Are accountants practicing in the United States gainfully employed? What sort of licensing and specialties can they acquire? What are the average wages of US accountants? These are only a few of the important questions that will be answered in the discussion below. They will be of special interest to professionals, students, and other parties who share an interest in the accounting profession.
What Does it Mean to be An Accountant in the US?
In the United States, the designation, “accountant” does not have the same legal protection as that granted to other professions such as doctors and lawyers. Unlike in the legal and medical professions, accountants can rise to senior positions in accounting functions even without getting licenses from its regulatory bodies. In the United States, the main regulatory body for accountants is American Institute of Certified Public Accountants, (AICPA), which boasts of almost half a million members, in almost 150 countries, practicing accounting in industry, government, and education.
The AICPA sets standards of ethics for CPA’s as well as determining U.S. auditing standards in the audits of private companies in business and industry, not-for-profit organizations, and practically all branches and levels of government. The AICPA is also responsible for developing the questions in the Uniform CPA Examination, and its reviewers also grade the exams.
In the United States, becoming a CPA is generally subject to the individual requirements of each state and jurisdiction, although the certifying examination is carried out, ad administered, by the national AICPA.
Regardless of what state a potential CPA lives in, there are three considerations that need to be considered by the candidate:
First, the candidate needs to determine where to sit for the CPA exam. After making this decision, the candidate has to make sure that the appropriate education and other requirements needed to qualify in that particular state are secured. Note that the education requirements to sit for the CPA exam are different for each of the 55 states and jurisdictions.
Some states allow candidates to have degrees in foreign countries, as long as they meet certain requirements, requiring that certain subjects are taken, and that the minimum number of units are completed as part of their degree. Many states do not even require the candidate to have an accountancy degree, as long as the required subjects, and the minimum number of units, are completed.
Second, once the education requirements for have been completed in the state where the candidate plans to sit for the CPA exam, the candidate should review for the Uniform CPA Examination, and take the examination, which are scheduled for up to 6 days a week in the months of January, February, April, May, July, August, October and November, of each year. Each two month testing period is called a “window.” Candidates make appointments for specific dates and times during a window at a regional testing center. The Uniform CPA exam is a 14-hour exam covering four subjects: Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, and Regulation. It is a computer-based test that includes the traditional examination techniques of multiple choice and essay questions. It also has the so-called, “simulation” portion where a candidate is given a “real-life” business situation wherein decisions involving accounting and financial concepts are to be made.
Third, after successfully passing all four sections of the CPA exam, the next step for the candidate is to complete the other requirements needed to obtain a CPA license in the state where the candidate plans to ultimately practice as a CPA. Just like requirements for the CPA exam, requirements are different for each state or jurisdiction.
The most important part in this process is the work requirement where certain aspects of the accounting profession have to be completed and signed off. A candidate working for a public accounting and auditing firm has the upper hand in getting sign offs, because most of the required areas of experience, especially reviews and auditing, are regular work requirements in the profession.
Each of the fifty states in the United States has its own licensing bodies, together with the licensing bodies of the District of Columbia, the Northern Mariana Islands, Guam, Puerto Rico, and the Virgin Islands.
All the jurisdictions have generally liberal reciprocity laws, allowing CPA’s to practice between jurisdictions with minimal red tape and cost.
Practice Areas of a CPA
CPAs, because of their training and experience, are able to provide a wide range of services and are employed in business and industry, public accounting and other professional services firms, government, and education. Those in public practice are engaged by their clients for a wide variety of services including accounting, auditing, tax, personal financial planning, litigation support, technology consulting, management consulting, and business valuation.
Those employed in business, industry, and government are employed in a wide range of activities. These include accounting and financial reporting, evaluating, implementing and managing internal controls, designing and reviewing accounting and management information systems, compliance with tax and other statutory laws, as well as other areas of business and financial management.
Salaries of CPA’s in the United States
The average that an Entry-Level Certified Public Accountant earns in the United States is approximately $50K per year. The overall average salary is about $60,000 per annum. The job posts that have the highest pay grade are the ones associated with the accounting profession include Tax Consulting as well as Financial Analysis. Experience has a moderate effect on income for this job.
Experience in public accounting practice is a highly prized commodity in the accounting profession. Many professionals, after obtaining sufficient and exposure auditing companies for a public auditing company, usually transfer to private companies for much higher compensation; usually taking on senior accounting, and even, executive positions.