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Certified Public Accountant (CPA) Definition & Overview

Updated: February 6, 2023

The accounting profession is a difficult one. 

There are so many accounting organizations and accounting programs to choose from. The entire accounting curriculum is tricky to learn. And the overall accounting theory and practice is a complex task. 

Certified public accountants are some of the most esteemed accountants around. Read on as we take a closer look at what a CPA is.

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    • A certified public accountant (CPA) is a licensed accounting professional in the accounting industry. They must have a bachelor’s degree plus additional industry education totaling 150 hours.
    • CPAs must meet the public accounting experience requirement of two years. They must also pass an accounting principles exam outlined by the AICPA. 
    • The CPA designation may come to mind when you think of professional accountants that file taxes. CPAs also pursue executive careers. They often work as internal controllers or chief financial officers (CFO). 

    What Is a Certified Public Accountant (CPA)?

    A certified public accountant (CPA) is an accounting professional with a particular type of license in the accounting industry. Each state has a Board of Accountancy that issues licenses to qualified candidates. CPAs earn their license through The American Institute of Certified Public Accountants (AICPA). This organization ensures that there is a nationally accepted professional standard for all CPAs. Other countries around the world have similar accounting designations. One of the most comparable is the chartered accountant (CA) designation.  

    In some states, unlicensed accountants or accountants with expired licenses are allowed to work as public accountants. They can still work but have the same applicable standards. But most of the time they still have to be supervised by a certified public accountant.

    In Canada, the term CPA stands for a chartered professional accountant. 

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    What Does a CPA Do?

    A CPA generally works in the accounting profession. No matter what their role is, they oversee accounting services in some capacity. Responsibilities may include:

    • Creating and maintaining financial statements
    • Attestation services
    • Forecasting business revenue
    • Informing strategic business decisions
    • Performing and signing off on audits
    • Preparing and filing income tax
    • Financial accounting and reporting 
    • Financial planning
    • Managing accounting teams

    Working in the accounting industry for a private company does not require a CPA designation. However, working for a public accounting firm does require a CPA designation. Public accounting firms only hire those who meet licensing requirements. This is because as a public CPA you are handling the taxes and finances of individuals and businesses. Any accountant is required to meet the legal requirements of whatever state they are hoping to practice in. 

    Certified Public Accountant (CPA) Ethics

    Certified public accountants must follow the code of ethics outlined by the APCIA. When you work as a CPA, you agree to follow these accounting standards. If not, the penalties are harsh for breaching the outlined moral standards. There are states and federal laws, too. They require CPAs to remain independent and unbiased during audits and financial reviews. They must have the highest auditing standards and precise financial reporting skills.

    The Enron scandal is a great example of what happens to CPAs who don’t follow the code of ethics. Those involved in the scandal worked at Arthur Andersen. They performed both auditing and consulting services at the same time. Arthur Andersen was once a top firm in the U.S., but fell following the scandal. The CPAs that broke laws and breached the APCIA code of ethics faced legal consequences.

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    Requirements to Become a Certified Public Accountant (CPA)

    CPA accounting candidates must meet the following criteria:

    • Bachelor’s degree in finance, accounting, or business administration
    • They must have passed the 150 hours rule of related education
    • Two years of experience in the accounting field
    • Take and pass the Uniform CPA Exam 1
    • Apply for the CPA license through their state

    The CPA exam covers topics like:

    • Accounting theory
    • Accounting method
    • Attestation services
    • Procedures of accounting
    • Professional ethics
    • Unethical accounting practices

    Career Opportunities for CPAs

    Earning a CPA license opens the door to many career choices, including:

    • Working for CPA firms
    • Corporate accounting
    • Auditing services
    • Government services
    • Executive positions like CFO or controller


    A certified public accountant (CPA) is a licensed professional accountant. CPAs must pass an AICPA exam. They must also have a bachelor’s degree and complete continuing education courses. CPAs work in a variety of accounting fields and must follow a strict code of ethics and have stringent auditing standards. As well as have a strict approach to regulation. 

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    Frequently Asked Questions About CPAs

    What Is the Difference Between a CPA and an Accountant?

    An accountant has the appropriate bachelor’s degree and can work for private companies. A CPA has additional education and deeper knowledge. They have to pass a CPA exam, and take additional college-level accounting courses. Public firms only hire CPAs for certain roles. 

    Do CPAs Have Continuing Education?

    Yes. Once a person becomes a CPA, the work is not over, there is still an education requirement. CPAs must earn continuing education credit hours annually to maintain their license. This can be in person or via online courses. Otherwise, they cannot continue to use their CPA license to provide accounting and tax-related services.

    Is a CPA the Same as a CA?

    No, although the designations are similar, CPA is a designation for United States citizens, whereas CA is a globally recognized designation. Both have similar requirements. There are some differences in the governing board, education standards, and testing requirements.

    Is Being a CPA Hard?

    Becoming a CPA is a complex task. There is only a 50% pass rate for the CPA exam for CPA candidates. This means that only half of the people who sit for the exam pass the test to become certified public accountants. Experts consider it one of the hardest professional exams to pass.


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