Accounting: Available Licenses and Certifications
Accounting practices build their success on experience, education and compliance with regulatory requirements for certifications in a chosen field of accounting. The licensing process helps ensure that only qualified individuals are authorized to serve the people. Licenses are checked and verified by using the practitioner's name, or license number. Below is a list of credentials for career advancement:
Certified Public Accountant (CPA): This is the most popular professional designation for accountants, and requires "sitting" for the Uniform CPA Exam, which is developed and graded by the American Institute of Certified Public Accountants. The Uniform CPA Examination is one of the "Four Es" - Education, Examination, Ethics and Experience - required for licensure as a CPA. Consequently, passing the examination is not, in itself, sufficient to meet requirements for licensure. Requirements vary by jurisdiction, and are described on the websites of all state Boards of Accountancy, A directory of and links to all of the state boards can be found on the website of the National Association of State Boards of Accountancy (NASBA) .
- Certified Management Accountant (CMA) : This credential is sponsored by the Institute of Management Accountants (IMA), and is only offered to Institute members.
CMA certification results in salaries that are competitive to those with a CPA. The role of management accounting differs from that of public accounting, since management accountants work at the "beginning" of the value chain, supporting decision making, planning and control, while audit and tax functions involve checking the work after the fact. Management accountants are valued business partners, directly supporting an organization's strategic goals.
The CMA credential differs significantly from the CPA designation, and the decision to pursue one over the other depends entirely on individual career goals. For a career in public accounting, the CPA designation is appropriate - and required by state law. However, more than 80 percent of accounting professionals in the United States work inside organizations, building quality financial practices into the organization. IMA's most recent salary survey indicates that accountants with CMA certification earn 24 percent more than those without certification.
- Certified Financial Planner (CFP) assists clients in managing, sheltering and expanding their assets through a comprehensive plan geared toward a client's financial objectives and resources. CFP candidates must pass the comprehensive CFP Certification examination, pass CFP Board's Candidate Fitness Standards, agree to abide by CFP Board's Code of Ethics and Professional Responsibility which puts clients' interests first, and comply with the Financial Planning Practice Standards. These are just some of the reasons why the CFP certification is becoming increasingly recognized.
- Certified Fraud Examiner (CFE) is widely recognized for expertise in the anti-fraud field. Career opportunities abound and more are growing.
Qualifications for certification are as follows:
- Be an Associate Member of the Association of Certified Fraud Examiners (ACFE) in good standing;
- Meet minimum academic and professional requirements with a minimum of a bachelor's degree or the equivalent, and at least two additional years of professional experience;
- Be of high moral character;
- Agree to abide by the Bylaws and Code of Professional Ethics of the ACFE ; and
- Pass the CFE exam.
- Forensic Certified Public Accountant (FCPA) and fraud examination are different, but related. Forensic accounting is done by accountants in anticipation of litigation and can include fraud, valuation, bankruptcy and a host of other services. Fraud examination can be conducted by accountants or non-accountants and refers only to antifraud matters. Thus, the FCPA designation is for CPAs who want to differentiate themselves as forensic specialists. Certification is through the Forensic CPA Society.
- Enrolled Agent (EA) is recognized by the Internal Revenue Service (IRS) to represent taxpayers before all administrative levels of the IRS. Often called the best kept secret in accounting, EAs provide an important and marketable service to the public, government and accounting community. The EA recognition signifies a concentration of competency in the field of taxation.
The Licensing Process
Accountants face stringent compliance requirements when it comes to accounting and auditing standards, the Tax Code and Sarbanes-Oxley. But post-certification career paths are many and varied. Maximizing accounting training is as simple as planning ahead and making some good decisions.
Accounting certifications and professional designations are required to step out into a specialty or independent practice. Trying to understand how to comply with the complex requirements, statutes, rules and regulations of the state boards of accountancy can be difficult and time-consuming.
Key Organizations in the Licensing Process
- The National Association of State Boards of Accountancy (NASBA) serves as a forum for the 55 boards of accountancy. Although individuals must apply for licensure within the state in which they practice, the NASBA provides oversight, review and communications with the boards.
- American Institute of Certified Public Accountants (AICPA) is the national, professional organization for Certified Public Accountants. AICPA seeks the highest possible level of uniform certification and licensing standards and protects the CPA designation.
- State Boards of Public Accountancy Websites provide access to processes needed to practice in that state or province, and links to Board of Accountancy Websites are available on the NASBA Website.
The Uniform Accountancy Act
While not a new document, the NASBA/AICPA Uniform Accountancy Act
(UAA) is constantly undergoing revision so as to keep pace with
the changing economic environment. The UAA contains provisions
that were agreed to by a majority of the state boards of
accountancy. As the name suggests, the act promotes uniformity
to protect the public interest and promote high professional
standards. Its purpose is to clarify a CPA's scope of practice
and to allow CPAs to work across state lines.
As more CPAs provide their services to the public through nontraditional business entities, the law must be clarified for the public to know what type of services will be subject to government regulation.
In light of the collapse of Enron and other corporate
disasters, boards have expanded regulation and are partnering
with boards beyond their own borders, and in tandem with the
Public Company Accounting Oversight Board (PCAOB) and the
Securities Exchange Commission (SEC) to better protect the
public interest. A career in accounting will prove to be
financially rewarding whether one chooses to start as a CPA or
to work in private industry, government service or a nonprofit
entity. Earnings are a function of education, experience and
Each field is continuing to evolve as technology improves and the economic picture changes. Continuing education is the key to keeping up with opportunities and regulation in a growing and competitive industry.