Accounting: Licensing/Certification

Accounting: Licensing/Certification

Accounting: Licensing/Certification

Accounting practices build their success on experience, education and compliance with regulatory requirements 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, 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. Passing the examination is not, in itself, sufficient to meet requirements for licensure. Requirements vary by jurisdiction, as described on the websites of all state Boards of Accountancy. A directory of and links to all of the state boards can be found online at 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. 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, a large majority of accounting professionals in the United States work inside organizations, building quality financial practices into the organization.

    Certified Financial Planner (CFP), administered by CFP Board, identifies to the public that those individuals who have been authorized to use the CFP® certification marks in the U.S. have met rigorous professional standards and have agreed to adhere to the principles of integrity, objectivity, competence, fairness, confidentiality, professionalism and diligence when dealing with clients.

  • Certified Fraud Examiner (CFE) is widely recognized for expertise in the anti-fraud field, showing knowledge in the four primary areas of fraud examination: Financial Transactions & Fraud Schemes, Law, Investigation, and Fraud Prevention & Deterrence. 
  • 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 an Internal Revenue Service (IRS) certification that gives agents the right to represent taxpayers before the IRS by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. Enrolled agent status is the highest credential the IRS awards. Individuals who obtain this status must adhere to ethical standards and complete 72 hours of continuing education courses every three years. Enrolled agents, like attorneys and certified public accountants (CPAs), have unlimited practice rights. This means they are unrestricted as to which taxpayers they can represent, what types of tax matters they can handle, and which IRS offices they can represent clients before. Learn more about enrolled agents in Treasury Department Circular 230 (PDF).

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 Uniform Accountancy Act

The AICPA and National Association of State Boards of Accountancy (NASBA) Uniform Accountancy Act (UAA) is an "evergreen" model licensing law developed to provide a uniform approach to regulation of the accounting profession. The UAA provides a comprehensive system for enhancing public protection, facilitating consumer choice, and supporting the efficient operation of the capital markets.

A model bill to regulate the practice of public accountancy was first published in 1916 by the American Institute of Accountants, the predecessor of the AICPA. In 1984, the AICPA and NASBA published the first joint model bill, later renamed the Uniform Accountancy Act.