Monday, December 1, 2008

Detailed info on CPA...

Becoming a CPA consists of 3 stages - Education, Exam and License.

1. See whether you satisfy the educational requirements of the state where YOU RESIDE , then look for other states' requirements.

2. Go through the licensing requirements regarding the work experience part / education in lieu of experience which you should satisfy after passing the exams.( we all fail to look into this as we give more priority to passing CPA exams).

3. Then decide whether to pursue CPA.

Note that passing the CPA exams itself is not sufficient( even though they are tough exams). After passing the CPA exams, you have to get the license, then only you can have the CPA title behind your name, otherwise it is just a resume enhancer that "you have passed the CPA exams but no license and no CPA title". GETTING THE LICENSE IS VERY IMPORTANT. So you have to satisfy both the eligibility and licensure requirements.

REMEMBER Only if you get the license in ANY state, you can work as CPA in the industry, anywhere in the US without having transferred your credit scores / license to that particular state, but practise as a Public Accountant in that state where you are licensed. (i.e if you are licensed in state X, you cannot practise as a Public accountant in state Y or Z but can work as CPA in any company / industry in state Y or Z.) . This restriction may change in future as NASBA is trying to relax the rules , Pls refer to the NASBA (National Association of State board of Accountancy) website.

If you don't have the work permit to work in US, you can pass the CPA exams and have it in your resume , which will surely help you in future .

There are about 55 State Board of Accountancies in US. Each State Board of Accountancy has its own requirements for both eligibility to appear for the exams AND for the licensure. Please note that ONE of the common requirement in ALL the states is passing the common CPA exam.

Most of the states in US have 150 semester credit hours requirements for both eligibility and licensure.

Some states have 120 hrs for eligibility but 150 hrs for the licensure (i.e get that additional 30 hrs after passing the exams).

A few states like California, Colorado, Delaware etc have 120 credit hours requirements for both eligibility and licensure. Also check whether you satisfy the residency requirements of the states.

I guess,Delaware is the only state that allows people with less than 120 credit hrs and no residency reqts. Since DE state require US federal taxation course credit ,You MUST do a online US federal taxation course for sure to apply through DE.


If you have foreign education (for example, a degree from India) , then you need to get your transcripts (degree certificates) evaluated. Each state has specified the list of evaluation agencies which it recognise and it is not the same for all states. So you must pick a state before you can have your transcripts evaluated. Pls refer to the State Board's web site for latest details.

For Indian Degrees: (3 yrs with 30 courses) = around 90 credit hrs

M.Com (2 yrs with 20 courses) = around 60 credit hrs

Foundation / PE I - possibly 8 credit hrs

CA inter / PE II -possibly 15 to 30 credit hrs( i.e. some may give just 15 whereas some may give even 30 hrs)

CA final - possibly 15 to 30 credit hrs.

No credits are given for repeated courses.

Category 1: Indian B.Com + M.Com - possibly evaluated to be 150 credits.

Category 2 : + CA(inter) -possibly 120 hrs or less than 120 hrs

Category 3: CA (irrespective of your bachelors Bcom / Bsc / BA) -ONLY Colorado board qualifies you to appear for CPA exam,based on CA membership certificate without even evaluating your credentials. Even photocopy of the membership ceritficate is sufficient. See CO web site for list of Chartered Accountants of other countries too. Michigan also recognise CA's. Check with them.

But other states require your CA credentials to be evaluated and

For Bcom+ CA ->probably 120+, but very rarely 150 & also <120.

For Bsc + CA - possibly < 120 or 120, surely not 150.

Catagory 4 : Double Bachelors like + BBA - possibly 120 hrs or even 150 hrs (if you have non-repetitive courses).

Or Bcom + MBA - possibly 120 hrs / even 150 (if you have non-repetitive courses).

Catagory 5 : For non-Bcom+ MCom - possibly 120 hrs.

