A Certified Public Accountant (CPA) is a designation granted to accounting professionals who meet rigorous educational, examination, and experience requirements. The CPA license represents a high level of technical competency and is the only designation that legally permits a person to perform certain functions, such as issuing an audit opinion on a company’s financial statements. The answer to whether a degree is required is unequivocally yes, as a specific level of college education is mandatory for licensure. The pathway to becoming a CPA is governed by the individual State Boards of Accountancy, meaning that the precise requirements can vary significantly depending on the jurisdiction where a candidate seeks to practice.
The Foundational Degree Requirement
The initial educational step toward CPA licensure requires obtaining a bachelor’s degree from an accredited college or university. Although an accounting major is the most common and direct path, the degree does not always have to be in accounting itself; many states accept a degree in a related business field, such as finance or business administration. The acceptance of a non-accounting degree is contingent upon the candidate completing a specified minimum number of accounting-specific credit hours. The bachelor’s degree typically accounts for approximately 120 semester hours of college education.
Understanding the 150-Credit-Hour Rule
Although a bachelor’s degree generally requires 120 semester hours, the standard requirement for CPA licensure across most jurisdictions is a total of 150 semester hours of college education. This additional 30 credit hours is designed to provide greater depth in accounting and business subjects, reflecting the increasing complexity of the profession. The 150-hour rule ensures that CPAs are well-rounded professionals with advanced knowledge beyond a typical undergraduate curriculum.
Candidates typically fulfill the extra 30 credit hours through a few common methods. The most traditional approach involves pursuing a Master’s degree, such as a Master of Science in Accounting (MSA) or a Master of Business Administration (MBA) with an accounting concentration. Alternatively, a candidate may complete a post-baccalaureate certificate program or simply take extra undergraduate or community college courses to bridge the 120-hour gap. Many universities offer integrated five-year programs that combine the bachelor’s and master’s degrees to meet the 150-hour requirement seamlessly.
The 150-hour requirement is for the issuance of the license, not necessarily for sitting for the examination. Many states permit candidates to sit for the Uniform CPA Examination once they have completed the initial 120-hour bachelor’s degree and the required coursework. Some states are also exploring new pathways that allow a bachelor’s degree (120 hours) coupled with two years of professional experience as an alternative to the 150-hour education requirement.
Required Coursework and Specific Subject Credits
Simply accumulating 150 credit hours is insufficient; candidates must also demonstrate a specific concentration of coursework to qualify for licensure. State Boards of Accountancy mandate a minimum number of upper-level accounting credits and general business credits.
The required accounting credits generally focus on upper-division courses, often totaling between 24 and 36 semester hours. These typically must include dedicated courses in Auditing and Attestation, Financial Accounting and Reporting, Cost or Managerial Accounting, and Taxation.
Candidates must also complete a set number of general business credits, usually ranging from 24 to 39 semester hours. Acceptable business subjects often include Economics, Business Law, Finance, Business Statistics, and Management. The State Board of Accountancy reviews transcripts to ensure all specific subject and hour requirements are met before approving a candidate for the exam or license.
Gaining the Mandatory Work Experience
After satisfying the educational components, candidates must gain practical experience to complete the licensure process. Most jurisdictions require one to two years of relevant accounting experience, which translates to a range of 1,000 to 2,000 hours of professional work. This hands-on experience ensures that the candidate can apply theoretical knowledge to real-world accounting scenarios.
The work must be in a qualifying area of accounting, which includes public accounting, private industry accounting, or government accounting. The experience must be verified and supervised by an actively licensed CPA. This supervising CPA must attest to the candidate’s competence in areas like financial statement preparation, auditing, or tax work.
The timing of this experience varies by state, with some allowing the experience to be obtained before or concurrently with the CPA exam, while others require it to be completed after passing the exam. The specific duties that qualify as relevant experience are often detailed by the State Board, placing emphasis on tasks that require professional-level analysis and decision-making.
Conquering the Uniform CPA Examination
The Uniform CPA Examination is a four-section, national standardized test that all candidates must pass to become licensed. The American Institute of Certified Public Accountants (AICPA) develops the exam, and it is administered by the National Association of State Boards of Accountancy (NASBA).
The four core sections of the exam are Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), Regulation (REG), and Business Environment and Concepts (BEC). Candidates must pass all four sections within a specified rolling window, which traditionally has been 18 months from the date of passing the first section. If a candidate fails to pass the remaining sections within that timeframe, credit for the earliest passed section expires, and it must be retaken.
Recent changes to the Model Rules are transitioning the conditional credit period from 18 months to 30 months, though individual states must adopt this change.
Maintaining Your CPA License
To maintain an active license, CPAs are required to meet Continuing Professional Education (CPE) requirements. These requirements ensure that practitioners remain current with changes in accounting standards, tax law, and regulatory environments. The CPE mandate typically requires CPAs to complete an average of 40 hours of qualifying education annually, often structured as 80 hours over a two-year renewal period. A portion of these hours must be dedicated to specific subjects, such as an ethics course, which may include state-specific laws, rules, and policies. Licenses must be renewed periodically, and failure to complete the required CPE hours can result in the license lapsing or being converted to an inactive status.