The following is part of a series of informational articles for working adults who are considering a master’s degree. We kicked things off with 6 Exciting Career Opportunities for MS in Accounting Graduates, followed by Is a Master of Science in Accounting Worth Your Time? and 5 Things I Wish I’d Known Before Becoming a CPA. Next week’s article is Finance or Accounting: Choosing the Right Degree for You.
Like Frodo’s journey to Mount Doom, the path to becoming a CPA is long and riddled with challenges. But also like Frodo, you will find that accomplishing your goal leads to some pretty significant rewards … even if you’re not flown away from your exam on the backs of giant eagles. (Sad, right?)
If you’re a student considering your options and wondering if a Certified Public Accounting degree is for you, it’s a smart move trying to figure it out beforehand. We won’t mince words here: While this career is known to be both lucrative and engrossing, provided you have the analytical mindset to enjoy it, it can also be tough.
The antidote to uncertainty? Knowledge. Read on to learn more about what a Certified Public Accountant is and does, what a day in the life will look like for you, and what it will take to earn your degree.
What Is a CPA?
CPA stands for “Certified Public Accountant,” and is a designation reflecting the fact that you are licensed to provide accounting services to clients in your area. Accountants prepare and examine financial records, ensure accuracy, prepare payroll, and assist clients and businesses with taxes and reporting.
How Long Does It Take to Get Master of Science in Accounting?
Those who want to go into accounting first have to get a bachelor’s degree in a related field. This could include economics, finance, business or others. It is possible to work as a CPA with only a bachelor’s degree, as long as you have the necessary experience to sit the exam (covered below) and a level of knowledge to manage the tasks required of CPAs. However, most choose to earn a master’s degree as well, both because it becomes much easier to navigate the field, and because it looks better on job applications.
What’s It Like to Study and Sit for the Licensing Exam?
The CPA exam is composed of four 4-hour sections, each covering a different aspect of accounting. They are broken into multiple choice, task-based questions and a written component. To study for it, you can buy books and take practice tests online. Most people study between 300 and 400 hours total for the test, so it is a big commitment.
Most states and jurisdictions require that you earn two years of public accounting experience under a licensed CPA before you can sit the exam. Often, this accounting experience can also be performed in other environments, such as government organizations. Your state will specify exactly how many hours or years are required, as well as exactly what’s needed to get the certification (so you can use the title CPA) and the license (so you can practice).
Note that the licensing exam varies by state, so earning a license in your home state doesn’t guarantee you will be able to move and still practice. While some states may have reciprocity programs, meaning a license in one is as good as a license in another, others don’t. If you’re attending school in a state other than the one in which you want to practice, it’s best first to move to the state in which you want to settle, then study for the exam given there.
What Can I Do with the Degree?
You can do many things with an accounting degree other than serve clients in an office. For instance, you can teach or work in marketing, become an auditor or an expert witness, or work in coaching to help other accountants get started with their businesses. Most accountants, however, do the following:
- Examine financial statements
- Ensure compliance of business and financial documents, tax returns and legal papers
- Estimate and prepare taxes
- Provide internal audits for clients
- Organize and maintain files
- Consult with clients on best practices for bookkeeping and finances in business and life
You should know that accounting is not a one-size-fits-all field, but rather a broad industry. It can be broken down into smaller niches, such as:
- Public Accountants
- Management Accountants
- Government Accountants
- Internal Auditors
- External Auditors
- Information Technology Auditors
What’s the Job Outlook?
The job outlook for accountants is excellent. The median wage for accountants in May of 2016 was $68,150. Keep in mind that this is the median – an average – which means the longer you’re in the field, the more you can make. Most CPAs who spend their careers in accounting make six figures for much of their careers.
Currently, there are about 1,397,700 practicing accountants, according to the Bureau of Labor Statistics. Jobs are predicted to grow at a rate of 10 percent between 2016 and 2026, which is considerably faster than average. Anyone graduating with a degree in accounting during this time period is likely to have no trouble finding a job.
What Are the Hours Like?
The majority of accountants work full time, with about 20 percent of them working more than 40 hours a week. It’s most common to work overtime in tax season, from January through April 15 … and sometimes later, if you’re working to help clients on extension meet the October 15 deadline. Most accountants find the work stimulating enough that they don’t mind long hours.
What Skills and Knowledge Are Required?
Becoming an effective and experienced accountant involves a great variety of skills and abilities. These include:
- Deep knowledge of economics and accounting
- Understanding of a variety of mathematical fields, including algebra, calculus and statistics
- Facility with the English language
- Good grasp of clerical duties and organizational systems
- Strong transcription skills
- Fast typing speed to keep up with client information in interviews and during phone calls
- Expert use of tax and legal forms
- Considerable savvy when it comes to technology
- Active and compassionate listening, as accounting clients often have difficult back stories and financial challenges
- Strong reading and writing skills
- Deep analytical and critical thinking skills, as accountants often encounter knotty problems without clear, established answers
- Deductive reasoning
- Good people skills
- Excellent ability to read people, as clients are not always entirely truthful when it comes to finances, and you don’t want to get caught up in anything
Naturally, this is not a complete list of the skills you will need to work as a Certified Public Accountant. You can get a more comprehensive list of courses by speaking with the director of your intended program, whether that means a Bachelor’s Degree or a Master’s in Accounting.