CPA FAQs

General Questions

What can accountants specialize in?

A CPA can look to specialize in the following areas:

1. Assurance Service (Audit)

This is the most common career choice for a CPA. Every corporation is required to hire a public accounting firm to audit its books to ensure that their financial reports are in compliance with Generally Accepted Accounting Principles (GAAP). An auditor’s role is to examine the financial report through questions, comparison and analysis to make sure the financial statements are presented accurately.

2. Advisory (Consulting Service)

CPAs can offer expert advice on financial planning, corporate finance, mergers & acquisitions, international trade for individuals, businesses, non-profit organizations and government agencies.

3. Tax

CPAs can offer expert advice on tax planning and reporting (both onshore and offshore) for individuals, businesses and not for profit organizations.

4. Other Niche Areas

Information Technology (IT) Services: CPAs with strong computer skills can design and implement advanced accounting systems to improve the efficiency of companies.

Forensic Accounting (investigative accounting or fraud auditing): CPAs can unearth evidence of criminal misconduct through accounting records.

Compliance: CPAs can specialize in auditing for compliance in certain regulation. Many interesting niches like environmental compliance has emerged in recent years.

What is CPA?

CPA is a Certified Public Accountant who is licensed by a State Board of Accountancy. To earn the CPA license, you are required to demonstrate knowledge and competence by meeting high educational standards, passing the CPA exam and completing a certain number of years of general accounting experience. The two most important aspects of becoming a CPA are passing the Uniform CPA Exam and meeting licensing requirements in the state where you want to practice.

CPA offered by AICPA (American Institute of CPAs) is the US equivalent of Indian CA Qualification. AICPA, the world’s largest accounting body conducts the CPA exams

The CPA Exam is a 14-hour, computer-based test comprised of four sections:

  • Auditing and Attestation (AUD) (4 Hours)
  • Business Environment and Concepts (BEC) (3 Hours)
  • Financial Accounting and Reporting (FAR) (4 Hours)
  • Regulation (REG)  (3 Hours)

More About AICPA – The American Institute of CPAs is the world’s largest member association representing the accounting profession, with more than 412,000 members in 144 countries, and a history of serving the public interest since 1887. The AICPA sets ethical standards for the profession and U.S. auditing standards for private companies, nonprofit organizations, federal, state and local governments. It develops and grades the Uniform CPA Examination, and offers specialty credentials for CPAs who concentrate on personal financial planning; forensic accounting; business valuation; and information management and technology assurance. (Source: www.aicpa.org)

Why are CPAs required in India?

CPAs are Certified Public Accountants who after having passed a four part exam administered by  AICPA and met work experience requirements, earn their title and license to practice in one of the 55 states of United States of America. CPA are accountants and trusted financial advisers for individuals and businesses and help plan and achieve their financial goals. Additionally one of the primary functions of a CPA is to provide assurance services, such as financial audit services whereby a CPA would attest that the financials adhere to US GAAP and are reasonably free from material misstatements.

While functioning or role of CPA is the same as an Indian CA, CPA is a profession that is recognized on a global platform. Initially when companies from the US and other global economies were established in India, they hired Indian CAs to meet the compliance requirements of SEC (Securities Exchange Commission of US) and security regulations of other countries. Even Indian companies with a global presence depended on Indian CAs to meet their global compliance requirements. Even though Indian CAs received ‘on the job’ training to produce financials as per US GAAP and IFRS standards, it was  challenging for them to meet and keep up with the complex and changing requirements set by SEC.

This is where CPAs came into the picture. Qualified CPAs have knowledge of US GAAP and IFRS but also have the ability to lend credibility to the prepared financial statements and in meeting the requirements set by SEC. With the increase in F&A outsourcing (Finance and Accounting) to India in the recent times, the need for qualified CPAs has increased multifold. Currently CPAs are required in US Consulting firms that have offices in India (primarily big 4: Deloitte, PWC, E&Y and KPMG). CPAs are also required in multinational companies spread across various sectors of business. Last but not the least, Indian companies with US presence also need CPAs to prepare financials and provide assurance services according to US GAAP and SEC requirements.

