Certified Public Accountant (CPA)

Written by True Tamplin, BSc, CEPF®

Reviewed by Editorial Team

Updated on March 11, 2023

Define CPA in Simple Terms

A Certified Public Accountant or "CPA" is the designation for public accountants who are licensed to practice in the United States.

A public accountant is an individual who performs accounting-related work on behalf of external clients, often for regulatory purposes.

The interests and standards of the profession are centrally guided by the American Institute of Certified Public Accountants or "AICPA."

How Do CPAs Work?

Large public companies enlist the help of CPA firms annually in order to provide the SEC with audited financial statements and the IRS with their corporate tax return.

CPA's play an important role in giving confidence to investors to trust the financial statements they are analyzing.

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CPA License Requirements

Each state has their own CPA board which determines the requirements of obtaining licensure, but typically, CPAs must have the following:

  • 120-150 school credit hours
  • One-full year of experience with an established CPA firm
  • Pass four standardized tests in the areas of Financial Accounting, Taxation, Auditing, and Business Concepts

Sarbanes Oxley Act of 2002

The independence of CPA's in relation to the clients they serve is one of the most important foundations of the profession.

In 2002, independence was compromised as a "Big Five" firm, Arthur Andersen, willfully destroyed documentation which proved Enron's accounting fraud and became one of the largest accounting frauds in history.

In response, regulators passed the Sarbanes Oxley Act of 2002 which largely shapes the CPA-client relationships and auditing standards of today.

Careers for CPAs

Because of their knowledge of financial accounting and critical thinking skills, common career paths for CPAs include CPA Firm Partner, Controller, Chief Financial Officer, Consultant, Financial Analyst, and Forensic Accountant.

Certified Public Accountant (CPA) FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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