Accounting Certification

For a successful accounting career, you will want to earn an accounting certification. Certification essentially is a designation that shows your competency in accounting and your dedication to enhancing your knowledge of the field. Certification is so common among accountants that, even though it is not technically required, you should pursue certification in order to ensure that your accounting career will advance. Employers and prospective clients will be looking for accountants who have earned their certification.

To earn certification, you will need to pass a certification exam. You will also need to meet a minimal education requirement, which in most cases is slightly more credit hours than are required for a bachelor’s degree. Many certification exams have multiple sections that you need to complete within a certain period of time, but you do not need to take all the sections at once. Some accounting careers certifications require a certain level of work experience, while others you can earn while you are still in school.

You will need to continue your education to renew your accounting careers certification after you pass the certification exam. Typically, you will need to meet a minimum number of continuing education credits every few years to maintain your certification. This ensures that people working in accounting careers remain up to date on new trends and technology within the field.

The most common accounting careers certifications are the Certified Public Accountant (CPA) and Certified Management Accountant (CMA) designations. Many other certifications exist and cover all facets of accounting careers. Depending on your specialization, you may want to earn a certification in auditing, forensic accounting, or government accounting. Certificates are also available for skills such as tax preparation, bookkeeping, and payroll management.

When to take your certification exam depends on which designation you seek and on your schedule. Because the CPA applies to many different fields within accounting, you will likely wish to take the CPA exam early on in your career. If you are currently pursuing a master’s degree in accounting, you might even want to take the CPA exam before you graduate. However, you may not realize that you want to specialize in a particular branch of auditing until you gain more experience in the field. In that case, you would likely decide on which certification to purse after being exposed to the ins and outs of working in accounting careers.

What Is Accounting Certification?

Gaining certification is a great way to advance accounting careers. Accounting certification means that you have met certain requirements within your education and work experience and have passed a certification exam. While certification is not technically required to work as an accountant, you will be much more marketable if you complete the certification process. So many accountants become certified that someone lacking certification will have a harder time advancing his or her career. You are more likely to get hired or promoted if you are certified.

Accounting certification exams are administered by the State Board of Accountancy. The Certified Public Accountant (CPA) exam is one of the most common certifications. Management accountants may wish to take the Certified Management Accountant (CMA) exam. Many other certifications are given to show excellence in other specific aspects of accounting. Depending on your specialization, you may want to look into other certifications such as the Certified Forensic Accountant (Cr.FA), Certified Internal Auditor (CIA), or Accredited Tax Preparer (ATP) certifications.

The American Institute of Certified Public Accountants (AICPA) authors the CPA examination that is given in all fifty states. The CPA exam has four sections that take two days to complete. However, you do not have to take all sections of the exam back to back. Some accountants prefer to take two parts of the exam one day and then take the other two parts another day several months later. This allows more time to study and makes sure you are well rested for the exam. The test takes a total of fourteen hours to complete, and all four sections must be completed within a year and a half. The four segments of the exam are Auditing and Attestation, Business Environment and Concepts, Regulation, and Financial Accounting and Reporting. The pass rate of the CPA exam is 25 percent, so make sure you have devoted plenty of time to study before you go into the exam.

Passing the CPA examination may be the most challenging requirement to gaining certification, but it is not the only requirement. Certification for accounting careers also requires that you have at minimum a bachelor’s degree, so if you only have an associate’s in accounting, you will need to earn more college credit before you can become certified. Typically a bachelor’s degree in accounting requires 120 credit hours. CPA certification requires at least 150 credit hours. If you plan to obtain a master’s degree in accounting, you may wish to do this before taking the CPA exam. If you do not plan to attain a master’s degree, just make sure that you graduate your bachelor’s program with the extra 30 hours required for certification or that you take additional classes after you complete your degree. In many cases, a certain amount of work experience is also required to earn certification. These requirements can vary based on the type of certification you seek.

Once you have earned your accounting certification, you will still need to renew your certification every few years in order to continue to hold the designation. Usually, what you need to do is continue to take accounting courses and earn additional credit hours. For CPA certification, you need to earn 120 credit hours every three years, completing at least 20 hours each individual year. For example, you could not put off more than 80 credit hours for your third year. The idea behind certification renewal is to encourage accountants to continually advance their educations rather than just cramming extra coursework in at the last minute. Courses are available online and in person to complete your credit hour requirements for maintaining accounting certification.