For non-bcom + CA inter , it is their own never know...

If you have non-bcom degree and dont have the minimum accounting hrs and business hrs, they may even tell you that you dont have bachelors at all....anyways check with them.

PLEASE NOTE THAT EACH CASE IS DIFFERENT . My word is not final. Just giving you a rough idea.

Basic Rule: First see whether you satisfy the total 120 or 150 credit hrs ( all from a regionally accredited school/college - this includes recognised universities of other countries like India). Then see whether you have the specific accounting hrs (mostly 21 to 36 hrs) and business hrs ( mostly 20 to 36) in that total 120 or 150 cr hrs, as required by the state board. Some states may require ethics course credit also.

Most state boards specify as follows:

Accounting hrs ->hrs from courses like Intermediate Accounting (mostly NOT introductory accounting), Advanced Accounting, Auditing, Taxation etc.

Business hrs -> Business laws, Economics, Marketing, Finance etc

Each state has its own rules regarding this list of courses and number of hrs. So check with your board.

For example, if the state requires 120 credit hrs in which specific 24 accounting hrs( and within that 24 hrs, 10 taxation hrs and 3 auditing hrs) and 21 business hrs, the remaining 120-24-21= 75 hrs may be even from non-accounting courses (like English, Language etc). Also note that if they specify 'taxation' even Indian taxation would be sufficient. But if they specify US federal taxation, you need to have that credit.

So to get a full picture, you may need to get your crendentials evaluated. Then only you will know where you stand. Also note that each evaluation agency has its own way of evaluating the transcripts and same candidate may get different credit hrs from 2 different evaluation agencies.

Choosing the right evaluation agency is another big problem as each state has specified some agencies in their web sites. Facsusa is a popular one (for DE, CO etc) but of late, few have bitter experience.... Some recommend Josef silny....Check it out...These agencies may take 1 to 2 months time to evaluate your credentials. Also note that you have to send the ORIGINAL certificates/ transcripts to get them evaluated.

1. Decide the state board where you want to take CPA.

2. Apply to the evaluation agencies to get your credentials evaluated.

3. Based on the evaluation results, send in your application to the board.

Even if you fall short of few cr hrs, go ahead and finish it in an accredited college ( as specified by that board).Then apply to the board.

For those who want to pursue from India / other country,

For those who want to pursue from India / other country,

1.If you have less than 120 hrs, Delaware is the only state where you can apply,I guess ... check other states rules too as these are subject to change at any time.

If you have 120 hrs , you may have to read the Board's rules of the states like California,Colorado,Delaware, New Hampshire etc.

If you have 150 hrs, you can apply in any state ( subject to residency reqts). The following states don't require residency and citizenship. Alaska,California,Colorado,Connecticut,Delaware,Florida,Geor gia,Illinois,Kentucky,Maryland,Massachusetts,Montana,Nevada, New Hampshire,New Jersey,New York,Oregon,South Carolina,South Dakota,Texas,Utah,Virginia,Washington, Wisconsin etc. Pls check the states web sites for the latest details.

If you are a member of Institute of chartered Accountants, see the CO and MI board web site for more details as CA's are eligible for CPA thru CO and MI.

2.You can not take the U.S. CPA exam outside the U.S as it is offered only in the U.S.A. So arrange for your visa etc.Visa procedure is available at the web site:


The Content Specification Outline (syllabus) is available at

CPA exam is a computerized exam consisting of four sections/parts:

Auditing & Attestation (AUD) - Length of the exam being 4.5 hrs

Financial Accounting and Reporting (FAR) - 3 hrs

Regulation (REG) - 3 hrs

Business Environment and Concepts (BEC) - 2.5 hrs

The passing score for each of the four exam parts will be 75. Each section has Multiple Choice Questions(MCQ) and Simulations. ( But BEC has no simulation).

