Certified Public Accountant (CPA) – Definition

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Certified Public Accountant (CPA) Definition

A Certified Public Accountant (CPA) is a professional designation given by the American Institute of Certified Public Accountants referring. It is given to accountants who pass certifying exams and meet the applicable state requirements to become a licensed.

A Little More on what is a Certified Public Accountant – CPA

State Boards of Accountancy determine the laws and rules for each state/jurisdiction. In each jurisdiction, 3 E’s are needed for licensure:

  • Education
  • Exam or Uniform CPA Examination
  • Experience

Requirements differ with the state, but generally:

  • 150 semester hours of Academic Credit
  • Number of accounting hours depends on state requirements (mostly 30 or more)
  • Pass all parts of the CPA Exam

CPA Exam

  • Computer-based format
  • Consists of 4 sections
    • Auditing and Attestation (AUD)
    • Business Environment and Concepts (BEC)
    • Financial Accounting and Reporting (FAR)
    • Regulation (REG)
  • Same test no matter where it is taken
  • Passing score is 75 on a 0-99 scale
  • Question types include multiple choice, simulation, and written communication
  • Eligibility to sit for exam depends on state requirements

Accounting Experience

  • A candidate is an applicant for a CPA license
  • Many states require the candidate to have 1 – 2 years’ experience under a CPA
  • Additional requirements vary by the candidate’s needs.
  • Education – e.g., Graduate degree vs. 150 hours of undergraduate • Employer(s) –
  • Type of work – e.g., Tax professional vs. Auditor


  • Licenses give the right to practice public accounting •
  • Some state requires an ethics exam •
  • Must comply with rules of professional conduct •
  • CPA Exam & Licensure Center

Continued Education

  • Continuing Professional Education (CPE)
    • 40 hours per year – Types (e.g., computer-based vs. group learning) of CPE vary by area requiring an application of Ethics and compliance – Subjects differ relying on the type of license and area of work
  • Renewal of license every 1, 2 or 3 years

Certified Public Accountants mostly prepare income tax or auditing but can also practice forensic accounting, management accounting, and information technology.

Auditors are required to follow a code of ethics. According to federal and state laws, accountants and auditors should be independent when performing their duties

References for Certified Public Accountant (CPA)

Academic Research on Certified Public Accountant (CPA)

  • Overcoming barriers: early African-American certified public accountants, Hammond, T., & Streeter, D. W. (1994). Accounting, Organizations and Society, 19(3), 271-288. The paper contradicts the belief accounting firms in the US have provided opportunities equally. From the interviews obtained from the pioneer African Americans to obtain the CPA, the paper narrates that African Americans were excluded from fully participating in the field.
  • Ethics and professionalism in accounting education: A sample course, Armstrong, M. B. (1993). Journal of Accounting Education, 11(1), 77-92. This article deals with four topics that are related namely; how the ethics should be taught in accounting curriculums, description of accounting ethics and professionalism, a description of test results and implications of the research. The author is insisting on the education of ethics in both accounting courses and non-accounting courses. All over the universities. The results show that there is a significant increase in the average test scores of the treatment group over the control group.
  • The accuracy of interviewers, certified public accountants, and students in identifying the interests of accountants., Hakel, M. D., Hollmann, T. D., & Dunnette, M. D. (1970). Journal of Applied Psychology, 54(2), 115. The study was conducted amongst different groups namely Certified Public Accountants, interviewers, and male graduates to identify the interests of Accountants. The study revealed that there were no much differences in the accuracy between the groups since students have a different perception of the accountant’s interests, unlike the others.
  • Certified public accountants: Ethical perception skills and attitudes on ethics education, Ward, S. P., Ward, D. R., & Deck, A. B. (1993). Journal of Business Ethics, 12(8), 601-610. The study examines how CPAs can recognize and evaluate ethical and unethical circumstances. The results signify that we should distinguish ethical and unethical behaviors. Generally, CPAs tend to position themselves as more ethically-focused compared to their peers
  • The effects of the 150-credit-hour requirement for the certified public accountant (CPA) exam on the career intentions of women and minorities, Bierstaker, J. L., Howe, M. A., & Seol, I. (2005). Journal of Education for Business, 81(2), 99-104. Here, the author is trying to analyze the impact of 150 credit hour requirement on the career of minorities and women and establish that it only prevents women, not the minority.
  • The conflict of professionals in bureaucratic organizations, Sorensen, J. E., & Sorensen, T. L. (1974). Administrative Science Quarterly, 98-106. A study on certified public accountants in huge public accounting firms indicated that when there is bureaucracy, it may result in job dissatisfaction and job migration.
  • Reactions to ethical dilemmas: A study pertaining to certified public accountants, Claypool, G. A., Fetyko, D. F., & Pearson, M. A. (1990). Journal of Business Ethics, 9(9), 699-706. This paper dwells into how certified public accountants perceive ethics.CPA reactions to ethical dilemmas were guided majorly by provisions of the CPA ethics code and you achieve a higher stage moral reasoning when you conform to the ethics code.
  • Ethical reasoning and selection-socialization in accounting, Ponemon, L. A. (1992). Accounting, Organizations and Society, 17(3-4), 239-258. The study goes deep into the works of researchers to examine the ethical reasoning of the CPAs in the profession. Its work is to investigate the influence of accounting firms on an individual’s level of reasoning ethically. In conclusion, the ethical culture of accounting firms motivates an individual’s development to higher levels of ethical reasoning.
  • The financial expertise of CFOs and accounting restatements, Aier, J. K., Comprix, J., Gunlock, M. T., & Lee, D. (2005). Accounting Horizons, 19(3), 123-135. We try to find out whether the features of CFOs are related to accounting errors by looking into several metrics of financial literacy suggested by NYSE-NASD Blue Ribbon Committee. It dwells into the period of work of the CFO and the work experience. It, therefore, concludes that CFO’s with more working experience are unlikely to restate their earnings.
  • The market for public accounting services: Demand, supply and regulation, Benston, G. J. (1985). Journal of Accounting and Public Policy, 4(1), 33-79. The author utilizes agency theory to investigate the market for public accounting services. This theory indicates that owners and their employees gain from monitoring. The demand for public accounting is derived from the fear of outsiders using financial statements for their own interests.
  • Common Law Liability of the Certified Public Accountant for Negligent Misrepresentation, Wiener, H. B. (1982). San Diego L. Rev., 20, 233. The article states that a negligent certified Public Accountant bears his or her own liabilities in cases of misrepresentation.

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