What Is a CPA and How Do I Become One?

A chartered professional accountant (CPA) is an accounting professional who has met certain education, exam, and experience requirements for licensure by CPA Canada. To become a CPA, you’ll need to pass an exam demonstrating you have mastered the technical skills necessary to provide services for financial accounting, financial reporting, auditing, attestation, regulations, business environments, and business concepts.

CPAs are highly sought after by businesses and nonprofit organizations because they have extensive training in tax law, auditing procedures, management practices, and other important aspects of business financial operations.

What CPA stands for

CPA stands for chartered professional accountant. It's a designation that gives accountants high credentials in Canada, allowing them greater job opportunities and responsibilities. You have to have earned your professional designation through CPA Canada to advertise as a CPA.

Is CPA a certificate, degree, or license?

CPA is a credential that allows you to practice as an advanced accountant. To obtain a CPA credential, you must participate in the CPA Professional Education Program (CPA PEP), including completing a capstone project. After you’ve gained enough experience, you’ll be eligible to sit through the Common Final Exam (CFE).

CPA vs. accountant

All CPAs are accountants, but not all accountants are CPAs. A CPA is a financial professional credentialed by CPA Canada to provide accounting services to public, private, and governmental agencies. A CPA performs accounting duties such as tax preparation, auditing, and consulting. An accountant is an individual who professionally practices accounting.

As a CPA, you have demonstrated advanced accounting competencies. Therefore, you can take on additional duties related to the Canadian Revenue Agency (CRA) and Canadian Securities Administration (CSA) that not all accountants can perform.

What does a CPA do?

Like most accountants, CPAs perform a wide range of accounting, auditing, tax, and consulting work for corporations, small businesses, non-profit organizations, governments, and individuals.

When you become a CPA, you can be responsible for preparing financial statements for your clients and filing reports with the CSA. You'll also represent clients before the CRA to help them resolve their tax problems. As a CPA, you may supervise other professionals. 

As a chartered professional accountant, you can work with individuals and businesses in various industries, advising on financial and tax-related matters. You may choose to specialize in a particular area, such as taxes, or working within an industry like health care. Alternatively, depending on your career path, you can focus on a wide spectrum of accounting services. 

As an accountant, your job duties may depend on the business size, experience, and the industry. However, you will likely find yourself doing some of the following:

• Maintaining records and preparing financial documents

• Preparing tax returns for companies, organizations, and individuals

• Consulting with management on financial matters

• Identifying financial discrepancies and areas for improvement within the company’s internal processes, policies, and procedures

• Conducting forensic accounting for audits

• Advising on the financial risk involved in taking on new projects or mergers, retirement planning, and other financial decisions

Benefits of becoming a CPA

CPA credentialing is a well-recognized professional accountancy qualification. The prestige and respect associated with being a CPA can offer you various exciting career opportunities.

Here are some of the benefits you can expect by getting your CPA:

• Earn more money: On average, CPAs earn more than non-CPAs with similar education and experience. According to Indeed, CPAs earn an average base salary of $81,445 [1], compared to an accountant, who earns $62,954 per year [2].

• Increased job opportunities: Becoming a CPA can allow you to pursue many different career paths within the accounting field. You can work as a CPA in public accounting firms, private companies, government agencies, and nonprofit organizations. 

You can pursue management consulting, information technology, education, and financial planning careers. While these may not seem like typical professions for accountants, many industries rely on financial expertise.

• A sense of accomplishment: Passing the Common Final Exam for CPA designation shows you have what it takes to be successful in the profession. It's a challenging exam—an average of 75.8 per cent of first-time test takers pass all four sections [3].

• Credibility: As a trusted business advisor and financial expert, your credibility is essential to your and your client's success. By becoming a CPA, you’re not just showing your clients that you know what you’re talking about; you’re showing them that you’ve been tested on it, too. That’s important because it helps build trust with clients by giving them confidence in your advice.

Skills CPAs need to have

Certain skills are common among successful CPAs. 

• Technical skills: As a CPA, you need extensive technical knowledge to perform the job duties effectively. These include accounting software such as QuickBooks and FreshBooks and tax preparation software such as ReInvestWealth and Sage 50 Cloud. 

• Programming: As a modern accountant, you may also need new technical skills like programming in Python and R, statistical analysis, data mining, and regression. 

• Organizational skills: You need good organizational skills to prepare accurate reports, organize documents, and keep track of deadlines important for tax returns, audits, and other duties. You’ll often have several projects simultaneously, so a system is crucial.

• Critical thinking: As a CPA, you’ll have to see the big picture and think critically. You must analyze data, evaluate it, and then put it into context to provide meaningful, reliable advice.

• Problem-solving: Solving problems is a big part of being a CPA. You’ll be responsible for finding solutions to complex problems and developing strategies that address issues your clients may have with their taxes or business practices.

• Communication: As a CPA, you must be able to clearly and effectively communicate with others, both in writing and verbally. This skill is essential for any CPA working with colleagues, managing employees, or directly with clients.

• Attention to detail: As an accountant, you must maintain accuracy and precision in your work. Every part of an accountant's job has financial consequences for your employer or client, so accuracy is crucial. For example, the company could lose money without realizing it if an accountant incorrectly adds figures to a balance sheet. False reporting may also attract fines.

