What Is a CPA? Definition, Credentials & How to Become One

A CPA (Certified Public Accountant) is a licensed accounting professional authorized by a state board of accountancy to provide public accounting services. To earn the CPA credential, candidates must pass the four-part Uniform CPA Examination, complete 150 semester hours of college education (typically a bachelor's degree plus 30 additional credits), and fulfill one to two years of supervised work experience under a licensed CPA.

The CPA license grants exclusive rights that other accountants do not hold. Only CPAs can sign audit reports for publicly traded companies, represent taxpayers before the IRS in all matters (including audits, collections, and appeals), and issue attestation opinions on financial statements.

Accountants without CPA certification can prepare tax returns, maintain books, and offer consulting, but they cannot perform statutory audits or represent clients beyond IRS correspondence audits. CPAs hold a state license that requires continuing professional education (CPE) each year—typically 40 hours annually—and adherence to a strict code of professional conduct enforced by state boards and the American Institute of CPAs (AICPA).

The table below compares core differences:

CPAs work across public accounting firms, corporations, government agencies, and nonprofits. Core services include:

Audit and assurance. CPAs examine financial statements to provide an independent opinion on whether they present fairly in accordance with accounting standards (GAAP or IFRS).

Advisory and consulting. CPAs guide mergers and acquisitions, business valuations, internal control design, forensic accounting, and financial planning.

Attestation services. CPAs issue compilation, review, and audit reports required by lenders, investors, and regulatory bodies.

Becoming a CPA requires planning, time, and commitment. Follow these steps:

1. Earn 150 semester hours of college credit. Most states mandate 150 credits (a typical bachelor's is 120).

3. Apply for and pass the Uniform CPA Examination. The exam has four sections—Auditing and Attestation (AUD), Financial Accounting and Reporting (FAR), Regulation (REG), and Tax Compliance and Planning (TCP)—administered via computer at Prometric centers.

4. Complete supervised work experience. States require one to two years (typically 1,500-2,000 hours) of accounting experience verified by a licensed CPA.

6. Maintain your license with continuing education. CPAs must complete CPE hours (commonly 40 per year or 80-120 over two to three years) and renew their license periodically to stay active.

For more on advancing your career, explore our [/career-and-income](/career-and-income) resources.

Senior and manager-level CPAs in public accounting firms earn $90,000-$140,000. Partners at Big Four or regional firms can exceed $200,000 annually, plus profit-sharing.

Corporate CPAs in controller or CFO roles often command $100,000-$250,000+ in mid-to-large companies.

The CPA designation carries a significant return on investment for most accounting professionals.

Pros: Higher earning potential, greater job mobility, exclusive service rights (audits, IRS representation), credibility with clients and employers, and access to executive finance roles.

If you plan to work in public accounting, pursue a CFO or controller position, or offer tax and audit services independently, the CPA is nearly essential. For accounting roles focused solely on bookkeeping, payroll, or internal cost accounting, certification may be optional but still advantageous for long-term career growth.

Read our [/start-a-business](/start-a-business) guide if you're considering a CPA practice.

Missing the 18-month window. Once you pass your first section, you have 18 months to pass the remaining three. If any credit expires, you must retake that section.

Ignoring state-specific rules. Requirements vary by state. Assuming your home state's rules apply when you work elsewhere can delay licensure.

Choosing the wrong experience. Some states require public accounting experience; others accept industry or government work. Confirm what counts before starting your hours.

Use our [/free-tools](/free-tools) to plan your study schedule and track licensing milestones.

Continuing professional education (CPE) is the core requirement. States mandate 40 hours per year (or 80-120 over two to three years), with at least two to four hours in ethics.

Renewal fees range from $50 to $300 per cycle. Some states also require background checks or peer review documentation if you perform attest services.

The Uniform CPA Examination uses computer-based testing. Each section is four hours long:

• AUD (Auditing and Attestation): Risk assessment, internal controls, audit procedures, reporting.
• FAR (Financial Accounting and Reporting): GAAP for corporations, nonprofits, and governments; financial statement preparation.
• REG (Regulation): Federal taxation (individual, corporate, partnership, estate), business law, ethics.
• TCP (Tax Compliance and Planning): Individual and entity tax, tax planning strategies (launched January 2024, replacing part of REG in the revised exam structure).

Each section is scored on a scale of 0-99; you need a 75 to pass. Scores are not curved; 75 represents a fixed level of competency.

What is a CPA certification vs a CPA license?

There is no separate "CPA certification" in the U.S.—the term CPA always refers to a state-issued license. After passing the Uniform CPA Exam and meeting education and experience requirements, you apply to a state board of accountancy for your license.

How long does it take to become a CPA?

Most candidates take five to seven years from starting college to earning their license. This includes four years for a bachelor's degree, one additional year (or concurrent credits) to reach 150 hours, six to eighteen months to pass all four exam sections, and one to two years of supervised work experience.

Can you be a CPA without a college degree?

What is a CPA's role in tax preparation compared to an Enrolled Agent?

Both CPAs and Enrolled Agents (EAs) can represent taxpayers before the IRS at all levels. CPAs hold a state license covering broader services (audit, attestation, financial reporting), while EAs hold a federal credential focused exclusively on taxation.

Do CPAs need malpractice insurance?

Most states do not legally mandate professional liability insurance (also called errors-and-omissions or malpractice insurance), but it is a practical necessity. CPAs who sign audit reports, tax returns, or advisory opinions face potential lawsuits for negligence.