By Jessica Scheck, MBA
Accounting is currently one of the fastest growing career fields in the United States.
Employment projections released by the U.S. Bureau of Labor Statistics forecast that the employment of accountants and auditors will increase by 11 percent from 2014 to 2024, with the average growth of all occupations projected to be only 7 percent. This equates to the creation of 142,400 new accounting jobs in the United States.
In addition, the American Institute of Certified Public Accountants (AICPA) estimates that 75 percent of CPAs are expected to retire over the next 15 years.
An increased number of accounting jobs combined with an astounding amount of Baby Boomer retirees will mean a hot job market for young accountants.
Does a strong demand for accountants suggest that a bachelor’s degree in accounting is enough to land you a successful career in the field? Is it worth the additional time and financial commitment to become a CPA? Consider what is required to become a CPA candidate and the potential impact it would have on your professional accounting career.
What is a CPA?
The Certified Public Accountant (CPA) credential is a license to practice public accounting that is issued by your State Board of Accountancy. To obtain the license you must meet the following requirements:
- Pass a rigorous 4 part Uniform CPA examination administered by the American Institute of Certified Public Accountants (AICPA)
- Complete 150 semester hours of education (equivalent to a master’s degree)
- Work under a licensed CPA for a minimum of one year
What are the benefits of becoming a CPA?
Respect in the Industry
The CPA examination is arguably the toughest professional exam to pass in the world. According to AICPA, the average exam passing rate is consistently around 50 percent each year. The table below shows the most recent passing rates reported by AICPA for the current year:
Adding the three letters “CPA” to the end of your name is the equivalent to adding a prestige symbol— those three letters are well known and trusted throughout the business world. The CPA license is a testament to a strong personal work ethic, years of academic training, and a demonstrated high level of knowledge and competence in accounting.
Career Development Opportunities
There are several career paths to choose from in the accounting industry, with the two most well-known paths being public and private accounting. Most accountants start in an entry-level Staff Accountant position regardless to whether they have a CPA license. However, when it comes to climbing the corporate ladder, additional education and the CPA credential can be essential in boosting your accounting career. Without a CPA, opportunities for advancement are most likely limited beyond a Senior Accountant position.
Higher Income Potential
Robert Half’s 2016 Salary Guide for Accounting and Finance reported that accounting professionals with a CPA license make 5 to 15% more than their fellow colleagues who do not have the license. Over the course of a 40 year career, that can add up to a material difference in the total income you earn.
Several companies recognize the value in employing CPA accountants versus non-CPA accountants and it is being reflected in their compensation packages. Employers are encouraging their accountants to sit for the CPA exam by offering to pay thousands of dollars for review materials, reimburse employees for their exam fees, and pay out large bonuses for obtaining the certification.
Sitting for the CPA examination is a personal decision that every accountant may contemplate at some point in their career. The payoff for becoming a CPA can be tremendous in terms of salary and career advancement. Accountants who have earned a master’s degree, especially CPAs, likely have a strong advantage in competing for mid to upper-level positions and working with some of the most prominent accounting firms.
Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2016-17 Edition, Accountants and Auditors,
on the Internet at http://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm (visited September 13, 2016).
Robert Half, 2016 Salary Guide Accounting & Finance, on the Internet at https://www.roberthalf.com/sites/default/files/Media_Root/images/at-pdfs/robert_half_2016_salary_guide.pdf (visited September 13, 2016).
Become a CPA. Retrieved September 13, 2016, from http://www.aicpa.org/BecomeACPA/Pages/BecomeaCPA.aspx.