Normally for Indian Mcom's and CA's who have no idea about US Accounts and laws , they can pass all the 4 sections within a span of 6 to 12 months ( full-time disciplined self-study like 6 to 8 hrs a day) depending on their exposure levels . For Bcom's, more time is needed but still it's manageable. YOU CAN DO IT !

If you have knowledge about US Accounting and business and taxation laws, even 4 months full-time preparation is sufficient.

Since you can take the sections in any order of your choice, you can choose the sections which you find it easy and comfortable. Some may prefer BEC, some may prefer AUD, it all depends on your exposure level.

Just giving you an idea about the major topics covered:

BEC - Business structure (like partnerships,corporations, LLC,LLP etc), Financial Management (NPV + capital budgeting), Cost Accounting, Economic Concepts , Information technology etc - Theory + problems- All almost same as Indian Scenario.

REG - 40% of the paper- Professional Responsiblities of an Accountant and various business laws in US like SOX, Antitrust, Contract, Agency, Federal Securities, Bankruptcy etc - full theory) and

60%- U.S Income tax laws (individual,corporations etc), Gift and estate laws - Theory +problems . Though new, we know the basics.

AUD- As usual, lots of theory...somewhat similar to indian auditing....but have to read a lot like statements on auditing standards( SAS) etc.

FAR- U.S Accounting - voluminous - Financial statements Analysis, Fixed Assets, CA and CL, Investments, Stock holders Equity (EPS etc) ,Stament of cash flows, Business combination (i.e Amalgamation), Consolidated Financial Statements, Deferred taxes, Leases, Derivative instruments, Government Accounting, Not-for-profit Accounting etc...list continues.Need to work out lot of problems.

You can find more details in the content specification o


The Exam is offered 5 (and sometimes 6) days per week during two months of every quarter. (These periods are known as "testing windows.") Testing is available in January & February; April & May; July & August; and October & November. Testing is NOT available in: March, June, September, and December.

Boards permit eligible candidates to take any sections of the Examination in ANY testing window and in ANY order they wish. However, candidates may not take any single section twice in the same testing window. Once candidates pass one Exam section, most boards allow 18 months for passing the remaining three sections. Please refer to the requirements of the boards for the rules.

Note that you can take even 1 exam section at a time and just pay both the application fee/ registration fee + fee for that section(NOT for all sections).


Estimated costs for first-time candidates applying to take all four sections will be approximately $800-$900 ( Each state has its own exam application fees ranging from $150 to $250). Latest approximate fees for each section is

AUD $187.00

BEC $140.78

FAR $175.44

REG $152.33

Regarding the CPA Books / Review Materials, it all depends on your wallet.

Approximate latest prices for all 4 sections are

Wiley - CPA Review Books $120 + CD $230 ( least cost + decent coverage, so most people prefer this)

Bisk - Books + CD =$700

Gleim- Books 40*4= $160, CD 55*4=$220, Sim software $100 each

Becker - All 4 $2500 or $850 each (very expensive)

Though we hear lot of successful stories from becker students, it is not really necessary. If you can afford it, go ahead. Otherwise, start with WILEY ( First get the feel of wiley books ,then go for CD) and then, if you feel necessary, you can supplement with gleim or any other CPA review. You can check their websites for the latest prices.

You can refer to some college textbooks if you are new to any topic. Gleim and Becker offer classes to international students.(They conduct classes in India too.Costs are almost same in Indian Rupees as in $). Check their web sites for the latest details.

You can even buy used CPA Review books / CD from amazon or . You can also refer to some college textbooks, if you want more explanation as these CPA review books have consolidated all points but not very elaborative.

The overall cost for doing CPA is approx $1000 to $3500.

For international students, add up your plane fares and other visa proceesing fees as Exam is conducted in US ONLY.


1. First have your credentials evaluated by an outside agency, as specified by your board.(The processing time is like 1 to 2 months). They may send their evaluations directly to the state board and they will intimate you too.

