What is a CPA? Prepare for Changes Coming to the Exam in 2024

From small local businesses and government agencies to large corporations, many organizations rely on the expert knowledge of Certified Public Accountants (CPAs) to make sound financial decisions. So what is a CPA?

A certified public accountant is a financial professional with valuable education and experience. CPAs must pass a certification exam and be licensed by their state to earn their designation. CPAs prepare and examine financial records, assess financial operations and ensure taxes are paid accurately.

As technology advances and the way businesses manage their money changes, the role of CPAs is also shifting. In many organizations, CPAs are taking on more strategic roles and need additional skills to be successful in the field.

“Accountants are data storytellers,” said Dr. Jennifer Teague, executive director of business programs at Southern New Hampshire University (SNHU). “In today’s work environment, they utilize technology to expedite manual processes, improve accuracy, perform research and analyze financial data. These skills serve to help accountants communicate with stakeholders about a company’s financial health.”

Becoming a CPA can help you take your career to the next level in the public accounting field and prepare you for important duties in companies big or small. Before starting this pursuit, it’s important to understand what a CPA does and how to become one.

What Does a CPA Do?

Public accountants are in demand across many industries. As a CPA, your day-to-day tasks could vary depending on your professional interests and where you work.

According to the U.S. Bureau of Labor Statistics (BLS), accountants not only review and prepare financial documents but also pull meaning from the numbers and explain their findings to stakeholders. These findings may be used to identify financial opportunities, manage risks or make important business decisions.

What are the Duties and Responsibilities of a CPA?

Certified public accountants work with financial documents that organizations are required by law to complete. These include tax forms and a business’ annual and quarterly financial disclosures.

According to BLS, CPAs may also be responsible for:

• Assessing financial operations
• Inspecting accounting systems for efficiency
• Maintaining financial records
• Preparing tax returns
• Reviewing financial statements for accuracy
• Suggesting ways to reduce costs and boost profits

As the accounting profession changes, CPAs must also leverage communication, technology, data analysis and research skills to take on more strategic roles for the institutions and individuals they support, said Ann McLaughlin, an associate dean of accounting programs at SNHU.

The way CPAs are tested and certified is also changing. A new CPA exam, the CPA Evolution Exam, is launching in 2024. The new exam will continue to test your knowledge of essential accounting and auditing practices. But before sitting the exam, you’ll also choose 1 of 3 new areas of specialization in which to be tested:

• Business analysis and reporting
• Information systems and controls
• Tax compliance and planning

McLaughlin said these changes are occurring because “the industry requires accountants to have a strong core foundation in accounting, auditing and taxes while adding technology for reporting and decision-making.”

What is the Difference Between CPA and Accountant?

All CPAs are accountants, but not all accountants are CPAs, said Mona Stephens, accounting faculty lead at SNHU. The main difference between the two professions is that CPAs have a standard educational path and are tested to certify their knowledge in key areas of the field.

By passing the CPA exam, you can demonstrate to potential employers and clients that you have the expertise and skills needed to have a profound impact on their financial health.

How to Become a CPA

Becoming a CPA requires specific education and training, as well as passing a certification exam. The CPA exam is standard nationwide. But CPAs are licensed by their state, which can have their own unique requirements.

No matter which state you’ll be working in, however, the first step toward becoming a CPA is completing your accounting education.

Earn An Accounting Degree

To build the skills necessary to qualify for the CPA exam, in most states, 150 credit hours of relevant education is required, according to the American Institution of Certified Public Accountants (AICPA).

CPA training typically begins with a Bachelor of Science (BS) in Accounting or a business administration degree with an accounting concentration. With either degree, you can gain key business knowledge and learn how to:

• Complete the accounting cycle
• Conduct research and analysis to assess financial information
• Create budgets
• Identify and correct financial reporting issues
• Prepare complex financial statements

According to McLaughlin, a typical bachelor’s degree includes 120 semester hours of training. This leaves another 30 hours of training before you can sit for the CPA exam.

