What is CPA?
What is a CPA? (Certified Public Accountant)
CPA, which stands for Certified Public Accountant, is a professional accounting qualification acknowledged globally and provided by The American Institute of Certified Public Accountants (AICPA).
CPA professionals gain in-depth knowledge of various accounting principles and tools required for the financial management of small to mid to large corporations. CPAs usually are responsible for providing financial advice, auditing, taxation, and other services related to financial matters.
CPA is generally considered an alternative to CA. However, CPA has more value than CA due to its acceptance in the global industry verticals. To become a CPA, the candidates need to clear the CPA exam, which consists of four exams (will discuss it thoroughly in the blog later).
Another crucial aspect of CPA that you must know about is Generally Accepted Accounting Principles, commonly known as GAAS. With time and evolving businesses, auditing has become more important than ever before. Auditing standards have significantly evolved and new principles are introduced to maintain consistency and uniformity in audit performances.
These principles are established by The American Institute of Certified Public Accountants (AICPA) and are usually referred to as GAAP. They are a set of rules and standards which advises CPAs on how to record and report financial information. The CPAs must adhere to the GAAP principles while performing audits of financial statements to generate standarised results.
The US GAAP principles include:
- Adequate planning and supervision
- An understanding of the financial entity and its environment
- Appropriate audit evidence
- Reasonable assurance of detection of material misstatements
- Evidence of compliance with Generally Accepted Accounting Principles
- The Reporting of audit results
Ready To Start Your Journey As A CPA?
Understanding the Job Responsibilities of a CPA
As a certified public accountant, you will be working with individuals and businesses in numerous industries to advise them on financial and tax-related matters. However, the specific job duties depend upon the profile you take as an accounting professional.
Here are some of the job roles you can take after clearing the CPA exam:
|Tax Accountant||Financial Controller||Investment Banker|
|Financial Analyst||Business Valuation Manager||Corporate Accounting Manager|
|Auditor||Forensic Accounting Professional||Government Accountant|
Generally, all these job profiles share some common job responsibilities, such as
- Preparing, examining, and analysing the financial statements and reports of an organisation.
- Advising clients on business and financial matters.
- Preparing tax returns and advising clients on tax planning.
- Ensuring compliance with federal, state, and local laws and regulations.
- Managing or advising clients on investments.
- Developing financial strategies to help clients meet their long-term financial goals.
- Inspecting and reviewing internal financial controls.
- Managing accounting and financial systems.
- Analysing financial data and preparing business forecasts.
- Consulting for new and existing businesses.
Certified Public Accountant is a highly acknowledged qualification that enables a candidate to set their career trajectory to the path of growth. CPA qualification allows candidates to identify several lucrative job opportunities over time.
With the right combination of experience, education, and certifications, a CPA can rise to the top of the accounting profession, such as becoming a partner in a firm or a chief financial officer in a large corporation.
What is the Skillset Required to Become a CPA Professional?
Clearing the CPA exam to become an accounting professional is no piece of the cake. It requires an extensive skill set for a person to become a CPA. Without the necessary skills, becoming a successful CPA is nearly impossible.
Here are some of the most vital skills that a CPA professional must possess:
A CPA Must Have Terrific Problem-Solving Skills
CPAs often deal with complex financial issues for which they need to develop creative solutions and effective strategies. Problem-solving skills are essential for CPAs because they must be able to analyse financial data and make sound judgments based on their findings. They must also be able to identify risk areas and recommend appropriate countermeasures.
Solving a Problem Using Critical Thinking Abilities
Critical thinking skills are essential for CPAs to fulfil their role and advise clients on financial matters. The job of a CPA generally includes
- Assessing the accuracy of financial documents
- Identifying discrepancies and business trends
- Detecting fraud or errors.
Hence, to ensure the best results, it is important for the CPA to analyse data, evaluate it, and further put it into meaningful insights for the business.
Effective and Clear Communication is the Key to Becoming a Successful CPA
In today’s growing business world, communication is an essential asset for any working professional. A substantial amount of mistakes happen across projects due to ineffective and unclear communication.
Hence, a CPA must definitely possess good communication skills that can help them deal with different associates globally and generate the best output of their work.
A CPA Should Have a Detailed Understanding of Business
A CPA should have a good understanding of business because they are responsible for providing financial advice and guidance to their clients. They must be able to clearly identify and assess risks, understand the financial implications of decisions, and provide meaningful insights into the financial health of a business.
Therefore, a CPA must thoroughly comprehend basic business strategies and operating principles of their organisation so that they can help achieve the intended results.
Organisational Skills are a Must!
Today’s organisations are more complex than ever before. The roles and responsibilities of every job employee have multiplied manifolds. Besides, companies need to ensure the delivery of their projects on time.
On top of that, there are standardised processes and workflows that need to be followed accurately. So, a CPA must work and sharpen their organisational skills of preparing accurate reports, organising documents, and keeping track of crucial deadlines for tax returns and audits.