• Analytical thinking: Some people are naturally good at analyzing data and finding patterns. This skill can benefit your accounting career and help you spot problems with financial records or processes much more quickly than if you were simply going through the books line-by-line.

• Business acumen: Understanding how businesses operate is critical when working as a CPA in any industry. You need to understand the basic business strategies and principles to advise management on how their decisions will affect the company's financial position.

How do I become a CPA?

The path to becoming a CPA starts either by earning a degree or gaining enough experience to qualify for the CPA PEP. You’ll then pass the CFE exam to get credentialed in your province or territory. You’ll also need to complete continuing education to keep your credentials current.

Earn an undergraduate degree.

Earning an undergraduate degree in accounting is one way to qualify for the CPA PEP. But it’s not the only path. If you majored in something else, you can take CPA preparatory courses to get the necessary foundation. 

Undergraduate and graduate programs in accounting provide the basic foundation for meeting the education requirements for earning your CPA designation. These programs introduce you to financial accounting, auditing, and taxation topics at the individual and corporate levels. They also allow you to gain experience using industry-standard computer applications and software.

As an aspiring CPA, you might consider an online accounting degree program. These programs offer convenience and flexibility, especially when working full-time while going to school. They may also provide a flexible or accelerated format. You might like to consider the Online Master's of Accounting (iMSA), offered by the University of Illinois Urbana-Champaign on Coursera.

Gain experience.

Before you’re eligible to take the CPA Exam, you’ll need to work for 30 months in a training program to gain the practical experience required to take the CFE. Conversely, without an undergraduate degree, you must work for eight years in a relevant accounting position to qualify for the CPA certification program. 

Complete the CPA PEP.

Apply for and complete the CPA PEP, six modules of graduate-level education that demonstrate your competence in all areas required to become a CPA. In this course, two modules focus on core skills, two modules are electives based on your interests, and two modules form the capstone projects marking the completion of the program. In many circumstances, the CPA PEP is completed over two years part-time, working around employment that counts toward certification requirements. 

Pass the CFE exam.

The CFE is a three-day exam process covering all of the competencies that professional accountants must demonstrate. You must have completed the previous steps of obtaining an education and gaining experience before you are eligible to sit for the CFE exam. 

Continue your education.

As a CPA, your continuing education credit requirements will vary based on the regulatory agency you are licensed with. In Ontario, for example, you must complete 120 hours of continuing professional development (CPD) every three years. The two main categories of CPE are:

• Programs: Formal courses

• Self-study: Reading journal articles or taking an online course

CPA career opportunities

The diverse business and technical skills you gain as a CPA open the door to various career options. CPAs serving in many different types and sizes of firms, such as the following:

• Large, international accounting and tax firms: These organizations often have offices all over the country and the world. They provide various services, including tax advice, financial consulting, and auditing.

• The Big Four accounting firms: Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and KPMG are the four largest professional services networks in the world. They offer audit, assurance services, taxation, management consulting, actuarial, corporate finance, and legal services to companies.

• Medium-sized firms: These organizations tend to be regional. They might have several offices in different regions. They provide similar services as large firms, but typically on a smaller scale and often have smaller clients.

• Smaller firms: Local accounting practices tend to focus on the needs of smaller businesses in their area. If a small business needs tax advice or an audit, they often contact a small firm for assistance.

• Business and industry accountant: A business and industry accountant is another career path available to CPAs. Business and industry accountants work in companies of all sizes in diverse areas, such as financial accounting and reporting, management accounting, financial analysis, and treasury/cash management.

CPAs work in other sectors too:

• Federal and local government departments offer diverse opportunities for CPAs. 

• Non-profit organizations employ CPAs in many capacities. 

• Education also offers many diverse opportunities in research and teaching.

Specializations

Specializations are also an option for CPAs. With the right experience and training, you can specialize in areas such as:

• Business valuation

• Consulting services (including information technology)

• Corporate taxation

• Employee benefits

• Estate planning

• Financial forensics

• Financial statement auditing

• Forensic accounting and fraud examination

• International operations and taxation

• Investment management

• IT consulting

• Litigation support

• Mergers and acquisitions

• Personal financial planning

• Real estate

• Research and development tax credits

• State and local tax incentives

Salary and career outlook

According to Glassdoor, the average annual income (base salary plus additional commissions and benefits) per year for CPAs is $71,235 [1].

To give you an idea of the annual salaries of other jobs that CPAs can do, here are a few: 

• Public accountant:$71,439 [4]

• Corporate accountant: $69,271 [5]

• Nonprofit accountant:$57,935 [6]

• Internal auditor: $79,221 [7]

• Tax consultant: $60,025 [8]

• Forensic accountant: $83,418 [9]

• Personal financial planner: $88,646 [10]

Next steps

If you want to take your accounting career to the next level, a CPA designation may be what you need. The CPA credential is the gold standard in the profession and can lead to increased earning potential, career mobility, and prestige. 

If you need extra semester hours after your degree, then a master’s degree is a viable option. Postgraduate education can help you be more appealing to employers, too. You can do the Online Master's of Accounting (iMSA), offered by the University of Illinois Urbana-Champaign on Coursera. 

If you are interested in a specialization, consider the Forensic Accounting and Fraud Examination from West Virginia University or Financial Reporting Specialization offered by the University of Illinois at Urbana-Champaign.