Information AboutCpa |
| CATEGORIES ABOUT CERTIFIED PUBLIC ACCOUNTANT | |
| professional accountant | |
| accounting in the united states | |
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Certified Public Accountants ('''CPAs''') are Accountant s in the United States who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for Licensure as a CPA. Only CPAs are professionally licensed to provide to the public, attestation (including auditing) opinions on Financial Statements . Many states prohibit the use of the designations "certified public accountant" or "public accountant" (or the abbreviations "CPA" or "PA") by a person who is not licensed as a CPA. According to the National Society of Accountants, the "public accountant" does exist nationwide subject to certain exceptions. While CPAs are known by the general public in part for their tax expertise and for "doing the books" of small organizations, they are uniquely educated for the attestation function discussed above. Because accountants are educated on the foundational levels of a business, they are commonly called upon for general business knowledge. Due to a rise in technology over the past few decades, accountants have been able to better use the time once sacrificed to tedious manual record keeping. CPAs are not solely "number crunchers" but also work as analysts or upper management executives in many varied disciplines in addition to finance. Although CPAs serve as business consultants, the consulting role is under scrutiny following the corporate climate in the aftermath of the Enron Scandal . In audit engagements, CPAs are (and have always been) required by professional standards and Federal and state laws to maintain independence (both in fact and in appearance) from the management staffs of the organizations they audit. CPA EXAM The Uniform Certified Public Accountant Examination (CPA exam) was developed and is maintained by the American Institute Of Certified Public Accountants (AICPA), and is administered by the National Association of State Boards of Accountancy. The CPA exam is used by the regulatory bodies of all fifty states plus the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. Until the 1990s, the CPA exam was a 19 and a half hour test given over a three day period, consisting of four parts: Auditing (3.5 hours); Business Law (3.5 hours); Theory (3.5 hours); and Practice (9.0 hours). The exam was given in May and November of each year. Test takers were allowed to use only paper and pencil (no electronic calculators or computers of any kind). In the 1990s, the exam was converted to a two day exam, in four sections (with electronic calculators being allowed):
Since April 5 , 2004 the exam has been entirely Computer based. Research skill as well as use of Word Processing and Database software is required. The year is divided into four windows. In each three-month window the candidates can take any number of the sections, once for each section on a window, in the first two months (January and February, April and May, and so on). The sections have been reorganized as follows:
Multiple-choice questions comprise approximately 80% of the exam, while the other 20% consist of simulations. Accounting knowledge is tested in simulations through a variety of tasks, some of which require searching databases, completing written communication exercises, and working with spreadsheets and forms. The skills that simulations are intended to measure are: analysis, judgment, communication, and research. In all simulations, candidates are presented with a situation and instructed to write a letter or memorandum on a specific topic. Written communication responses are scored on the basis of three criteria:
Responses that do not address the assigned topic are not scored. In Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), and Regulation (REG), multiple-choice testlets account for 70% and simulations 30% of the score. The 30% simulation portion is further divided into 10% for written communication and 20% for all other parts of the simulation. In Business Environment and Concepts (BEC), multiple-choice questions account for 100% of the score. The new exam will be offered up to six days a week, during two out of every three months. The results are available within 60 days after taking the exam. Each credit for a passed section is valid for 18 months. Thus, a candidate must pass all four sections within an 18-month period. If all four sections are not passed within an 18-month period, sections passed outside the 18-month period must be retaken. The score represents the candidate's overall performance on the identified examination section. Scores are reported on a numeric scale of 0-99, with 75 as the passing score. The scale does not represent "percent correct." A score of 75 indicates examination performance reflecting a level of knowledge and skills that is sufficient for the protection of the public. OTHER LICENSING AND CERTIFICATION REQUIREMENTS Although the CPA exam is uniform, licensing and certification requirements are imposed separately by each state's laws and vary only by State . Some states have a 2 tier system where by an individual would first become certified as a CPA -- usually by passing the CPA exam. That individual would then later be eligible to be licenced once a certain amount of work experience is accomplished. Other states have a 1 tier system whereby an individual would be certified and licenced at the same time when both the CPA exam is passed and the work experience requirement has been met. Aside from passing the CPA exam, states typically require:
As of early March 2006, all U.S. jurisdictions except California , Colorado , Delaware , New Hampshire , Pennsylvania , Vermont , the U.S. Virgin Islands and the Commonwealth of the Northern Mariana Islands had a form of the "150 hour rule," and Pennsylvania appeared close to adopting the requirement as well. {Link without Title} An accountant is required to meet the legal requirements of any state in which s/he wants to practice. Also, the term "practice of public accounting" and similar terms are given definitions that vary from state to state. The practice of public accounting under state law often includes the signing of audit reports and the performance of other services, such as tax or management consulting, while holding oneself out as a CPA. Some states also require an additional exam, generally in state rules and ethics, before being licensed in the state. EXTERNAL LINKS
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