Accounting is one of the ever green professions in the world, mostly unaffected by the crisis on an Economy the accountants are believed to be the only ones who can really help the country in times of crisis and when its running good. Each country recognizes this profession with many names may It be AICPA in US or CPA in Australia. In this article you will go through what it needs to become a CPA, educational requirements and much more
CPA (Certified Practicing
Accountants) is the biggest of the three professional accounting bodies
in Australia by membership and is one of the most sought after
professional memberships, providing members with a wide array of
accounting career options across virtually all areas of accounting from
insolvency to management accounting and everything in between. We
explore the steps needed to become a CPA and what type of career you can
expect.
Want to become a CPA in Australia? Our guide will explain how to do so.
- What exactly is entailed in becoming a CPA
- What you can expect on the CPA exams
- What kind of career options become available to you
- The differences between the CA (Chartered Accountant) program and CPA
- Mutual recognition agreements between worldwide accounting bodies
How to become a CPA:
CPA Australia has two classes of
membership; Foundation level membership (for which you become eligible
once you've satisifed the qualification prerequisites) and Professional
level membership, achieved once you have completed the required CPA
modules and demonstrated the required practical work experience under
your mentor.
The first thing you should know is that the organisation imposes some
entry requirements before accepting you as a Foundation level member to
ensure you have the requisite background knowledge in accounting,
finance and similar concepts. CPA's exact requirements vary from year to
year - as of right now they don't outline specific requirements for
entry as a Foundation level member but it generally involves meeting
CPA's 'core knowledge requirements'.
This means you'll need to have completed units at university level study from the following foundation areas of knowledge:
- Accounting Systems and Processes
- Management Accounting
- Financial Accounting
- Accounting Theory
- Finance
- Commercial and Company Law
- Economics Quantitative Methods
- Information Systems Design and Development
Your university level units might not correspond exactly to the
core knowledge areas listed above, but you should have a rough idea of
whether you qualify based on how similar your units are to the subject
areas above. Whether you qualify for Foundation level entry depends
entirely on CPA Australia. Each new member is required to submit an
application form and go through a review process.
In my experience, though, I have found that if you've done any form
of straight Accounting degree or a Commerce degree with an Accounting
major in Australia, you'll almost certainly qualify for the Foundation
level.
If you're deemed by CPA not to have met all of the requirements for
their Foundation level membership, you'll have to complete a Foundation
Level Exam for those units. CPA provides you with a Study Manual for
each exam which contains the background information and material to help
you study for and pass the foundation level exams.
The exams do not have a specified percentage threshold to aim for -
you are just given a pass or fail result, so your best bet is to study
as thoroughly and intensively as you can for the exam.
The next step in qualifying as a full-fledged Professional-level CPA
is to complete the Professional level program. The requirements involve
completing 4 compulsory segments and 2 electives. The 4 compulsory
segments include the following (as of 2013):
- Ethics and Governance
- Strategic Management Accounting
- Financial Reporting
- Global Strategy and Leadership
The two elective units can be picked from the following list:
- Advanced Taxation
- Malaysia Taxation
- Singapore Taxation
- Advanced Audit and Assurance
- Contemporary Business Issues
- Financial Risk Management
The Professional Level qualification also includes a mandatory
integrated practical experience requirement, which means you'll have to
log and record 5040 hours of practical experience under an approved
mentor in a professional accounting environment.
The exact requirements for what constitutes a 'professional
accounting environment' vary, but generally in order to have your
experience approved it'll need to be under the supervision of a fully
qualified CPA/CA and you will have to be in a professional level
accounting role, so for example if you're working as a bookkeeper at a
local factory, you might not get your experience approved even if it's
under the direct supervision of a CPA.
CPA Australia has a panel of staff who
review and decide on approvals of practical work experience, and you can
always appeal if you're not happy with their decision. Your mentor will
also have to sign off on your practical experience form confirming that
they have mentored you for the duration of the practical experience
period.
What You Can Expect on the CPA Exam:
All CPA exams are open book, however don't make the mistake of
assuming this makes the exams easy. Time is extremely limited in a CPA
exam, and you're often given about 100-200 questions to do in a
relatively short time period, usually no more than 2 hours.
