Pathways to CPA?

Effective January 1, 2014, there will only be one pathway towards CPA license in California.

•Baccalaureate degree

•24 semester units in accounting-related subjects

•24 semester units in business-related subjects

•150 total semester units of education

•Passage of Uniform CPA Examination

•Passage of Professional Ethics Exam for CPAs (PETH)

•One year of general accounting experience

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Requirements

1st E: Education Requirements

1.A baccalaureate degree, or foreign equivalency.

+ Degree does not have to be accounting.

+ Degree must be from accredited college or university.

+ Foreign applicants must have transcripts evaluated by a CBA-approved foreign credentials evaluation service.
+ Official transcripts are required when applying to sit for Uniform CPA Exam.

2.24 semester units (36 quarter units) in accounting-related subjects.

3.24 semester units (36 quarter units) in business-related subjects. 
The above-specified units can be obtained as part of the baccalaureate degree.

Candidates that did not fulfill the above-specified units of education in their baccalaureate degrees can take additional college-level courses after graduation.

**  NEW - starting January 1, 2014  **

4.150 semester units (225 quarter units) of education
Normally, a baccalaureate degree comprises a minimum of 120 semester units.

The new requirement raises the number education units to 150 semester units.

Additional 30 semester units required beyond baccalaureate degree.

New “150 Semester Units” Requirement

Additional 30 semester units prescribed as follows:

1.20 semester units in accounting.

2.10 semester units in ethics study.

The 30 semester units are additional units needed for CPA license, not to sit for the CPA exam.

20 Semester Units in Accounting

Minimum 6 semester units in accounting

Maximum 14 semester units in business-related subjects.

Maximum 9 semester units in other academic subjects relevant to accounting and business:

+ Maximum 3 units in skills-based courses: English, communications, journalism, physical, life, natural, and social sciences
+ Maximum 3 units in foreign languages/cultural and ethnic studies, including sign language

+ Maximum 3 units in industry-based courses: i.e. engineering, architecture, real estate

+ Maximum 4 semester units can be fulfilled in internships, independent studies in accounting, or independent studies in business-related subjects

=> A Masters of Accounting, Masters of Taxation, or a Masters of Laws in Taxation (LL.M.) satisfies the 20-semester units in accounting requirement.

10 Semester Units in Ethics

• Maximum of 10 semester units or 15 quarter units in courses with the following terms in the course title:

+ Auditing

+ Business leadership, corporate governance, ethics, human resources management, management of organizations, organizational behavior

+ Business, government, and society

+ Business law, corporate social responsibility, fraud, legal environment of business, morals, professional responsibilities

• Maximum of 3 semester units or 4 quarter units in the following disciplines:

+ Philosophy, religion, theology

+ Course title must contain one of the following terms: “introduction,” introductory,” “general,” “principles of,” “fundamentals of,” “foundations of,” or “survey of.”

+ If not, course title is the name of the discipline.

• Maximum 1 semester unit in a course solely devoted to financial statement auditing.

Ethics Requirements Beginning in 2017

• Minimum 3 semester or 4 quarter units in accounting ethics or accountants’ professional responsibilities, effective January 1, 2017.

+ Course must be upper division, unless taken at a community college

• Maximum 7 semester units or 11 quarter units in the following subjects:

+ Auditing, business leadership, corporate governance, ethics, human resources management, management of organizations, organizational behavior, business, government, and society, business law, corporate social responsibility, fraud, legal environment of business, morals, professional responsibilities

2nd E: Examination

UNIFORM CPA EXAMINATION

•Same test across all 50 states and 5 territories (District of Columbia, Puerto Rico, U.S. Virgin Islands, Guam, and Commonwealth of Mariana Islands)

•Developed by the AICPA

•Administered by the NASBA

•Offered in English only

•Offered at authorized test centers

•Testing window: 5 to 6 days per week in January, February, April, May, July, August, October, November (not available in March, June, September, and December.)

•Computer-based test format

•Adaptive testing

•Must complete education requirements (1st E) to be eligible to sit for exam

•Fees

•initial, re-application, and individual sections

•Forms of identification required at exam time

4 Sections of the Uniform CPA Exam

1.Auditing and Attestation (AUD) – 4.5 hours 

2.Business Environment and Concepts (BEC) – 2.5 hours

3.Financial Accounting and Reporting (FAR) – 4 hours

4.Regulation (REG) – 3 hours

•70% multiple choice, 30% case studies and written communication

•Passing score is 75 on a 0-99 scale.

•Can take any section or all 4 sections at once.