The above trend is an opportunity for Indian accounting graduates to pursue a certification that gives global recognition and a lucrative salary base. Indian CAs are at a unique advantageous position to pursue CPA because they already have professional accounting knowledge . All they require is the credibility which they can achieve by writing the 4 part exam and getting the license.


CPA Exam - Starting the Process

Do I get the CPA qualification immediately after the CPA exam?

No. You are required to fulfill the 4Es to obtain the CPA qualification.

Given the limited supply of CPAs in India, what do MNCs and Big 4s do?

The demand for CPA has considerably grown in recent times with the growth in MNCs and outsourcing of F&A (Finance & Accounting) work from Big4s in India. Consequently, the requirement for candidates with knowledge in US GAAP, IFRS, US Compliance and Taxation  has risen. The job market in India is inundated with Indian CAs  who are hired for these job roles and though they are able to perform with adequate training on these varied job roles, they are not able to lend the credibility of a CPA. This is one of the primary reasons that the demand for CPA’s has increased in India. MNCs and Big 4s are constantly on the look-out for CPAs. Many of them also sponsor their professionals to pursue the CPA course.

What are CPA exam requirements

There are 55 states and jurisdictions in the United States. Each of them has a state board of accounting, which sets the accounting rules and regulations on its own. Because of this, the CPA exam and licensing requirements are often quite different, and this can cause a lot of confusion to candidates.

The AICPA and NASBA have worked hard to bring the rules in line. The vast majority of states are now following the 4E’s

Education: 4-year bachelor’s degree and above. In other words 120 credit hours of general education

Exam: The 4-part Uniform CPA Exam

Experience: 1-2 years of relevant work experience under a direct supervision of a CPA and/or experience verified by CPA or equivalent

Ethics: Compliance with ethics course work required towards obtaining CPA license

*CPA License requires an additional 30 credit hours (Refer 5.1 & 5.2 for more information on the additional 30 credit hours

What are CPA exam requirements for International Students?

International candidates are eligible to qualify as U.S. Certified Public Accountants (CPAs) as long as they meet Board of Accountancy eligibility requirements in one of 54 U.S jurisdictions – the 50 states, District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam. (The 55th jurisdiction, the Commonwealth of Northern Mariana Islands, is not yet ready to accept CPA applicants).

Candidates must be able to take the CPA Examination in English. (It is not available in any other language).

Qualifying through a board of accountancy is the ONLY route to the CPA designation. There is NO central professional body in the U.S. through which candidates may qualify as CPAs.

The application process is basically the same for U.S. and international candidates alike. Prospective candidates must select the U.S. jurisdiction to which they will apply, contact the Board of Accountancy in that jurisdiction to obtain application materials, submit completed application and required fees as instructed, and once deemed qualified, schedule the examination. Any special requirements that international applicants must meet (such as arranging for an evaluation of their educational credentials by an agency approved by the board) are explained in accountancy board application instructions.


CPA Exam - The Most Efficient Way to Apply

How long does it normally take to pass all parts?

The recommended study hours is 1,000 over a period of approximately 1 year.

Miles advocates the unique iCPA delivery model that ensures needed discipline to be a CPA

“i” for Interactivity – Miles Class room sessions ensure continuing interactivity and communication between the faculty (a CPA with significant industry experience) and students. Additionally, Miles national instructors are available at the start of every session too.

“C” for Concepts – Pre-recorded concepts delivered solely by the National Instructor.

“P” for Practice Questions – Test your understanding of concepts, with practice questions taken “up “live” by the Local Instructors)

A” for Annotations – To ensure in-depth understanding of concepts, annotations pre-recorded by the National Instructor guides you in highlighting and notes on the books

The classes are conducted throughout India in the following manner:

  • Miles Concept Books in exam-focused notes format and including multiple aids for conceptual understanding and memory
  • Miles Online Test Bank which is one of the best available resources for practice questions & mock exams
  • 200+ hours of classroom training spread over 24 Sundays’ using Miles’ unique “iCPA” training delivery model
Should I take all 4 exams together or one by one?

