If you want to become an accountant, one of the most important things you can do is take that final step towards certification and become a CPA (Certified Public Accountant). According to the American Institute of CPAs (AICPA), entry-level CPAs earn 10-15% more than non-CPAs. Over the course of their careers this disparity can grow as high as 41%. But becoming a CPA is challenging, both academically and financially. How much does it cost? In every jurisdiction, the road to your CPA includes the three Es: education, experience and examination. And, in at least two of those areas (education and examination), there will be significant costs.
Each state has slightly different licensure requirements, so the first step is to review your state requirements carefully as they will vary. However, in most states, CPA applicants are required to have 150 academic hours in accounting, business and general education.
Whatever your state’s requirements, you have three basic choices: 1) Obtain an undergraduate degree with a major in accounting. Again, pay careful attention to your state’s requirements so you will satisfy all of the academic requirements by graduation; 2) Complete an undergraduate degree and obtain either a master’s in accounting or an MBA with a concentration in accounting; or 3) Select a five year degree program that offers an accelerated track towards a master’s degree in accounting.
All states will require that you have some form of experience in the field. More than half of the states have adopted the Uniform Accountancy Act (UAA), which requires that you work for at least a year under the license of a CPA.
Last but not least is the CPA exam, which is no small hurdle. The test consists of four parts and in 2013 the average passing rate for each section ranged between 47-55%. Although you may retake a section if your score is low, you must pass all four sections within 18 months or you must start over. Each time you test, you will have to reapply, paying both an application and a test fee. Each section has a separate fee, so the more sections you take, the higher the fees. Although fees differ according to jurisdiction, on average if you schedule all four sections at once, you can expect to pay at least $1,000. If you must retake a section, you can expect to pay about $200 per section plus a $150 application fee (more if you test in additional sections).
There is a separate ethics examination, which usually costs about $150.
Obviously, this is a challenging examination and you will want to prepare for it carefully. Some applicants use a self-study package, with average costs of about $1,300. If you prefer a face-to-face tutorial, these programs average $3,000. It’s helpful to check with your employer about these costs, because some will help offset the fees.
Once you’ve passed the exam, you have one final fee associated with your CPA application: a license fee which averages $150.
Is it worth it?
Although the CPA is a challenging road, the rewards are plentiful. Few things speak as effectively about your credentials, your knowledge, and your ability to get the job done as a CPA. Not only will businesses see you as an expert, but among your peers you will command respect. So, if you’re interested in long-term job security and excellent financial remunerations, consider the CPA.