Is it Worth it to Become a CPA?

Becoming a CPA is something that a lot of accountants aspire to be, in order to become a CPA, one must pass 4 exams, have 150 college credits, and have 2 years of accounting work experience. The hardest part is passing the exams. While I was studying for the CPA test, I found myself frequently Googling the following phrases: “Is it worth it to pass the CPA test?”, “What benefits do you get from being a CPA?”, and “Can an accountant who is not a CPA do well in his career?" In the end, I concluded that even though you can be a successful accountant without having your CPA, it is better to get your CPA license if you can because of the higher pay, higher recognition, and better stability.

First and foremost, if you are a CPA, you can get paid higher than a non-CPA for a couple reasons. First, you have already proven that you have the knowledge to do the required tasks by having obtained your CPA. In other words, because you have your CPA license, you have more job opportunities, meaning employers will have to pay more to hold on to you. Additionally, a lot of employers will guarantee a bonus or a raise if you pass your CPA exam. Becoming a CPA is such a significant accomplishment, that many companies will pay for your exams, and some companies will even pay for your study material.

Another reason why your pay will be higher if you are a CPA is that you have higher upward mobility. Many of the Big Four and other companies will not allow you to get to a manager position unless you have your CPA license. This is due to two reasons: the first reason is they want to ensure a high quality in their work, and the second reason, I believe, is to encourage their employees to study for those exams, because by preparing for the exam, they become very knowledgeable in their fields. Whether it is tax, audit, auditing, bookkeeping, or financial reporting, you will get better at your job just by studying for the CPA exam!

The second main reason why I would encourage you to pass the CPA exam and get your license is because you will get much higher recognition among your co-workers, your bosses, and your clients.

Your co-workers will automatically view you as more knowledgeable and expect more from you! Now, having high expectations to hit is a double-edged sword, and it could work out very well for you, with your employer giving you more opportunities to improve your career. On the flip side, it could have bad consequences, where they expect too much of you and are let down if you ever fall short of their expectations. Nevertheless, I think it is best to have other people set high expectations for you so that you, in turn, set those high expectations for yourself.

Additionally, you will have better recognition among your potential and current clients. I have repeatedly heard people who had their taxes done for them say something like this: "Yeah, I get my taxes done by so and so; he is not a CPA, but he is still good at his job.” Saying they are still good at their job despite not being a CPA implies that people obviously view CPAs as more knowledgeable than non-CPAs. These levels of recognition from people in your workplace and from your clients make getting your CPA worth it.

The final reason for passing your CPA license is for better job stability. If something like COVID-19 were to happen again and employers were forced to make cuts, it is likely that they cut a non-CPA before a CPA, even if those two employees are being paid the same and are at the same level. Additionally, if you are applying for a new job in the public accounting field or in the corporate field, it is likely that they ask you if you have your CPA or if you are planning on taking your CPA exam. The interviewer always asks this because they believe that if someone is a CPA then that person out-qualifies someone who is not a CPA. People recognize the CPA exam as being a competitive filtering system. There are four exams that you have to pass, and they each have a pass rate of about 50%. Believe it or not, this pass rate percentage is lower than both the bar exam and the MCAT.

I’m sure someone will argue that going through law school and medical school are both harder than getting your bachelor's in business or accounting, but I have a personal anecdote in response. The doctor that delivered my baby actually happened to be a CPA at KPMG before he left public accounting to get a second career of being a doctor. I asked him if it was harder to pass the tests to become a doctor or the CPA exams, and he told me without thinking that the CPA exam was much more difficult.

In my opinion, good grades, IQ level, or being a good student are decent indicators if you are going to be able to pass the CPA exam. However, the best indicator of if you will pass the CPA exam is the total hours studied. I would recommend studying at least 150 hours for each exam before taking them.

Now, if you are going to take the exams, my recommendation for the order is BEC, FAR, AUD, and then REG. The reason behind my thought process is that BEC is the easiest, so if you happen to run out of the 18-month window and have to take another exam again, it's best to have to retake the easiest one. FAR should always go before AUD, according to everyone’s advice, given that FAR is basically the precursor to AUD. It's just common sense that you have to understand financial reports and financial statements before you can understand how to audit whether they are right or wrong. I would put REG last unless your main job is taxes. If that’s the case, then I would say you should do BEC, REG, FAR, and AUD.

Another major reason for taking BEC first is that it will give you the momentum to pass the other three. BEC is the easiest of the three tests. It has about a 60% pass rate compared to the 40–50% pass rate for the other three.

In conclusion, higher pay, higher recognition, and better stability make it worth it to study all of those hours to pass the CPA exams. If you have any questions about studying methods for the exam or if you still are questioning whether it is worth it to take the exam, please don't hesitate to email me.

By Caleb Basile, CPA

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