Usually, these state boards ask for about 24 credit hours in accounting. You’ll still need to earn a bachelor’s degree, but it can be from a different major, such as marketing.
But oftentimes, these states will enforce a stricter experience requirement to compensate for less stringent educational requirements. For example, the U.S. Virgin Islands has 2 paths to CPA licensure that do not specify a certain number of required accounting courses.
Instead, these options substitute higher levels of work experience for the presence of particular accounting education hours. South Carolina, on the other hand, requires CPA candidates to have 24 semester hours in accounting courses. So, the range of CPA class requirements among jurisdictions is fairly broad.
Many CPA state boards also specify the level of accounting courses you must take. They often limit lower-level accounting classes and require more upper-level (junior-level and above, 300+) courses. Additionally, several states have certain mandatory courses that each CPA candidate must take to fulfil the upper-level requirements.
Moreover, a jurisdiction also has the prerogative to disallow lower-level credits earned through non-traditional methods. To use South Carolina as an example again, this jurisdiction requires 24 of the 36 semester hours in accounting to be junior level or above. They also include a list of 4 mandatory upper-level courses: cost/managerial accounting, auditing, intermediate/financial accounting, and U.S. Tax. South Carolina also does not accept non-traditional credits such as placement credits and exemptions.
Consequently, some jurisdictions are much more particular about the accounting courses you must take. For this reason, earning the CPA as a non-accounting major usually involves a bit more concentration and effort.
States That Don’t Require Traditional Work Experience
Can you earn the CPA license without work experience? Not really. But in some states, the CPA experience requirements are laxer than in others. For example, most states nowadays are fine with general accounting work from private industries, government, and even academic teaching positions. Therefore, a non-public accounting career plan shouldn’t be an issue when choosing a CPA state board of accountancy.
Instead, due to the popularity of leniency in this area, you have several options for fulfilling the CPA work experience requirement. If you have never worked in public accounting and don’t plan to work in public accounting, you still have several state boards from which to choose. However, some of these state boards require additional years of experience from a non-public accounting field. North Carolina, for example, requires 4 years of experience teaching accounting at a college or university or 4 years of experience working in the field of accounting without the supervision of a CPA.
On the other hand, this jurisdiction only requires 1 year of accounting experience under the supervision of a CPA. That’s quite a difference! Many other states only require 1 year of work experience, whether it be in academics, general accounting, or public accounting. So, if you don’t plan to work in public accounting, you should seek to apply to one of these states, as you wouldn’t have to work 4 times longer than necessary (like you would in North Carolina) if you don’t have to.
No Work Experience Completed under the Supervision of a U.S. CPA
Maybe you’ve never worked under a CPA US and never plan to. For example, maybe you work in a private industry where CPAs are less common. Or maybe you work outside the U.S. and your supervisor isn’t licensed in the United States. In these cases, you’ll need to find a state board of accountancy that makes allowances for these situations with their CPA experience requirements. Some states do when the candidates can prove that substantial accounting skills have been relevant to their jobs.
And typically, any supervisor who can reasonably verify that you are using relevant accounting skills will suffice. However, self-employment does not usually satisfy the work experience requirement. Examples of states you could apply to when you don’t plan to work under a CPA include the jurisdictions of Illinois, Ohio, Wisconsin, and Virginia. After all, they recognize experience supervised by a non-CPA. So, as long as you work in a relevant field, you can get a license for one of these states.
Additionally, Montana, Washington, Arkansas, and Indiana allow someone other than your boss to verify your experience. So, this exception provides some flexibility as well. Finally, there are even some states that don’t require any working experience. But CPA licenses they offer in these situations restrict how you can hold yourself out as a CPA US. One example is Guam, which has an inactive license. Massachusetts is another option because it offers a non-reporting license.
Which State Board is Favourable for International Students?
Based on the flexibility, below are some CPA US state boards which appear suitable for International students.
A. Virginia
May Accept BCOM + CA; Your Supervisor/Verifier doesn’t Need to be a CPA. You can sit for the exam in Virginia as long as you have 120 credit hours, 24 accounting credit hours and 24 business credit hours. Also, I heard that BCOM + CA could be deemed an equivalent US bachelor degree as long as the evaluation report says so. Given rules change all the time, BCOM + CA holders who want to take this route must first double check with Virginia state board.
Another great advantage of Virginia is the flexibility of working experience requirement. You need to work 1 year in a relevant field, but, unlike most other state boards, Virginia doesn’t require your supervisor (i.e. your verifier of experience) to be a CPA. This means that as long as you work in accounting, you can qualify to get the license.
Restrictions/disadvantages of Virginia
Strict requirement of social security number, which makes most international candidates and H4 visa holders ineligible. You need to be concentrated in accounting, i.e. this state is not for non-accounting majors. At the end of the day you do need 150 credit hours to get the license.
B. Guam:
120 Credit Hour + No Experience Needed if You don’t Mind the Inactive License. As long as you are an accounting major with a 4-year bachelor degree, and do NOT practice within Guam territory (hold yourself as a Guam CPA), you can get an “inactive” license without SSN, working experience and fulfilling the 150 credit hours.If you are not an accounting major you do need to fulfil the 150 credit hours.
C. Alaska:
One can Sit Before Getting 120 Credit Hours. There are quite a lot of international candidates going through Alaska so it’s worth mentioning here. Since Alaska allows candidates to sit for the exam before the graduation, 3-year BCOM degree holders can technically sit for the exam as long as they fulfil enough accounting credit hours (the requirement depends on whether you are an accounting or non-accounting major).
Washington:
Experience can be Verified by third party. Washington requires candidates to have the full 150 credit hours to sit for the exam, but your experience can be verified by a CPA who is not your supervisor. In other words, you can verify the non-US experience that you may have by someone you know who happens to be a US CPA — could be friend, a mentor, a business partner, which makes things much easier.
For Washington, this verifier must be an active US CPA for 5 years or more. The working experience requirement is also quite vague: 2 years of relevant experience deemed appropriate by the Board. I suggest that you find out whether your work is acceptable (by double checking with the state board) before applying through Alaska.
Conclusion
By now, we came to the end of our journey regarding state wise requirements for US CPA exam and licensure procedures. Understanding the US CPA Exam and license requirements for the state you’re interested in as early as possible can help you better prepare for the exam. By judicious selection of the appropriate state board, CPA US course is very much doable and possible to achieve within the stipulated period of 18 months.
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