2. And if you are confident to take the exams within 6 months, send in the initial application form to the State board specifying the exam sections which you want to take, together with the FEES for those exam section(s) which you want to take up at that time (NOT for all sections).

The processing time is like 8 weeks.

Then they will send you the Notice to Schedule (NTS) either by mail or email.(Fees may be partially refunded in case of Education Deficiency or other valid reasons..).

Some states have the option of p

1. First you have to apply (initial application) to see whether you are eligible to sit for the CPA exam. ( These states may have their own evaluators / outside evaluators).

2. Then the board will reply whether you are eligible (normally, processing time is 2 to 3 months if they need to evaluate your foreign credentials). But if you have US Bachelors+ masters in accounting, the processing time is 8 weeks.

3. Once you are eligible to sit for the CPA exam, again you have to send in the exam application form specifying the exam section / sections you want to take, together with the fees for those exam section(s) which you want to take up at that time (NOT for all sections). Then NTS will be sent to you within 15 days by the mode you have chosen.

Remember, EACH TIME you take up 1 or more sections of the exams, you should send the exam application form(or online registration form in some states)+ the fees.( The processing time is like 15 days or so to get the NTS for re-exams).

I'm giving you a rough idea about the procedure. But check with your board as these rules are subject to change and each state has its own procedure.

The major steps are:

- Decide YOUR state board.

- Evaluate your foreign credentials,if any.

- Apply for the exam.

- Receive your NTS.

The NTS may specify some time limit (normally 6 to 9 months depending on the state board's rules) within which you have to write that section(s) for which you have applied. After the expiry of that time limit, you may have to again apply for another NTS.

- Schedule your exam at any prometric center near your place in US( NEED NOT BE IN THE SAME STATE WHERE YOU APPLIED FOR CPA).

- Take your exam

- Receive your score report


Foreign credential Evaluation (by outside agency or by the state itself) + Application form - 2 to 4 months processing time

+ 4 months to 6 months (full-time study) to pass all 4 sections( Max being 18 months).

If you are applying to the states and if you are sure that you will get the relevant credit hrs, you may start studying after sending in the application form. By the time you receive your NTS, 3 or 4 months might have elapsed from the day you started the CPA process. You can then schedule your exam so that there won't be any time delay.


Once you pass all the Exams ( Hooray! Congrats!), you have to get the license to have that CPA title. For that, you may need to satisfy the work experience part.

Some states give you certificates after you pass the CPA exams, but only after satisfying the work experience part, you can get the license as CPA. These states are called as Two-tier states (i.e. first they issue CPA certificate after passing CPA exams ,then they issue license after satisfying their licensing requirements). There is a difference between certificate and license( aka 'permit to practise' in some states). Even if you have the certificate, you cannot have the CPA title behind your name.i.e you can say that you have passed CPA exams but could not use CPA title.

Pls note that DE has now changed its rule of giving the certificate after just passing the CPA exams. Most international students are taking this path of just getting the certificate and no license but use their CPA title in a restricted sense.

Excerpts of Old and New rule are reproduced below:

OLD Rule: Once a candidate successfully passes the CPA Exam, the AICPA Ethics Exam and submits an application to the Board of Accountancy, they are eligible to obtain a CPA certificate. Holders of this certificate may work in industry, education or government as a CPA and do not have a continuing education requirement under Delaware law.Should the certificate holder wish to work in public accounting, the licensing procedure mandates that the certificate holder get specific work experience and then apply to the Board of Accountancy for a permit to practice. This permit to practice then enables the holder to work in public accounting as a CPA, as long as they meet the continuing education requirement.

The new law changes this licensing procedure(effective on January 3, 2006). Under the new law, an individual must pass the CPA Exam and the AICPA Ethics Exam and get their experience before they can get their certificate and permit to practice. Once they get their certificate and permit to practice, they can work in industry, education, government or public accounting as a CPA, as long as they meet the continuing education requirement.