You'll need to be very well prepared, and familiar with the source
material. Of particular importance is knowing where to locate the source
material for each topic in your study guide, as the last thing you want
to be doing is wasting time searching through your study book trying to
find particular topic. Every minute counts.
I've compiled a handy list of top tips from professionals and former
students on passing the CPA Australia exams. Read on to ensure you have
the fastest possible journey to CPA qualification by passing your exams
on the first attempt.
- Index your source materials such as
your study guide and any related books you might want to bring into the
exam. You can use post-it or sticky notes or other stationary to mark
sections of the book so you know exactly where to turn to during an
exam. This will particularly help you on the taxation exam - you'll
constantly need to refer to tax legislation, case names and rulings, so
make sure you know where to find sections containing important and
relevant case names and legislation sections.
- This one is more generic advice that could be applied to almost any
examination situation, but keep time management in mind as you prepare
for the exam. It can't be emphasised enough how important this is, as
the allocated time for the exam will rapidly run out if you spend too
much time on one particular question. Most CPA exams are at least 75%
multiple choice so there's a good chance you can easily make up the lost
marks on a missed question.
- Stay motivated for the exams. It's often difficult to manage full
time work with professional level study, but think of the bigger picture
- once you're a qualified CPA, many doors will open for you in your
career and you won't have that invisible barrier preventing you from
making the career progress you deserve. A lot of firms also give their
employees bonuses for successfully completing the CPA or CA
qualification - if nothing else, let financial reward be your
motivation.
- Try and keep up to date on your studies. Experience shows it's far
easier to prepare for the final exam if you've studied a little bit each
night throughout the semester as opposed to trying to do it all in the
last few days. Even if you allocate yourself half an hour each night to
study, you'll find you won't need to cram nearly as much come exam time
and you'll end up stressing yourself out a lot less.
- If you plan on doing two CPA modules at the same time, as a lot of
people do, you might want to take Financial Reporting separately. Many
students claim it's the most difficult CPA unit, along with Global
Strategy and Leadership. Past students suggest that the best modules to
combine are Ethics and Governance with Strategic Management Accounting,
or Advanced Taxation with Contemporary Business Issues.
- Keep up to date with your 'My Online Learning' page. It provides you
with course updates, study tips and hints, and valuable course
material.
career options become available to CPA?
Your options, of course, depend largely on the field of expertise in
which you gained experience while completing the CPA Professional level
program, but generally if you want to advance to any level of management
or senior roles in the Australian accounting industry, you'll
need a postgraduate accounting qualification such as the CPA or CA.
The accounting industry is so broad and extends across virtually
every major industry in Australia and indeed the world, so it's
difficult to set boundaries on what type of career you could have with a
CPA qualification, but here's a rough guide based on the type of
specialisation you are interested in and your skill set:
Management and Executive Roles
The CPA qualification is an ideal choice if you're looking to take up
a future management or executive role. The CPA program is generally
known for training its members with a specific focus on business
strategy, leadership and management, over more technically oriented
qualifications such as the CA program.
Management roles in accounting are among the highest paying in the
industry, with the median salary for a Chief Financial Officer an
impressive $156,411 (AUD) in 2013.
Some specific job roles that this area of accounting encompasses
would include Chief Executive and Chief Financial Officers, Finance
Managers and Directors, Financial Controllers, Group Reporting Managers,
Business Development Managers, Risk Managers and Compliance Managers.
Chief Financial Officer (CFO) Average Pay Range 2013:
$91,226 - $296,829 (AUD)
Accounting Specialists
The CPA's wide range of elective units means you can choose to study
specific areas based on your chosen specialisation, such as Taxation or
Audit. Specialists in accounting fields such as audit, tax, finance,
risk, policy, and compliance are almost always required to have a
professional level certification such as the CPA.
Tax Accountant Average Pay Range 2013:
$38,752 - $71,152 (AUD)
Traditional Accounting Roles
Most people would probably be more familiar with the traditional set
of accounting functions and roles that are required across almost every
industry in Australia - from financial accountants, who are responsible
for recording an organisation's transactions and preparing a set of
financial statements for stakeholders that accurately represent that
financial position, to management accountants, who usually are concerned
with providing accounting information for decision makers - such as
whether to continue making a certain product or keep a factory
operational.