Types of Accounting Certification

There are many different types of certification available for accounting careers, some of which are more common than others. The certification that is right for you depends on your specialty.

One of the most common certifications for accounting careers is the CPA, or Certified Public Accountant designation. The CPA applies to many fields within accounting and is a great way for auditors, government accountants, forensic accountants, public accountants, and others to advance their careers. In fact, the designation is so common within the accounting world that you would be putting yourself at a disadvantage to forgo obtaining a CPA. After you have worked in the accounting field for a few years, employers and potential clients will expect that you earn your CPA.

To earn the CPA, you need to pass the CPA exam. The exam is administered by the State Board of Accountancy and authored by the American Institute of Certified Public Accountants (AICPA). The CPA exam is comprised of four sections: Auditing and Attestation, Business Environment and Concepts, Regulation, and Financial Accounting and Reporting. You do not need to take all four sections at once, but you must complete them within one and a half years. Aside from passing the exam, you will need to have at least 150 college credit hours under your belt, even though the usual requirement of credit hours for a bachelor’s degree in accounting is only 120. To maintain your CPA designation, you will need to take continuing education courses and earn at least 120 credit hours every three years.

The Certified Management Accountant (CMA) designation is similar to the CPA and also commonly held by those pursuing accounting careers. The CMA designation differs from the CPA in that it concentrates more heavily on the analytical and consulting aspects of accounting. Obtaining your CMA will make you more marketable to work in the accounting department of a large corporation.

Like the CPA exam, the CMA exam also has four sections. These are Management Accounting and Reporting, Business Application, Strategic Management, and Business Analysis. You will need to have at least a bachelor’s degree to earn a CMA. You will also need to become a member of the Institute of Management Accountants, which is the organization that administers the CMA exam. Renewing your CMA takes work, too. You need to earn additional credit hours each year in order to maintain your certification.

Accountants working as financial planners may be interested in earning a Certified Financial Planner (CFP) designation. While this is not required to practice as a financial planner, it will greatly enhance your ability to market yourself and draw in new clients. Just like the CPA and CMA designations, earning your CFP requires that you possess a minimum level of education and work experience. You will also need to pass an exam administered by the Certified Financial Planner Board of Standards, Inc. and complete the necessary continuing education credits each year. Earning your CFP also requires that you pledge to adhere to an ethical code in your work.

Other certifications are available for many aspects within accounting careers. You can gain certification in fraud, government accounting, business accounting, or tax preparation. A number of certifications exist for specific fields of auditing as well. While you may not know in which area you will specialize when you begin your accounting career, as you advance, you may find yourself drawn to a particular area within the field and decide to declare your specialization with a certification.

Prepare for Certification Tests

Your chances of doing well on accounting certification tests will increase the more you prepare. Aside from studying, you will need to plan when to apply for and take your exam and how to deal with any test-taking anxiety.

Think about your class or work schedule over the course of the year when you decide to apply to take a certification exam. Schedule the exam for a time of year when you are not swamped with work or education commitments. If you are a student, you may want to schedule the exam over the summer, or if you are already working as an accountant, you may want to avoid tax season when you schedule your exam. Also, plan plenty of time to study beforehand. If you want to take the exam after tax season, keep in mind that you will want to set aside a few months for studying before you actually take the exam.

You will have to go through an application process in order to take an accounting certification exam. The application needs to be submitted several months before you take the exam.

After you set up a study schedule, determine what materials you will need to study. You may wish to take a preparation course before the exam. These courses can be expensive, but they can pay off. If you do not want to pay for a preparation course, practice tests are available for you to do on your own. Make sure you become familiar with the rules of how your exam is administered and what types of questions to expect. Do several practice tests on your own, and track your progress. Pay attention to which parts of the exam are more difficult for you, and concentrate your studying in those areas.

Make sure you are well rested before taking your exam. Eat a decent meal that contains protein beforehand so that you do not get hungry in the middle of your test. If you feel anxious about taking your accounting certification exam, remember that the more you prepare beforehand, the better you are likely to do. The scores you earn on your practice tests will be good indicators of how you are likely to score on the exam. The more you know about what to expect during the exam, the less anxious you will be.