Do Letters Make the Name? The Benefits of becoming a CPA in a Global Market
Pros and Cons
As I sit in my campus library and type this article many things wiz through my brain; what am I doing this weekend? Should I be prioritizing studying over this? What time does the library actually close? All these amongst many other menial things fail in comparison to the elephant in the room, will I pass the CPA exam? The CPA examination consist of four part examination comprising of the key areas of accounting; auditing, business environment, financial accounting and regulation. Participants must score a minimum of 75 points in order to pass each section. Once the first section is passed, the participate has eighteen months to pass the other three portions or all progress is erased and they must begin again. The requirements to sit for this examination vary from state to state but in most candidates need at least 150 credit hours and a bachelor’s degree with a concentration in accounting. As a consequence most accounting majors to double major in areas like finance, economics, or business management in order to meet the required credit hours. With only a 50% pass rate this seems like a lot of time and effort to put towards the CPA exam; so the question is, is it all worth it?
We will look examine the benefits from multiple scenarios. Let’s first look at this from the perspective of a newly graduated college student. Let’s also assume the worst case scenario, he is unemployed, did not receive any internship offers while in school and he is looking to improve his resume. Although the accounting field overall will grow 13% between the years 2012 and 2022 according to the United States Department of Labor; his best bet is to try his luck with the CPA exam. Becoming a CPA opens the most doors as an accountant graduate in terms of job opportunities. A non-CPA is limited to very basic accounting positions such as book keeping, maintain general accounts or busy work for tax-related matters. A CPA on the other hand can get a job in a plethora of positions such as auditor, partner or even CFO. Now obviously our newly graduated friend isn’t going to make it to CFO any time soon but without a CPA he will never have the opportunity. Based on just this it is clear that it is to his benefit to sit make an attempt at the CPA exam.
Now let’s look at it from the perspective of an entry level accountant employee who is trying to further her career. Would it be worth it for her to take the CPA exam or should she look the climb the corporate latter another way? While it is difficult many accountants take the exam while working a full time job, most likely obtained through an internship. This means she isn’t forced to quit her current position to pursue another one. On the contrary many companies will help or fully pay for the review courses that are vital to passing the exam. Another benefit to her pursuing this goal is the great pay increase that comes with becoming a CPA. According to Becker, which is a leading CPA review course provider, on average CPAs earn over one million dollars more than non-CPAs over their career. She would also hit her head on the glass ceiling that blocks non-CPAs from climbing pass a certain point in the accounting field. CPAs receive promotions far quicker than non-CPAs. With all this said it is clear that an entry level employee who is looking to further their career should invest in the CPA exam.
The last perspective we will look at someone in a different business industry besides accounting. As mentioned in the introduction just a concertation in accounting is needed, a candidate does not have to major in accounting in order to sit for the CPA exam. As long as the candidate has at least a bachelor’s degree and 150 credit hours they may sit for the exam. An instance of this happening is a finance major who minored in accounting then went onto graduate school to receive their masters in finance and consequently accumulated the necessary credit hours to sit for the CPA exam. What benefit is it to a finance major to put CPA exam? For one it will help them be more recognized and trusted in the business industry. It will also introduce them to accounting methods and approaches that they may not have been exposed to while in school. But there are better letters to put behind a finance majors name. The CFA exam would prove to be much more beneficial in further their career in finance. This, for all intents and purposes is the finance version of the CPA exam. It will help in very similar ways, better job opportunities, pay, and promotion time. So for a professional outside of the accounting field it is most likely not worth it to take the CPA exam.
In conclusion the CPA exam is not for everyone but it is vitally important to those looking to go far in the accounting field. These letters are the beginning of your career as an accountant and will pay back in spades for all the blood, sweat and tears shed in order to achieve it. I will start my journey to achieve my CPA in roughly a year and a half. I will hide away for six months and obsess over the test. I will then emerge victorious, letters in hand and a bright future ahead of me. I encourage all accounting majors and professionals to do the same, you have so much to gain and nothing to lose.