Advancing your education with graduate-level courses is a great way to build specialized skills while preparing for the exam, she said.

Seek Advanced Training

Some aspiring CPAs will complete their required training hours by earning a master’s degree in accounting. An accounting master’s degree can help you advance your knowledge of accounting principles and build better analytical and research skills.

If you're interested in a master's in accounting, find out if they're worth it.

Graduate-level certificate programs are another training option that can be completed faster than a traditional master’s degree program. Certificates can help you build targeted, in-demand skills for the evolving accounting workforce and prepare you to seek a CPA designation.

“Certificates offer more specialized topics and a shorter time to completion, which matters to those who are already working in the profession and have to upskill or reskill to take the next step in their career,” said Teague.

If you’re considering graduate-level accounting training, look for programs that specifically align with the knowledge you’ll need for CPA licensure. At SNHU, for example, three graduate certificates align with the areas of study that can be tested in the new CPA exam.

These include:

• Business Analysis and Reporting for Accounting: With a certificate in analysis and reporting, you can build skills in forecasting, internal controls, strategic planning, data analysis and visualization and statistical modeling.
• Information Systems and Controls: This certificate can help you gain skills including auditing, business operations, information systems, risk assessment and management and system integration and analysis.
• Tax Compliance and Planning: With this certificate, you can advance your knowledge in the IRS audit process and tax legislation and explore tax planning, preparation and returns, tax law, financial management, strategic planning and data visualization.

Take the CPA Exam

The next step toward gaining your CPA license is to take and pass the CPA exam. You can apply for the exam through the National Association of State Boards of Accountancy (NASBA). Once your application is approved, you can schedule your exam.

How hard is the CPA exam? According to AICPA, pass rates for each portion ranged from 45% to 60% in 2022.

The new exam, launching in 2024, will ensure candidates have the knowledge they need for the changing field of public accounting.

“The new CPA exam will require students to understand how to perform data analysis and research, which shifts the narrative of the traditional accounting role,” said McLaughlin.

Obtain A CPA License

While passing the CPA exam certifies your accounting knowledge, you still have to be licensed by your state before you can practice as a CPA.

Many states require that candidates have at least one year of professional accounting experience before being licensed, according to AICPA. Continuing education credits may also be required to retain your CPA license year after year.

What Is a CPA Career Really Like?

With a CPA license, there are many opportunities for career growth. You could work for a large corporation to explore the tax advantages of certain business decisions. Or, you could advise a small business owner on personal financial matters. You could be employed by the government or start your own business.

According to BLS, some of the jobs available to accounting professionals like CPAs include:

• Accountant
• Auditor
• Budget analyst
• Financial manager
• Forensic accountant
• Revenue agent
• Tax preparer

As the accounting field continues to change, career opportunities are on the rise. According to BLS, roles typically held by CPAs are expected to grow over the coming years.

Jobs for accountants and auditors are projected to grow 6% between 2021 and 2031. Accountants and auditors earned a median annual salary of $77,250 in 2021. Jobs for financial managers are projected to grow 17% over the same time period. Financial managers earned a median salary of $131,710 the same year.

Is a CPA Actually Worth It?

Becoming a licensed CPA is one of the best ways to progress your accounting career. CPA licensure demonstrates that you've acquired the must-have knowledge, skills and experience to take on advanced roles in the accounting profession.

If you’re ready to start or grow your career as an accountant, becoming a CPA can give you a big professional boost.

“Due to the testing and ethics requirements, the CPA certification represents a high level of accounting expertise and ethics,” said Stephens. “It shows employers and clients a dedication to the accounting profession and to the people the profession serves."

Education can change your life. Find the SNHU online CPA graduate certificate that can best help you meet your goals.

Danielle Gagnon is a freelance writer focused on higher education. Connect with her on LinkedIn.