In this article you will learn:
- What skills and education you need to become a CPA (certified public accountant)
- The typical career path of a CPA
- The average salary of a CPA
- CPA jobs that are available now
A certified public accountant (CPA) is an accounting professional who handles a range of financial duties including tax preparation, auditing, and financial reporting. Thou there are numerous directions that a CPA’s job can take, they most often manage financial and tax documentation for businesses and individuals.
What does a CPA do?
Exactly what a CPA does each day will depend on where they choose to work and what area of accounting they specialize in. But no matter where they work, these professionals manage the essential financial aspects of both business and personal finances.
CPAs are often responsible for preparing and filing business and personal taxes — state, local, sales, federal, or otherwise. They have a thorough understanding of how taxes work, so they give financial advice, answer tax questions, and help guide entities and individuals through complicated tax filing processes.
CPAs can also perform tasks related to forensic or investigative accounting, internal and external financial audits, tax analysis, and financial planning for businesses and individuals. They analyze financial documents, create organizational systems, manage data reports, and work through various financial issues.
Although most accounting professionals will work full-time, longer hours are often required of CPAs during tax season.
How do you become a CPA?
In the accounting industry, not every practicing accountant is a CPA, but any accountant who files a report with the Securities and Exchange Commission (SEC) must be licensed as a CPA.
Licenses for CPAs are administered by each state’s Board of Accountancy, which requires that a person pass a national, four-part Uniform CPA Examination from the American Institute of Certified Public Accountants (AICPA) and meet individual state requirements.
To be eligible for CPA licensure in any state, 150 hours of college coursework is required, which is 30 hours more than most bachelor’s degree programs. Some states also accept partial credit for relevant work experience in lieu of coursework.
Although it is not required, many CPAs obtain a master’s degree in a field such as accounting, finance, or business prior to taking their licensing exam. Some universities offer 5-year bachelor’s and master’s combination programs for individuals on track to become a CPA. Prior to entering the workforce, CPAs will often also gain hands-on experience through internships within accounting firms and other businesses.
After becoming licensed, CPAs can obtain specialty credentials by completing additional education, training, and passing additional exams through the AICPA.
What skills do you need to become a CPA?
The work of a CPA focuses primarily on finances, so an intimate understanding of mathematics is necessary for success. CPAs also need to be well-versed in tax law in order to prepare and file taxes and complete audits. These complicated subjects require the ability to focus for long periods of time and retain large amounts of complex information.
Depending on where a CPA is employed, they may work with multiple clients, which means they should have the ability to multitask and manage multiple projects at once. A CPA will also need to be able to clearly communicate about complex issues with their coworkers, clients, and superiors.
What is the average salary for a CPA?
In 2019, the median annual salary for a CPA was $71,550, according to the United States Bureau of Labor Statistics (BLS).
However, the earning potential of a CPA is actually much higher than the reported average salary because salaries for CPAs vary greatly based on experience and job responsibilities. In 2019, the BLS reported that the lowest-paid 10% of accounting professionals earned $44,480 or less annually, while the highest-paid 10% earned more than $124,450 annually.
An entry-level CPA will earn far less than their experienced counterparts who have risen through the ranks to achieve a higher salary. For example, CPAs who become financial managers or finance analysts for a major corporation may earn upwards of $200,000, per the BLS.
CPAs who then work their way into an executive position within a company have the potential to reach salaries of even greater amounts.
What is the typical career path for a CPA?
CPAs can find work within just about any industry. From healthcare to technology, manufacturing, legal services, government operations, and more, most companies need certified accounting professionals to manage their financials.
Where a CPA chooses to practice will depend on their interests and specialties. For example, a CPA that specializes in industrial tax law may choose to work in the petrochemical industry, managing financials for a major oil and gas company.
Alternatively, a CPA could choose to work at an accounting firm where they work with multiple clients across various industries. In this scenario, CPAs often work collaboratively with one another to manage and file taxes for their clients.
CPAs in independent practice often work with individuals or small businesses to help manage their bookkeeping, file their taxes, and answer financial questions. While they play an integral role in financial management for their clients, these CPAs do not work directly for their clients or for a firm, but rather own their own business and operate independently.
Where can you find CPA jobs?
The BLS reports that while there are approximately 125,700 job openings for accountants each year in the U.S., employment is competitive within prestigious accounting firms and major businesses.
Take a look at some of the current job openings for CPAs below:
Accounting Manager, CPA at Ensign Group – San Juan Capistrano, CA
Accounting & Auditing CPA Editor at Thompson Reuters – Ann Arbor, MI
Sr. Tax & Wealth Planning Specialist, CPA at Vanguard Group – Charlotte, NC
Tax Manager at Prager Metis CPAs – Bronx, NY