While there are several organizations involved in the CPA licensing process, the state boards of accountancy are the only ones with the authority to award the CPA license. The state boards are also the only CPA governing bodies that you have a choice to work with during the process of earning the CPA. Before you can take the CPA Exam (one of the CPA requirements), you must choose to which state board you will apply. To help you make this decision, you should answer the following questions.
Choosing a CPA State Board
- In which state will you reside/practice?
The state board you choose will issue your license. You must be licensed in the state in which you wish to practice. When you are determining where to register to take the CPA Exam, first consider where you want to practice. If you decide to register for the exam in a state other than the one you want to practice in, check to see if you will be eligible to transfer scores between the two states and if you have met the state’s requirements for licensure.
- What is the application process?
Before deciding where you will apply, you may also need to gather application information from several state boards because the application process varies by state. Some state boards allow candidates to apply via CPA Central, one of NASBA’s CPA Examination Services (CPAES). With other state boards, you can access their applications by visiting their websites or by calling to request an application be mailed to you. As many state boards have age, citizenship, residency, Social Security, experience, and/or educational requirements, they expect you to provide documentation proving that you meet these requirements.
- What are the educational requirements?
Before allowing you to sit for the CPA Exam, almost all state boards require you to earn 120 semester hours (the equivalent of a bachelor’s degree). As soon as you complete your state board’s requirements to take the exam, you should sign up and begin studying.Before awarding the CPA license, every state board except the U.S. Virgin Islands requires you to fulfill the 150-hour rule by accumulating an additional 30 semester hours of education. State boards typically expect at least 24 of these 150 semester hours to be in accounting, and some state boards require coverage of specific topics, such as accounting, auditing, etc.
Examples of educational paths by which some state boards allow you to satisfy the 150-hour rule include:
- Acquire all necessary hours at the undergraduate level
- Obtain a bachelor’s degree and take additional courses at the graduate level
- Earn a master’s degree
- Combine an undergraduate degree in accounting with a master’s degree in a different discipline
- Combine an undergraduate degree in a different discipline with an accounting master’s degree
- Earn an MBA with an accounting concentration
- Obtain a master’s degree in accounting from a five-year accounting school or program
- Is an ethics exam required?
Along with the CPA Exam requirement, most state boards also have an ethics exam requirement. The purpose of the ethics exam is to prove that you are an honest and respectable citizen who will uphold principles as a CPA. While some state boards administer their own ethics exam, most utilize the Professional Ethics Exam administered by the AICPA.
- Is it a two-tier state?
After you pass the CPA Exam, some state boards will award you a certificate acknowledging that you have passed the exam but not granting you the full privileges of a CPA. You must continue to complete the licensure requirements after passing the exam in order to obtain the CPA license. If you receive a CPA certificate, you may use “CPA” after your name, but you may not practice public accounting. Furthermore, state boards typically require you to include “Not in public practice” after “CPA.”
A state board that enables you to obtain the CPA certificate and license at the same time by passing the CPA Exam and meeting the experience requirements is called a “one-tier” state. “Two-tier” states award you a certificate once you pass the CPA Exam and issue the CPA license once you have fulfilled the experience requirements. The requirements of a two-tier state board can be more complicated and require careful research before applying. The remaining two-tier states are Alabama, Kansas, Nebraska, and Oklahoma.
- What are the CPE requirements?
If you do not intend to remain in public accounting long-term or you do not need a license for your accounting practice, you will want to keep continuing professional education requirements (CPE) in mind as you choose a state. You may wish to register for the exam in a state that has a CPA certificate separate from its license to practice and where you must only fulfill CPE requirements if you want to maintain your license to practice. Seven state boards (Alabama, Connecticut, Hawaii, Kansas, Montana, Nebraska, and Oklahoma) are two-tier states; they issue CPA certificates that are separate from the license to practice. Some of these states do not require public accounting experience to receive the CPA certificate, CPE of their CPA certificate holders, or residency to sit for the CPA Exam.
- What are the experience requirements?
Experience requirements differ, but the majority of state boards expect you to collect at least two years of experience in public accounting before receiving the CPA license. Some state boards accept accounting experience in areas of industry or government, but they generally require a longer period.
- What are the exam fees?
Taking the CPA Exam comes with a variety of costs. The state boards determine an initial application fee that ranges from a few dozen dollars to a few hundred dollars. While NASBA has established the fee schedule for each section of the CPA Exam, the state boards are able to increase or decrease NASBA’s suggestions as desired. The state boards can also charge a registration fee for a candidate’s Notice to Schedule (NTS). Of the 55 state boards, 52 have a registration fee that either comes at a flat rate or varies depending on the number of exam parts for which you want to sit. If a state board includes an ethics exam among the licensure requirements, then you will also face a fee for taking the AICPA’s ethics exam or the state board’s version. Finally, the state boards also assign a price to the CPA license itself, which can cost anywhere between $50-$300.
- Is the state a NASBA state?
NASBA offers CPA Examination Services (CPAES) to the state boards of accountancy, and 24 of the state boards have taken NABSA up on this offer. Through CPAES, NASBA handles tasks such as application processing, credential evaluation, score reporting, and more on behalf of the state boards. If your state board has aligned with NASBA in this way, you can accomplish some of the CPA processes by working with NASBA instead of the state board.
- Does the state accommodate international candidates?
Just like national candidates, international candidates must acquire their CPA licenses from the state boards. Therefore, international candidates must also choose which state board they want to work with, but the pool of state boards recommended for international candidates is small. About 10 state boards have requirements suitable for international candidates, so international candidates can narrow down their state board options by working with this list.
Choosing a CPA Review Course
Keeping these questions in mind as you choose a state board can help simplify the decision, but this process still requires dedicated time and thought. Another CPA decision that requires careful consideration is the review course you will use to prepare for the CPA Exam. The best CPA review for you is one that fits your learning style, thoroughly covers the exam content, and employs the most effective learning techniques. Gleim CPA Review adapts to your study preferences and your knowledge strengths and weakness with our innovative SmartAdaptTM technology. Our course also offers the most exceptional coverage of the exam content and the most emulation of the exam testing environment. As the leader in accounting exam prep for 40+ years, Gleim has helped candidates pass more than 1 million CPA exams. See how Gleim CPA Review will prepare you better than any other course by accessing our free CPA demo today!