No. The candidates can take the 4 exams in any preferred order. Depending on the level of preparation and other factors such as logistics, leaves and cost, candidate can choose to appear for all 4 exams in one window or one in each window or any other combination as suitable.. Aim must be to complete all four parts before the credits begin to expire.

Note the credits provided for subjects that are passed, expire within 18 months of release of credit. Candidates must pass the remaining subjects within the 18 month period, to avoid this.  Once you have successfully completed all four sections of the Exam, your credits will not expire.

When should I take the test / What is the testing window?

The CPA exam can be taken in 8 out of 12 months in an year. Candidates are allowed to take the exam anytime during the first 2 months of every quarter since the test became 100% computerized on April 2004.

The first two months of each calendar quarter is open for testing. March, June, September and December are closed for testing.

Candidates can pick the time and day within the testing windows. Exams are held in authorized Prometric testing sites. Opening hours are Monday to Friday in most of the sites and sometimes even Monday to Saturday.

More about Prometric Centers

The Uniform CPA Examination is delivered in a computerized format at over 300 Prometric test centers across the United States.

Administration of the Uniform CPA Examination began in the Middle East in August of 2011, with testing available in Bahrain, Kuwait, Lebanon and the United Arab Emirates. Qualified candidates from India now are able to travel to take the Exam at any of the Middle East locations. The Uniform CPA Examination in the Middle East is open to all qualified citizens and permanent residents of India beginning October 1, 2014.


Qualification Questions

I have a 3-year bachelor degree. Do I qualify?

Generally, most Indian B.Com graduates are eligible to take the CPA exams. For non-eligible candidates, Miles CPA Review facilitates a Post Graduate Diploma in Accounting & Finance as a bridge course.

Minimum education requirements for US CPA exams and license:

CPA Exam – 120 Credits

CPA License – 150 Credits

Every year of university education in India is equivalent to 30 semester credits of US education.

Using 1 year = 30 credits,

B.Com = 3 years x 30 credits = 90 credits

Exception: If B.Com is completed in 1st division from a NAAC ‘A’ university, the 3-year B.Com would be treated as 4 years of US education, i.e., 120 credits for B.Com alone.

B.Com + M.Com/MBA = 90/120 credits + 60 credits = 150/180 credits

B.Com + CA/CS/CWA = 90/120 credits + 60 credits = 150/180 credits

CA/CS/CWA recognized by few states as 2 years of US education

If Not Eligible candidate may go through the 1-year Post Graduate Diploma in Accounting facilitated by Miles CPA Review i.e for the candidate with

-B.Com from non-NAAC A university and/or without 1st division

-Non-B.Com graduates – Generally, not eligible due to lack of adequate accounting credits. However, few courses like BBA, BBM, etc. may be eligible and are reviewed on a case-to-case basis

What should I do if I need extra credit hours to reach the 150-hour requirement?

Many colleges and universities offer bachelor’s and master’s degree programs in accounting. To obtain 150 semester hours of education, students do not necessarily have to get a master’s degree. They can meet the requirement at the undergraduate level or get a bachelor’s degree and take some courses at the graduate level.

Credits may be obtained by pursuing relevant courses from a regionally accredited college, university and similar educational institutions . Depending on the education institution, the course may be taken online/long-distance or in campus. As the process of choosing the right course to obtain the 150 credit hours is complicated and time consuming, we at Miles Education, give you complete guidance on bridge courses to be obtained based on the State Board with which you have applied for your examination and/or certificate.


CPA vs CA

Only 4 Exam Parts – “Culture-shock” for CA candidates!!!

CPA exams have four papers, single-level exam which consist of:
FAR – Financial Accounting & Reporting
AUD – Auditing & Attestation
REG – Regulation
BEC – Business Environment & Concepts

The aforesaid four subjects,  cover the entire gamut of financial and public accounting. Additionally, CPA offers a professional advantage by enabling candidates to apply accounting concepts to real world scenarios. On the other hand CA has around 16 papers,divided in three levels i.e.

