Requirements for a Career in Accounting

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Accounting is a crucial function in any business or organization, making accountants highly valuable employees. Accountants work in various fields, including business and manufacturing, and at different organizations, like nonprofits and government agencies.

An accounting degree can prepare graduates for careers in accounting, forensic auditing, business analytics, and more. However, before embarking on this career journey, it's important to understand the salary and career outlook for accountants, as well as the difference between an accountant and a Certified Public Accountant (CPA). Here's a comprehensive guide to help you determine if a career in accounting is right for you.

What Does an Accountant Do?

Accountants prepare financial documents, examine financial statements for accuracy, and evaluate risks and opportunities. They prepare tax returns and ensure financial statements comply with laws or regulations. Accounting professionals also use financial data to suggest improvements or changes in business operations.

Accountants need strong critical thinking, reading comprehension and communication skills. They work with various software applications, including accounting, tax preparation, and financial analysis programs.

Nearly 25% of accountants work in accounting, tax preparation, bookkeeping, and payroll services, according to the Bureau of Labor Statistics (BLS). Most work in office settings, though some companies offer remote work opportunities. Accounting offers entrepreneurial opportunities, as well.

About 4% of accountants own their own firms.

Accountant Salary and Career Outlook

Your salary as an accountant will depend on a number of factors, such as where you live, your educational background, your expertise, and any professional qualifications you hold.

According to the BLS, the annual median salary for accountants and auditors was $78,000 as of May 2022. The highest 10% of wage earners took home over $132,690, while the lowest 10% made under $48,560.

Industry qualifications, like CPA or CMA certification, can increase your earning potential. Where you live can also affect how much you make as an accountant. Accountants in metropolitan areas like the San Francisco Bay Area, Los Angeles, the District of Columbia, and New York City earn some of the highest salaries. However, it is important to note that these cities also have high costs of living.

Accountant vs. CPA

Think of the relationship between a CPA and an accountant as a square and rectangle scenario — all squares (CPAs) are rectangles (accountants), but not all rectangles are squares.

Accountants typically have a bachelor's degree in accounting. However, a CPA is an accountant who has gone above and beyond to meet additional state-specified educational and work experience prerequisites, pass the CPA exam, and uphold a professional code of ethics.

Unlike their accountant counterparts, CPAs can legally undertake specific roles such as preparing audited and reviewed financial statements and advocating for clients in front of the IRS. Moreover, they are held to elevated standards — like the AICPA Professional Code of Conduct — and must engage in continuing education to keep their license up-to-date.

Deciding on an Accounting Specialization

Some accountants enjoy general accounting work, taking on various tasks. Others enjoy specializing in a specific area of accounting to build their expertise. An accounting specialization can help candidates stand out among other applicants. To become a certified public accountant, professionals may be required to select a specific concentration, such as managerial accounting or auditing.

Popular concentrations include:

Some colleges and universities offer concentrations within their undergraduate degree programs. Deciding on a specialization can offer additional career opportunities and potentially higher earning potential. In addition to the standard accounting curriculum, specialized courses and certifications can further develop your knowledge and skills in your chosen area of focus.

If a school only offers a general accounting degree, students can still pursue an area of specialization. Options include taking elective courses or completing internships. Consider how a specialization aligns with career goals, future educational paths, and individual interests.

Required Degree

Most entry-level accounting positions require a bachelor's degree in accounting. This degree takes about four years to complete. Schools may offer a bachelor of arts, bachelor of science, or bachelor of business administration degree. All these degrees meet accountant job requirements.

In addition to general education courses in English, science, and history, accountants focus their studies on accounting and business. Accountant education requirements include courses in generally accepted accounting principles, accounting information systems, and international financial reporting standards.

Most bachelor's degree programs consist of 120 credits. However, certified public accountant requirements include an additional 30 credit hours of study. While curricula should focus on accounting, coursework should also offer a broad view of business operations. Many students choose to take these additional courses at the graduate level. A master's degree in accounting may require only a few more courses.

Required Exams

Passing certain exams is a fundamental requirement for both general accountants and CPAs. General accountants and auditors should take the Certified Management Accountant (CMA) exam or the Certified Internal Auditor (CIA) exam. These exams assess a broad spectrum of competencies, from financial planning to auditing, and are a significant milestone in an accountant's career progression.

For those who aspire to become CPAs, the CPA exam is mandatory. This rigorous exam is designed to test your knowledge and skills in various areas of accounting and business, ensuring you meet the high standards required to practice as a certified public accountant.

You must achieve a minimum score of 75 on each CPA exam section in order to pass. The American Institute of Certified Public Accountants (AICPA) tracks the CPA exam pass rate. In 2023, about 47% of test takers passed the auditing section, 56% passed the financial accounting and reporting section, 56% passed the business environment and concepts section, and 59% passed the regulation section.

Expect to receive results 1-2 weeks after taking the exam. You can retake failed sections, but you must pass all four sections within an 18-month period.

State Requirements for Accountants

Each state has its own set of requirements for CPA licensing, although the common benchmarks include similar education standards, passing the CPA exam, and at least one year of full-time professional experience in accounting. Some states also have a residency requirement and charge a fee for licensing applications.

Beyond the technical and theoretical knowledge, ethics are crucial in the accounting profession. In many states, you'll have to pass the AICPA ethics exam to prove your understanding of your ethical and legal obligations in accounting.

The test can be taken either online or at home. Unlike the CPA exam, the ethics test allows you to use textbooks. However, the test is timed. You must achieve a score of at least 90 to pass the exam.

What is a two-tier CPA state?

In accounting, a two-tier CPA state is one that issues two distinct designations for accountants: a CPA certificate and a CPA license. In these states, after fulfilling the education requirements and passing the CPA Exam, candidates receive CPA certificate.

However, they can only obtain a CPA license after meeting the experience requirement. The certificate grants individuals the privilege to use the title 'CPA', albeit with the clarification 'not in public practice' if they are not licensed. The CPA license, conversely, is a full practice license, permitting the holder to practice public accounting and use the CPA designation without any restrictions.

The states that currently use a two-tier CPA system include Alabama, Connecticut, Hawaii, Illinois, Kansas, Nebraska, and Oklahoma. Each of these states has its own specific regulations and processes for obtaining both the CPA certificate and license, so it's crucial that you check your state's licensing board for information about specific requirements in your state.

Accounting Internships

Internships are valuable components of accounting education requirements. Internships place students in business environments where they work under the supervision of an experienced accountant.

In addition to applying principles learned in a classroom, internships help students grow their professional network and gain work experience for their resumes. Many companies also look to their interns when offering full-time jobs.

Internships may be paid or unpaid experiences lasting a few months to a year. Often, students earn academic credit for their work.

What to Include in Your Accounting Resume

When crafting your accounting resume, it's crucial to highlight your qualifications, experience, and skills relevant to the position you're applying for. Be sure to include your educational background, detailing any degrees you've earned, courses taken, and any honors or awards received.

If you're a CPA, be sure to emphasize this, as it is a highly prized credential in the field. Lastly, don't forget to mention any relevant soft skills you have — such as critical thinking, communication abilities, and attention to detail — which are highly valued in the accounting profession.

Frequently Asked Questions About Requirements for an Accounting Career

Note: The insights on this page — excluding school descriptions — were reviewed by an independent third party compensated for their time by BestColleges. Page last reviewed March 27, 2024.