The CPA Should Have Good Technical Skills
Financial management has become more effective and quicker because of the use of technology and valuable software. As a CPA, you must gain the required skills to use cutting-edge financial software that can aid in your development of business strategies.
You must understand and learn how to use software such as QuickBooks, TurboTax, and Drake Tax software. Learning to leverage these tools will be extremely beneficial for your career growth.
Do Not Miss On the Analytical Skills
Good analytical skills are essential for CPAs to be able to provide the best advice to their clients. By analysing data and identifying patterns, CPAs need to spot problems and create innovative and effective solutions for them.
Hence, CPAs need to have exceptional analytical skills to develop strategies for managing finances and making informed decisions that will lead to greater success for their clients.
Have the Skills to Clear the CPA Exam?
Do you have the given skills to clear and become a CPA? Let us conclude by first examining the exam structure of CPA.
CPA Exam Structure
The CPA is a four-hour-long exam administered by the American Institute of Certified Public Accountants (AICPA). The exam is divided into four sections, namely:
- Auditing and Attestation (AUD): This section focuses on auditing standards, ethics, and the overall attestation process.
- Financial Accounting and Reporting (FAR): This section covers topics such as financial statement preparation, disclosure requirements, and accounting standards.
- Regulation (REG): This section includes the study of taxation, business laws, and professional ethics.
- Business Environment and Concepts (BEC): This section consists of business concepts and theories, strategic planning, economics, and financial management.
Each section of the CPA Exam is multiple choice, with some questions having multiple parts. All sections of the exam also contain some task-based simulations (TBS) and subjective questions. The exam is scored on a scale of 0-99, with a minimum passing score of 75.
Here is the table depicting the skills that will be analysed in these respective exams:
|Subject||Comprehension of Problem||Application||Analysis||Evaluation|
Why CPA is Considered a Reliable Career in Finance Sector?
CPA is one of the most prominent qualifications for financial professionals in today’s time. It prepares candidates with enormous skills that help them to secure the best job opportunities. Here are some other reasons that make CPA a great career option:
Lucrative Job Opportunities Across the Globe!
One of the top reasons for financial students leaning towards CPA is the lucrative job opportunities it offers across the globe. Below is a picture depicting the growing number of CPA jobs and the salary offered to an entry-level CPA.
Payscale suggests a CPA earns an average base salary of Rs 690,000/ year. Having said that, it is clear that CPA is a professional course that can help you earn good money and create a better living status for yourself.
Professional Recognition with Higher Credibility!
Another reason that sets CPA apart from its alternative financial courses is its global professional recognition. CPA is a financial course offered by AICTE, which is acknowledged by the majority of organisations operating in the world. A student clearing a CPA exam automatically gets filtered from the existing financial professionals and increases their scope of earning a reputable job.
Enhanced Job Security!
CPAs have the potential to have long-term job security. Research.com suggests that the demand for CPAs is expected to grow 11% from 2018 to 2028, which is significantly faster than the average for all occupations.
This is because the number of businesses in the world is significantly surging, and they require more and more financial professionals to handle their processes. Hence, considering the above-given analysis, the coming years are a golden opportunity for finance students to make the best of their careers.
Exponential Growth Trajectory!
As the economy has grown, more organisations are seeking the services of CPAs to assist with their financial and compliance needs. In addition, the complexity of taxation and accounting regulations has resulted in a need for specialised expertise that only CPAs can provide.
This change in the industry is immensely beneficial for CPAs as they get the opportunity to achieve exponential growth in their career and earn higher salaries than ever before in the financial sector.
Did you know, CPAs in India earn an average of INR 9.5 LPA? Start Your CPA Journey Today
How to Become a CPA Professional?
To become a CPA, you must clear the CPA examination conducted by The American Institute of Certified Public Accountants (AICPA). Here are the other eligibility guidelines that must be followed:
- The candidate must have a bachelor’s degree or equivalent to enrol in the CPA certification program.
- The candidate should have 120-semester credits to enrol for the CPA examination.
- The candidate must present 1-2 years of experience working under any CPA.
- In addition, Indian students can become eligible for the CPA examination if they have the following qualifications: MBA, Master in Commerce, Member of the Company Secretaries in India, Member of the Institute of Cost and Works Accountants of India, Member of the Institute of Chartered Accountants of India.
Fulfilling these guidelines makes you eligible to sit for the exam and earn the CPA certification.
How to Ensure Success in the CPA Exam?
Clearing the CPA exam requires extensive hard work and comprehension of all the necessary concepts of finance. One easy way that can help accelerate and make your preparation for the CPA exam effective is enrolling on a CPA professional course from IMS Proschool.
IMS ProSchool is a leading educational institution that helps students take globally recognised financial courses and clear their exams. IMS Proschool has a team of proficient teachers across the globe with huge experience in the financial sector that allows them to discern the intricacies of the CPA exam and prepare candidates for the best outcomes.