Common Proficiency Test (CPT)
Intermediate (Integrated Professional Competence) Course
Final Course

Each level covers each topic in depth.  CA offers a sea of knowledge in accounting, however many of these concepts are applied in real life job scenarios. Quite often, CAs tend to stay in a single area of accounting application, leading the other areas unused.Additionally, Big4s like Deloitte, PWC, EY, KPMG or multinational companies like Ranbaxy, Pepsi Co, Nestle, Citibank or the banks like ICICI, HDFC who raise money from USA capital markets are registered with SEC are required to present their financial statements as per US GAAP for which they need a CPA.

Overview

CPA (US) is equivalent to CA (India) with lesser papers and exams. Students can earn the same level of knowledge and greater credibility by pursuing CPA

CPA exams are conducted by AICPA whereas CA exams are conducted by ICAI (Institute of Chartered Accountants of India).

CPA provides broader acceptance, with recognition across the globe. In contrast, CA is recognized only in India and the Middle East.

CPA covers US GAAP & IFRS, while CA covers Indian GAAP. The primary motive for developing IFRS by IASB is to develop a single set of high quality, understandable, enforceable and globally accepted financial standards based upon clearly articulated principles. CPA syllabus covers IFRS extensively and gives a very good comparison between US GAAP and IFRS. It also gives guidance as how to convert financial statements from US GAAP to IFRS. CA syllabus has very few insights on IFRS and students need to go through a separate course on IFRS and conversion of financial statements from Indian GAAP to IFRS. With a steep increase in the number of multinational companies there is a lesser supply of CPAs as required by them.

Passing percentage of CPA is quite high compared to CA so it is a motivation for the students to approach for the CPA course.

SUMMARY –

Institute American Institute of Certified Public Accountant (AICPA), US Institute of Chartered Accountant of India (ICAI), India
Course Duration 1 year 4-5 years
Accounting Standards US GAAP, IFRS Indian GAAP
Recognition US, India & Global India
Academics 4 Papers, Single-Level Exam 16 Papers, 3-Level Exam
Work-ex 1 Year in Accounting/Finance 3 Years Articleship under CA
Passing % 40-45% approx. 5-6% approx.

Questions on Life after CPA Exam

How are the job opportunities in India, with a US CPA?

After liberalization, American companies like GE Capital, JP Morgan, Ford Motors, General Motors, Microsoft, Oracle, Coke, Pepsi have set up shop in India. They require professionals who have thorough knowledge of U.S GAAP.

Indian corporates like Infosys, ICICI, Wipro, Satyam, Reliance, HDFC Bank have issued ADR’s in U.S.A. Due to the listing requirements of the Securities Exchange Commission (SEC, U.S.A) these companies need to get their financial statements audited by CPA’s. Every quarter, these companies are required to send their financial statements to SEC. These financial statements have to be presented according to U.S GAAP, hence these companies require CPAs with thorough knowledge of U.S. GAAP.

Public Accounting firms in India like Pricewaterhouse Coopers, KPMG, Ernst & Young, employ CPA’s to do U.S. GAAS audit. All U.S companies as well as Indian companies listed in U.S have to get their financial statements audited by specialists who have thorough knowledge of U.S GAAS and U.S GAAP. A CPA designation confirms knowledge of U.S GAAP and U.S GAAS.

This is a clear evidence that the requirement of CPAs in India is growing immensely

I am done with the exam. What’s next?

Firstly, Congratulations on clearing your CPA exam.
Once the Exam has been cleared, it’s time to get the CPA License. (Please refer to the next section for the Licensing requirements)
After the License has been acquired, it is required to achieve the CPE credits towards maintaining the CPA license.
Continuing Professional Education (CPE) is required for CPAs to maintain their professional competence and provide quality professional services. CPAs are responsible for complying with all applicable CPE requirements, rules and regulations of state boards of accountancy, as well as those of membership associations and other professional organizations.

Most states require a candidate to obtain no less than 80 hours of CPE over a rolling two-year period, beginning from the date that their license is issued. Most employers offer their employees either in-house or external CPE help.

Now that I am a US CPA, am I eligible for a job opportunity in US?

CPA is not a visa to US. However, being a CPA will surely open doors for new opportunities both in India and abroad.


Licensing Issues

CPA licensing requirements at a glance

The most common licensing question is whether licensing is necessary if the candidates don’t plan to practice as a CPA in the US.

