If you’re a math whiz who’s in the market for consistent, stable work that can yield sizable paychecks and gain you entry to high-value and reputable companies in a wide range of industries, then accounting could prove a lucrative and satisfying career path.
While many entry-level accounting positions require only a bachelor’s degree or an associate’s degree, senior accountants and industry leaders also hold a Certified Public Accountant designation. These accountants, popularly known as CPAs, are in high demand and enjoy abundant job opportunities and schedule flexibility. But what do the day-to-day activities of a CPA really look like? Read on to find out.
What is a CPA?
A Certified Public Accountant is an accounting professional who passed the CPA exam and also met work experience requirements in order to obtain a license in their state. As with attorney licensure, CPAs must apply for and receive certifications on a state level, and if they relocate, they must undergo the licensing process again in their new state. CPAs benefit from the knowledge and experience implied by their licenses, and holding a certificate makes them highly competitive in the accounting job market.
What is a CPA’s role in an accounting firm and their typical job duties?
CPAs can hold a variety of positions within an accounting firm or a company with an accounting division. If an CPA is employed by an accounting firm or department, their duties will often include:
Performing audits and financial reviews for clients.
The CPA provides an objective perspective on financial documents provided by management and offers evaluations to give companies a sense of their money situation and the steps that they need to take to maintain fiscal health.
Preparing and filing tax documents.
Accounting firms often take on both individual clients and organizational clients during tax season, and an accountant with a CPA license can help a client sift through their financial information for the year, to find deductions, and to complete the necessary paperwork for annual filings.
Budgeting and providing financial management services.
If a company doesn’t have its own in-house accounting department, its leadership will frequently hire accounting consultants (CPAs) to draw up budget plans, to make recommendations for how to invest and allocate corporate assets, and to help organizations gear up for major fundraising pushes.
Representing a client in matters involving the Internal Revenue Service (IRS) or the Securities and Exchange Commission (SEC).
While accountants without CPAs can file tax returns, only a licensed CPA can liaise directly with the IRS or the SEC on their client’s behalf.
What type of an educational background does a CPA need?
The exact requirements of a CPA license vary from state to state. However, candidates across the United States need to earn a bachelor’s degree before sitting for the exam (although some states will allow soon-to-graduate college seniors to take a portion of the test while still enrolled in school). Prospective CPAs must major in accounting, business or a related field to qualify for the exam, and certain states also have specific course requirements for qualification. When applying to take the CPA exam, the state licensure board must sign off on your completion of the necessary educational criteria prior to test registration.
All CPA candidates must pass the Uniform CPA Examination, a standardized test that’s consistent across the entire United States. The 16-hour test includes four sections:
Auditing and Attestation (AUD)
Business Environment and Concepts (BEC)
Financial Accounting and Reporting (FAR)
Questions range from multiple-choice to essays and short answers, with the latter usually focused on real-life accounting scenarios relevant to the CPA exam’s final goal of producing qualified and fully-informed accountants.
What job opportunities are available to CPAs?
CPA certification may seem like a daunting pursuit, but achieving a passing score on this challenging exam will prove valuable when you’re on the job hunt as a licensed CPA. Also, because the average salary for a CPA in the United States now stands firmly in the six-figure range, with 4/5ths of the nation’s CPAs expecting a raise in the next year, this licensing process is a proven means of increasing your income potential.
So which specific jobs can a CPA perform? The possibilities are plentiful, including these well-compensated roles:
Public accounting firms (which perform functions like prepping tax materials and drafting budgets for companies and individuals) prefer to hire CPAs, particularly for senior-level positions. Public firms can range in size from tiny local operations to massive international conglomerates, giving CPAs plenty of options in terms of workplace preferences.
CPAs can ascend to C-level executive roles, especially within finance departments of sizable companies. Positions like Vice President of Finance, Chief Financial Officer, and Finance Director exist at for-profit and non-profit organizations, and CPAs in those roles hold major sway over the financial wellbeing of their companies, providing management and oversight on budgets, economic goals, and analyses.
CPAs with a strong understanding of computer programming and coding can parlay both skill sets into a role as an accounting software developer. Because 21st-century financial systems are heavily dependent on tech, these developers find themselves highly sought-after for their insight on the overlap between finance and program design.
A growing number of companies seek CPA-certified candidates for leadership roles in their compliance departments, like Compliance Managers. These employees oversee a company’s business practices to ensure that all departments conduct themselves in legal and ethical manners while still pursuing high standards of efficiency and profitability. The know-how required to obtain a CPA license serves Compliance Officers and Managers well, as CPAs must educate themselves on business ethics and maintain a strong basis of knowledge on that subject.
How many CPAs are women and minorities?
Currently, CPAs are overwhelmingly male and white, especially in leadership positions. Only 22% of partners in CPA firms are women, and only 5% count as minorities. But many companies and associations have a vested interest in changing this statistic and actively seeking out opportunities for more racial and gender diversity. AccountingWeb recently published suggestions for boosting diversity in the accounting hiring process, which include recruiting students from undergrad accounting programs and urging them to take the CPA exam, establishing mentorship programs geared toward underrepresented groups, and prioritizing the hiring of women and minority candidates as the older (predominantly white and male) workforce retires.