If you want a career in accountancy, there are several different potential exams you could take. You might be wondering what to opt for: is it best to go for the cheapest option? Are some credentials more prestigious than others?
Assuming you want to be an accountant and keep your options as wide open as possible, the “gold standard” is the CPA exam, which (if you pass it!) leads to you becoming a CPA.
What Exactly is a CPA?
As well as being the most popular certification in the accounting industry, a CPA license has some huge benefits:
- CPAs are the only accountants licensed by state governments. They’re allowed to write audit reports, for instance.
- If you’re resident in certain states, such as Texas, you can’t describe yourself as an “accountant” unless you’re a CPA.
- The CPA is widely known and respected – unlike some newer accounting and financial qualifications.
As a CPA, you could work for a huge company … or you could be an advisor to many small businesses or even individuals.
How Hard is the CPA Exam?
In order to take the CPA exam, you’ll need a minimum of a 4-year bachelor’s degree (and preferably a master’s degree too) in order to fulfill the 150 credit hours.
The CPA exam tests candidates on a wide range of knowledge. In fact, it’s split into four parts, covering:
- Auditing & Attestation (AUD)
- Financial Accounting & Reporting (FAR)
- Regulation (REG)
- Business Environment & Concepts (BEC)
You need to pass all four parts within 18 months of taking your first part. If you don’t, the parts that you’ve passed more than 18 months ago will become invalid.
So it’s definitely not easy (and you may want to develop some good stress management techniques)… but that’s one of the reasons why the CPA qualification is so valuable.
How Much Does the CPA Exam Cost?
While CPA exam costs vary from state to state, you can expect costs of:
- Application fee: $50 – $200
- Exam Fees: Around $200 per section = around $800 for all four sections
- Exam Registration Fees: Around $300 for all four sections
- Ethics Exam: $125 – $200 (not required in all states)
On top of this, you’ll need to pay for some sort of review course that covers all the material (and gives you the chance to practice the types of questions that’ll be on the exam papers), as there isn’t a textbook or syllabus that you can use to prepare for the exam.
There are lots of these review courses out there, with different strengths and weaknesses. Most of them will set you back somewhere between $1000 and $4000 – though a quick Google search will often allow you to find substantial discounts for the pricier courses.
What Other Exams Are Available?
Other exams you might want to look into include:
CFA – seen as the “gold standard” of finance and investment, the CFA is the exam you need to take if you want to be a Chartered Financial Analyst. If you want to go into finance or investment (e.g. as a fund manager) then the CFA is a more appropriate exam for you. It’s also much easier to take internationally.
ACCA – the UK’s equivalent of the CPA. You don’t need a bachelor’s degree, and you can download the syllabus and study guide from ACCA for free. If you’re not in the US, this could be a better option for you.
Ultimately, if you’re in the US and want to become an accountant, the CPA is definitely the best choice. It’s widely recognized and respected, and it’ll open up the most options for you.
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