Other types of traditional accounting roles include corporate
accountants, systems accountants, project accountants, planning
accountants, and treasury accountants. The CPA program prepares you well
for each of these roles and will often provide the extra career boost
needed to step into a more senior accounting role.
Management Accountant Average Pay Range 2013:
$53,943 - $102,546 (AUD)
Financial Accountant Average Pay Range 2013 :
$51,075 - $95,881 (AUD)
At the end of the day though, it's
almost impossible to define the career options available to a CPA
without writing a lengthy parable, as they encompass almost every
industry in Australia from finance to manufacturing, to education and
health care. Just know though, that almost for almost any professional
accounting role you'll need a professional level certification to be
considered for senior and management roles.
Differences between the CA and CPA programs
Laymen and people not in the accounting industry are often confused
at the varying designations given to professionals within the industry.
The simple fact is that CPA (Certified Practising Accountants) and CA
(Chartered Accountants) are two different professional bodies who
provide largely the same function - to act as representatives of
professionals working in the field of accounting, to provide education
and training support for members, and to promote and help regulate the
industry as a whole.
Which one is 'better' is a hotly contested area of much debate and
dispute, and there is unfortunately no clear, definite answer. It all
depends on your career goals, personal preferences, and even your firm's
preferences.
However, there are some fairly common opinions and stereotypes about
each of the professional bodies that you might want to keep in mind
before committing to one or the other. CA's are largely seen as the more
traditional 'straight-laced' accounting body, and as technical
accounting specialists likely to perform more of the nitty gritty
accounting and auditing work whereas CPA's are seen more as still
technically competent but more educated in business strategy, management
and specialist accounting areas. The majority of CPA's are in
commercial roles, such as banking, finance and industry, whereas the
majority of CA's are in public practice (accounting firms).
You'll get plenty of differing opinions on which one is superior, but
the fact is that they both prescribe to the same standards,
regulations, and principles. You'll find that as long as you've proven
yourself in the workplace, the vast majority of managers and senior
accountants will
not care either way if you have a CPA or CA
designation. Some types of organisations, such as certain public
practice accounting firms or Big 4 partners may be more politically
influenced and motivated and may prefer CA over CPA, but generally this
is a rapidly aging and antiquated viewpoint.
As to which one is harder to do - there's really no question, the CA
program is more difficult. It goes deeper into the technical aspects of
accounting and requires you to complete often very detailed and involved
assignments as well as the exams. Your work is also generally judged
far more harshly in the CA program - markers will expect you to know
everything there is to know about the area you're being examined on, and
you'll usually have to provide detailed workings and references as to
why you did something a particular way.
In contrast, CPA exams usually are comprised of at least 75% multiple
choice - which doesn't automatically make them easy, of course - you'll
still be required to actually know the material you're being tested on,
and work fast and efficiently.
So if your personal goal is simply to get accreditation to satisfy
your boss's demands that you get a professional accounting
qualification, you're probably better of going with the CPA program.
It's less time consuming to study for, less stressful in general and has
excellent support services and exam help provided by CPA staff. If you
have grand ambitions of one day becoming a partner of a Big 4 firm like
Deloitte or Ernst & Young, you might be better off choosing the CA
program as to avoid any complications later down the track.
CPA Australia also has significantly more members than CA, with
approximately 144,000 members compared to an estimated 38,000 Charted
Accountants.
Finally, the other thing to consider is
that the CPA qualification isn't recognised in the Global Accounting
Alliance (GAA) whereas the CA is. So if you ever want to transfer your
qualification to the United States or the UK, then doing the CPA will
not allow you to do so.
Mutual recognition agreements between worldwide accounting bodies
CPA Australia has mutual recognition agreements with the:
Society of Management Accountants of Canada (CMA Canada)
Certified General Accountants Association of Canada (CGA-Canada)
Hong Kong Institute of Certified Public Accountants (HKICPA)
Malaysian Institute of Accountants (MIA)
Institute of Certified Public Accountants of Singapore (ICPAS)
Chartered Institute of Public Finance and Accountancy (CIPFA)
Chartered Institute of Management Accountants (CIMA)
The Institute of Certified Public Accountants in Ireland (CPA Ireland)
Institute of Chartered Accountants of India (ICAI)