You can read the current and new law at age

There are few other two-tiered states like IL etc. But they may have a rule that you have to get the license within a specified period of time say 5 yrs after getting your CPA certificate, otherwise the credit for the exams goes away...So check with the board.

Some states make no distinction between certificate and license (i.e certificate alias license will be given after you satisfy their work experience reqts).

You can become a licensed CPA with NO work experience if you have a master's degree (i.e.150 hrs) in some states like Colorado, Florida etc. Pls check the Board's rules.

Also some states( say X) even recognise work experience under an actively licensed CPA in other states of US(i..e who is not licensed in that state X but in other states). For example, CO recognises work experience under any practising CPA in US (say licensed in FL). Some states recognise work experience in a company under the supervision of a licensed CPA. States like DE, CO recognise even Indian public accounting experience under a practising Chartered Accountant. (i.e. CA articleships). Pls verify this with the board.

Most of the states with 120 hrs eligibility + license reqts have a rule that if you have 120 hrs, 2 yrs of public accounting experience is required to get the license but if you have 150 hrs, then only 1 yr of public accounting experience is sufficient.

Once you get your license in any state, YOU ARE A full fledged CPA. i.e. You get that CPA title behind your name whether you work in a company or practise as CPA. (Ofcourse practising CPA can sign as CPA in that state where he is licensed).

Also to keep the license active, one has to get 80 hrs CPE(Continuing Professional Education) credit every 2 yrs.

Foreigners residing in US:

If you are residing in US AND want to work as CPA in the industry or practise as a Public Accountant( provided you have the work permit), it will be better if you first get that 150 credit hrs , then appear for CPA exams as that will be easier, later on, to transfer the exam scores / licenses to any other states.

For example, After passing CPA exams, if you want to transfer the CPA exam scores from one state (say A having 120 hrs eligibility requirement to take the CPA exam) to another (say B having 150 hrs eligibilty criteria), you can do so only if you satisfy the B state's requirements AT THE TIME OF TAKING THE CPA EXAMS. ( Few states say that educational requirements should be me

Few states say that educational requirements should be met within the specified period of time after passing the exams).Similarly, to transfer your license from one state to another, you have to satisfy the other state's licensing requirements.

CHECK WITH THE BOARD ALWAYS as the boards keep on changing the rules . Read the Board's rules CAREFULLY.

CPA info is available at following web sites:


Select the appropriate state and read all the requirements. And if you have a doubt, contact them.

ALL CPA examination info is available at

Please download the CPA Exam Candidate bulletin ( more details about the exam process) from this link:

-more about licensure tools

Job Prospects:

Normally Practising CPA (licensed in his own state and who signs with his name) makes more money than a CPA working in the industry (who is not licensed in the state where he is working). A fresh licensed CPA may start with a salary of $45k and after 2 yrs of experience, salry may rise to $60K. Just giving you a rough idea...Do a search in monster or any job search web site.(Remember full fledged CPA means that he/she has passed CPA exams AND holds a valid license of ANY state).

If you want to get an accounting job in US and you don't have the work permit, you need an employer who will sponsor for H1 visa. Looks like it is tough to get that one as it is not like IT jobs(special catagory) and also very restricted number of visas are given each year for accounting jobs. Talk to a visa consultant about it.

You can also try getting into one of the big 4 US accounting firms like PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG in your country. That might give you a entry into the US job network so that you can find a sponsor based on your experience with these firms. Also, BPOs are getting popular nowadays.

I hope I have consolidated all the points clearly without confusing anything.

After going through this mail, if you have doubts about any procedure/ requirements, ALWAYS contact your state board (as these rules MAY change at any time). Also they are the right person to give us CORRECT replies.

If I had gone wrong anywhere, pls correct me. I hope this info would be helpful to CPA Aspirants.

Also please send in more inputs useful to all.


Divya said...

Good job!! Excellent consolidation of procedures