And the answer is – if you want to put “CPA” behind your name on business cards and résumé, you must have a license.

“ONLY” Miles helps you get there: To apply for the license, you must have work experience under a CPA or verified by a CPA. This is one of the most critical requirements for international candidates because of the 3 years rule and “Miles” is the only review course provider in India with licensed CPA’s who can authorize your work experience.

As a general rule, to apply for the CPA license, one has to meet the four “E” parameters.

E – Examination
E – Education
E – Experience
E – Ethics

Based on the four “E” parameters, Miles guides you in the selection of state board, credits to be obtained and end to end service to obtain license & achieve CPA designation.

Do CPA exam credits expire?

No. Once you have successfully completed all four sections of the Exam, your scores will not expire.
As per regulations, for CPA exams taken in international locations (like Dubai, UAE), the exam credits would lapse unless the candidate is able to get the CPA license within 3 years after clearing the CPA exams.


CPA @ Miles

Miles vs. Competitors

The path to the CPA designation is generally considered time consuming, difficult and expensive. To successfully complete this process you need to develop and follow a disciplined structured study program. So choosing the right CPA review course is the most important decision you have to make on the path to your CPA designation. Miles CPA Review is the largest provider of CPA classroom training in India. Led by India’s favorite CPA instructor (Varun Jain, CPA, CMA), Miles provides the best in-class study material and a unique delivery model – iCPA.

“CPA training in Miles is spread across 24 sundays, for approximately 6 months. Apart from the time spent in class, candidates must diligently spend time on their own studying the underlying concepts and practicing questions for each of the parts. The total suggested time for preparation of this course is 1,000 hours (including classroom and self-study) spread across 12 months”

Let’s compare Miles CPA Review with  Competitors

Miles CPA Review vs. US-course provider(s) – Indian franchise

Miles CPA Review US-course provider(s) – Indian franchise
Indian presence Company-owned indigenous presence pan India Franchise-based model (with little brand ownership)
Training Delivery Board Training for Concepts (40%) + Annotations (20%) + Practice Questions (20%) + Interactivity (20%) Focus on Annotations only; No board training for concepts, very few practice questions and negligible interactivity
Pass Rate Over 70% pass rate in 1st attempt N/A
Assistance & CPA license Only review course provider in India with licensed CPAs (including Varun Jain himself) who are authorized to verify the accounting/finance experience of candidates to help them achieve their CPA license Absence of licensed CPAs who are authorized for experience verification – becomes a question mark as candidates may even end up losing their exam credit in 3 years of clearing the exams if they don’t get their CPA license
Placements Via the Student network & relationships coupled with Corporate relationships/connects Minimal Student relationships & Corporate connects
Roadmap to CPA = 12 months

CPA offered by AICPA (American Institute of CPAs) is the US equivalent of Indian CA Qualification. The CPA examinations are conducted by the AICPA (American Institute of CPAs) which is the world’s largest accounting body.
Step by step roadmap to become a CPA in 12 months:

  1. Decide to be a CPA
  2. Prepare for the exams
  3. Qualify & Apply for Exam
  4. Clear the CPA Exam
  5. Meet License Requirements
  6. Become a CPA

The Uniform CPA exams comprises of only four parts and a single level exam which can be completed in 12 months. Further, CPA exams are “objective” – format of Multiple Choice Questions & simulations:

  1. FAR – Financial Accounting & Reporting – This section covers knowledge of generally accepted accounting principles for business enterprises, not-for-profit organizations, and governmental entities, and the skills needed to apply that knowledge.
  2. AUD – Auditing & Attestation – This section covers knowledge of auditing procedures, generally accepted auditing standards and other standards related to attest engagements, and the skills needed to apply that knowledge.
  3. REG – Regulation – This section covers knowledge of federal taxation, ethics, professional and legal responsibilities, and business law, and the skills needed to apply that knowledge.
  4. BEC – Business Environment & Concepts – This section covers knowledge of general business environment and business concepts that candidates need to know in order to understand the underlying business reasons for and accounting implications of business transactions, and the skills needed to apply that knowledge.