CPA REQUIREMENTS BY STATE: EXAM & LICENSURE
Even though the CPA Exam is a national exam, states may license you based upon laws enforced by the Board of Accountancy in any one of the U.S. jurisdictions because the Constitution “grants the power to regulate the practice of the professions within that jurisdiction’s borders.” So, if you are licensed as a CPA in Iowa, you may not be qualified to practice if you relocate to New Jersey, even if you’ve passed the CPA Exam.
The onus of meeting a state’s requirements for practice is on the individual, not the state, therefore it’s critical that you research and understand what specifics comprise your desired state’s regulations and laws of practice. Each state’s Board of Accountancy will list the requirements, fees, applications, education and continuing education needed on their website. Other requirements that must be met by a state may include:
- Minimum state age requirements
- Length of residence within the state
- Passing the state’s CPA ethics exam
- Education hours or degree level (usually a bachelor’s) from an accredited program
- Completion of the “150-Hour Rule,” a requirement of five years of full-time study which has been adopted by almost all state boards of accountancy
All states require that you be licensed before you can practice as a Certified Public Accountant. The rigorous testing process for certification and licensing ensures that accountants meet industry standards and are up to speed in changes to the laws of accountancy. One important distinction should be made between the requirements to sit for the exam and requirements to become licensed. Use our drop-down list to find your state and begin learning about its requirements.
Search CPA licensing requirements by state
The National Association of State Boards of Accountancy (NASBA) lists five key reasons why earning the CPA designation is so highly regarded and sought after:
- Prestige and respect: CPAs are often thought of as an elite group of professionals and are highly regarded by their peers, clients and the population in general, says NASBA.
- Career development: Passing the CPA Exam and earning CPA licensure may help accountants stand out to potential employers, who may be impressed by this coveted title. Earning a CPA license demonstrates a commitment to the profession and may highlight candidates for leadership and management positions.
- Career security: One reason for increased demand for CPAs even into the 2020s is that in the 1990s there was a dip in accounting students when the internet exploded, and students instead chose jobs in IT, technology and marketing. When the Sarbanes-Oxley act—which mandated certain practices in financial record keeping and reporting for corporations—passed in 2002 there was an increased need for qualified CPAs to enforce higher standards of corporate accounting.
- Job satisfaction: With globalization, the environment of accounting continues to change. CPAs have more opportunities to travel and gain international business experience, especially those who are multi-lingual. With new paths available for CPAs, such as forensic CPA, individuals are able to make a difference depending on their skills and the motivations that drive them to be satisfied with their job.
- Salary and benefits: You’ll make 10-15% more if you have your CPA license, says NASBA, and cites the U.S. Bureau of Labor Statistics job growth data for accountants: expected growth in the field is at 4.4% through 2032.
Once the milestone of passing the CPA exam has been accomplished, you’ll still need to fulfill the requirements of the state in which you plan to practice, as each state has unique requirements in place. The CPA exam may be the same nationally for all candidates, but other requirements may differ by jurisdiction, and you must be declared eligible for the examination, and subsequently licensed, by the Board of Accountancy in one of the 55 U.S. jurisdictions. But no matter what your state of choice, we’ve made it easy for you to learn exactly what the requirements are.
If your intention is to consult or move into an executive role within a company, you’ll have two routes to go to accomplish your goal: earn an MBA/master’s or the CPA designation. According to Forbes, some 51% of executives are now choosing to earn an MBA or master’s, which offers a wider breadth of knowledge than the CPA; however those in private practice, tax practices and financial roles still find the CPA to be the more proficient route, offering knowledge that caters specifically to their role and purpose rather than the wider suite of executive duties.
Despite these differences, 35% pf executives still choose a CPA as their education credential though, says Clem Johnson of Crist Kolder Associates in Forbes, “CFOs with MBAs have steadily been on the rise, while the number of CFOs with CPAs have been on the decline over the past five years.”
The general rule of thumb seems to be that An MBA or master’s may be a better choice if you are interested in working in business or industry. A CPA is likely better suited for those interested specifically in accounting and finance. But there is nothing set in stone, and there are many areas where the two overlap. Because of this, many professionals earn both a CPA and an MBA.
The rigor of earning a CPA extends beyond the exam however, and filters prodigiously into the role of the CPA. The AICPA® explains that in both education and practice, an individual who seeks to become a CPA must submit to what is known as “integrity of the rigor.” In other words, CPAs must prove over time that they are qualified to meet the highest standards and uphold a code of conduct, adhere to state laws and regulations as well as those of federal regulators such as the Public Company Accounting Oversight Board and the Internal Revenue Service. They stress that there are four “E” pillars that every licensed CPA must meet:
- Education: Accounting students learn the fundamentals of the profession in an accredited college program, completing 150 semester hours of coursework for licensure. To maintain their license, CPAs must also complete continuing professional education.
- Experience: Candidates must also meet a hands-on experience requirement before a license can be granted. Experience can be gained through working and externships in public accounting, industry and government.
- Examination: Passing the CPA Exam provides proof that an accountant is qualified to practice at the highest level of the profession. The CPA Examination is the exam every CPA candidate in all 55 licensing jurisdictions in the U.S. will take.
- Ethics: CPAs must comply with a code of ethics including the AICPA® Code of Professional Conduct, which enforces a “commitment to integrity, objectivity, due care and competence” for as long as a CPA practices.
Passing the CPA Exam is just the beginning of your prestigious career. Once you’ve passed the exam and met the requirements for the state you plan to practice in, it will be imperative that you meet all continuing education requirements so that you can keep your license current. Few career fields have as many changing laws and regulations as accountancy, so it will be up to you to understand and implement the changes that occur within the field at the state, local and federal level.
Much of what you’ll need to know will be decided upon by what area of accountancy you plan to practice, and as you continue your education, you’ll have the ability to earn professional certifications that may help you advance or specify a particular area of accountancy, such as forensic accounting, government accounting, tax accounting, global management accounting or many other focused areas under the general accounting umbrella. But first things first.
Passing the CPA Exam is a marker of excellence and once you earn the designation of certified public accountant, you’ll join the 30–45% of accountants who have stepped up and earned the credential. NASBA estimates that there are 672,587 actively licensed CPAs in the U.S. as of September 2023 out of the 1.4 million accountants in the workforce.
Here are some tips to help you do your best on the CPA Exam:
- Take a practice test to establish a baseline and see what areas you need to study most.
- Make a study plan and stick to each goal.
- Tell your friends and family you’re taking the CPA Exam so they can help you minimize distractions and respect your study time.
- Use time management tools such as the Pomodoro Technique and 52/17 Method.
- Find a CPA mentor in your community; someone who has passed the exam and can provide support and tips.
- If you can’t find a mentor, look for a study group—or do both.
- Start studying early and use study guides or test prep services.
- Stay healthy. Studying for and taking the CPA Exam is stressful. Know your limits and plan to eat healthy and get the sleep you require to do your best.
As a Certified Public Accountant, you’ll be working at the highest level of your profession, trusted by clients and corporations of all kinds. As such you’ll need to act with moral strength, integrity and honor. While the road to reaching this pinnacle may not always be easy, the boundaries defined by the ethical path you take are clear and you’ll need to pursue the CPA designation with diligence and dedication.
Whether you’re just starting out and researching bachelor’s degree programs in accountancy or seeking a master’s or MBA before you decide to pursue the CPA and get licensed, we can help you understand the differences in state requirements and help you find accredited education programs, too. All you’ll need to do to get started is use our state dropdown to see basic CPA requirements for your state—or click the Find Schools button to research degree programs in accountancy or finance.
Updated: October 17, 2023