Certified Public Accountants (CPA): Roles, Responsibilities, and How to Become One

A Certified Public Accountant (CPA) is a highly regarded financial expert with specialised knowledge in accounting, auditing, and taxation. Recognised globally, CPAs play a crucial role in financial management, offering services such as auditing financial records, providing tax advisory, and representing clients before tax authorities. Similar to a Chartered Accountant (CA), obtaining a CPA certification is a prestigious achievement that significantly boosts career opportunities in finance and accounting.

This article delves into the CPA designation, outlining its primary responsibilities, career prospects, and the advantages of earning this credential. Readers will gain insights into the essential skills required, the CPA examination process, and how it compares to other financial qualifications such as an MBA or CA. Whether you are an aspiring accountant or a finance professional seeking career advancement, understanding the CPA pathway can help you make informed decisions about your professional growth.

What is a Certified Public Accountant (CPA)?

A Certified Public Accountant (CPA) is a qualified professional who has successfully passed a licensing examination conducted by a state's Board of Accountancy.

These state-level CPA exams are developed in accordance with the guidelines provided by the American Institute of Certified Public Accountants (AICPA). The Uniform CPA Examination is available only to individuals who possess a bachelor's degree and have relevant professional experience in accounting.

In other countries, equivalent credentials exist—most notably the Chartered Accountant (CA) designation, which originated in Scotland and is now recognised across various international jurisdictions.

Examples of a Certified Public Accountant

CPAs work in diverse industries and hold various roles. Some examples include:

• Tax Advisors: Specialise in helping individuals and businesses comply with tax laws, optimise their tax liabilities, and plan for the future.
• Auditors: Examine financial statements to ensure accuracy and compliance with regulations. Auditors play a vital role in ensuring transparency and accountability.
• Forensic Accountants: Investigate financial fraud, embezzlement, and other financial crimes.
• Financial Consultants: Provide strategic financial advice to businesses on growth, restructuring, or budgeting.

Each of these roles highlights the wide range of expertise and value that CPAs bring to the table.

What are the Key Roles and Responsibilities of a CPA?

A CPA wears many hats in the finance world. Here are some of their key responsibilities:

• Auditing: CPAs ensure that financial statements are accurate and comply with accounting standards.
• Tax Planning and Preparation: CPAs help clients minimise tax liabilities and prepare annual tax filings.
• Consultation: Provide financial advice on business decisions, mergers, and investments.
• Compliance: Ensure that businesses and individuals meet financial regulations and reporting standards.
• Forensic Accounting: Investigate fraud and financial misconduct.

These roles make CPAs essential to the functioning of both small businesses and large corporations.

Required skills for CPA

CPAs must keep themselves informed about the latest tax updates, regulatory changes, and developments introduced by the Financial Accounting Standards Board (FASB). Beyond accounting expertise, a successful CPA should also demonstrate the following key skills:

• Leadership
• Critical thinking
• Written communication
• Technical proficiency, including expertise in Excel and business intelligence tools

Difference between CPA and Accountant

A CPA holds more legal authority and is often considered more prestigious than a general accountant due to the CPA's ability to perform audits and represent clients in legal tax matters.

How to Become a CPA?

Becoming a CPA involves several steps. Here is an overview:

• Educational Requirement: Obtain a bachelor's degree in accounting or a related field.
• Pass the CPA Exam: The CPA exam is divided into four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).
• Gain Experience: Complete 1-2 years of work experience under the supervision of a licensed CPA.
• Obtain CPA License: Once the exam and experience are completed, apply for the licenses in your state.

CPA Exam

The CPA exam is known for its rigour and includes the following four sections:

• Auditing and Attestation (AUD)
• Business Environment and Concepts (BEC)
• Financial Accounting and Reporting (FAR)
• Regulation (REG)

Candidates must pass all four sections within 18 months, which add to the challenge of obtaining this certification.

CPA Career Paths

CPAs have a wide range of career options, including:

• Public Accounting: Auditing and tax services.
• Corporate Accounting: Managing the finances of companies.
• Government Accounting: Ensuring public funds are used effectively.
• Forensic Accounting: Investigating financial crimes.

CPA ethics

CPAs are bound by strict ethical guidelines, ensuring their commitment to transparency and honesty. Ethical issues like the Enron scandal have highlighted the importance of maintaining integrity in financial reporting.

Benefits of a CPA license

Here are some key benefits of a CPA license:

• A CPA license offers several benefits, including enhanced job security, broader career prospects, job satisfaction, and higher earning potential.
• In India, the demand for qualified CPAs is rising due to increasing global business requirements and a noticeable shortage of accounting professionals.
• The talent gap is widening as fewer students pursue accounting, and an even smaller number opt for CPA qualifications.
• Additionally, many current members of the American Institute of Certified Public Accountants (AICPA) are approaching retirement, further driving demand for skilled CPAs.
• This shortage ensures strong job security and opens up diverse opportunities across industries.
• Holding a CPA licence allows professionals to take on varied roles in financial accounting, auditing, and taxation, with the flexibility to work independently.
• CPAs are highly valued by multinational corporations, government institutions, and private firms, making them preferred candidates in the job market.
• Licensed CPAs can also establish their own practice, offering services to individuals, businesses, and non-profit organisations.
• A CPA license often leads to senior-level positions such as Chief Financial Officer (CFO), highlighting the value of this qualification.
• The certification also enables professionals to undertake specialised work, contributing to more meaningful and rewarding careers.
• For those who enjoy client interaction, the role may include financial advisory or representing clients in taxation matters.
• Professionals interested in strategic planning can explore opportunities in financial analysis and business planning.
• CPAs generally command higher salaries than their non-certified counterparts. In 2023, the average CPA salary in India was Rs. 96,752, with earnings ranging from Rs. 60,874 to Rs. 1,50,612.
• In comparison, non-CPAs earned between Rs. 47,138 and Rs. 82,167, depending on experience, job role, and location.
• Considering the global demand and strong financial rewards, a CPA license is a highly valuable qualification for aspiring accountants in India.

MBA vs. CPA: Which is the better path?

While a CPA focuses on the specifics of accounting and tax law, an MBA offers broader business management skills. Your choice depends on your career goals—whether you want to specialise in accounting or aim for a more general management role.

Conclusion

Becoming a CPA is a rewarding career choice with a variety of paths to follow. Whether you aim to specialise in tax, auditing, or consulting, the CPA designation opens doors to numerous opportunities. For finance professionals in India, securing a CA Loan through Bajaj Finance can help you grow your practice and achieve greater success.