•Once a candidate passes one section, he/she has 18 months to pass the other 3 sections.

3rd E: Experience

1.Pathway 1 (expires 12/31/2013): One year of general accounting experience supervised by a licensed active CPA.

2.Pathway 2: Two years of general accounting experience supervised by a licensed active CPA.

+ Candidate can acquire experience through a public accounting “audit” firm, a private industry firm under the supervision of an licensed active CPA, or an individual CPA sole practitioner who has a current and active license.

+ Audit hours no longer a requirement.

Optional 500 Audit Hours

+ For those that want the authority to sign attestation reports, 500 audit hours is still required.

+ Traditionally, the path to CPA licensure required each candidate to log in 500 audit hours performing audit  and attestation work at an audit firm. These aspiring CPAs examine, test, and verify client financial records as part of the audit process, thus “paying their dues.”

+ Thus, every CPA candidate that was granted a license at the time was authorized to sign attestations.

+ Now, CPA candidates have the opportunity to earn a license without doing audit work.

+ However, obtaining audit experience is very much a useful and coveted skill and will certainly boost a CPA’s marketability.

2014: The Year of Change

—Sunsets Pathway 1.

—Establishes Pathway 2 as the way to CPA licensure in California (SB 819), with the following amendments:

+ —Total 150 semester units of education (additional 30 units beyond minimum baccalaureate degree requirements)

+ —Additional 30 semester units to be 20 semester units in accounting and 10 units in ethics.

—Grants mobility to California CPAs to practice in other states.

—CPAs licensed prior to 2014 are grandfathered.

Licensure Process

—Fulfill the education requirements to become eligible to sit for the Uniform CPA Exam.

—Pass all 4 parts of the Uniform CPA Exam.

—Pass the California Professional Ethics Exam.

—Obtain the general accounting work experience.

—Complete the CPA application for licensure.

• Documentation: application, transcripts, evidence of work experience, Live Scan fingerprints, fees, etc.

—

In general, it takes 10 to 12 weeks to process a complete application.

Maintaining the License

+ Must renew license every 2 years.

+ Renewal requirements:

1.License renewal fee

2.80 hours of Continuing Professional Education (CPE) every renewal period

• 4 hours of ethics education as part of the 80 hours
• Additional CPE requirements for licensees practicing in audit, governmental auditing, and fraud accounting (still part of the 80 hours)

3.A 2-hour regulatory review course every 6 years

+CPE types can be computer-based, web-based, classroom, or independent self-study.

Converting units

The California Board of Accountancy (CBA) expresses education requirements in semester units.

—To convert semester units into quarter units, multiply by 3/2.

—i.e. 24 semester units x 3/2 = 36 quarter units

—To convert quarter units into semester units, multiply by 2/3.

i.e. 225 quarter units x 2/3 = 150 semester units

Permitted Accounting Subjects

• Accounting
• Financial reporting
• Auditing
• Financial statement analysis
• Taxation
• External and internal reporting
• Business administration
• Economics
• Marketing
• Computer Science and Information Services
• Business management
• Finance
• Statistics
• Business-related law courses at an accredited law school
• Business communications
• Business law
• Mathematics
• Any accounting courses in excess of the 24 units needed to fulfill the accounting requirement

Let’s Review

CPA licensure requirements differ by state/jurisdiction. Here in California: 

CPA licensure requirements differ by state/jurisdiction. Here in California:

Tips

—Take it one “E”at a time!

—Shop around for the cheapest options to fulfill the education units

=>>>> —community colleges very cost-beneficial way to fulfill education units

—Take a CPA review course to help you pass the Uniform CPA Exam

—Gain in required accounting work experience through employment under proper supervision

—Understand your state/jurisdiction’s requirements

—Complete the application process.

Accounting Organizations

•American Institute of Certified Public Accountants (AICPA)

•California Society of CPAs

Other Accounting Certifications

•Certified Management Accountant (CMA)

•Chartered Financial Analyst (CFA)

•Certified Financial Planner (CFP)

•Certified Fraud Examiner (CFE)

•Certified Internal Auditor (CIA)

Resources

•NASBA: http://www.nasba.org/

•California Board of Accountancy: http://www.dca.ca.gov/cba/

•AICPA for CPA candidates: http://www.aicpa.org/Becoming+a+CPA/CPA+Candidates+and+Students/

•California Society of CPAs: http://www.calcpa.org/Content/licensure/requirements.aspx

•This Way to CPA: https://www.thiswaytocpa.com/exam-licensure/

•Start Here Go Places: http://www.startheregoplaces.com/