The Ambitious Bookkeeper Podcast

15 ⎸ Should you get your CPA License?

September 22, 2021 Serena Shoup, CPA Episode 15
The Ambitious Bookkeeper Podcast
15 ⎸ Should you get your CPA License?
Show Notes Transcript

In this solo episode, we’re going to chat about whether I think getting your CPA license is worth it, some of the requirements to keep in mind, and tips that helped me pass my exams (way back when!)  I get lots of questions about the CPA and decided to finally make an episode about it. I answered some specific questions from Instagram, too! So if you answered my call for questions, listen to this episode.

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Ep 15 - Should You Get Your CPA License?

[00:00:00] Evaluate your own goals. If you feel really called to get your CPA license and you really want to be able to offer tax or audit services, or just have that credibility factor and have those letters after your name, that is , a valid reason for getting it. And if not, if you've decided you don't want it and you're happy with what you have and you like the simplicity. The bookkeeping business and it's successful the way it is than not is valid. Also only you can decide.

[00:01:00] Welcome back to the ambitious bookkeeper podcast. This episode is basically a Q and a, I've gotten a lot of questions on Instagram about pursuing a CPA license. Should people do it? Should I not do it? some people are torn. Some people want to be validated in the decision that they've made. So I wanted to answer those questions.

Talk about, Whether or not, you should actually pursue your CPA and whether I think it's worth it. So I want to preface this episode with, the sound quality is not great. I apologize. I recorded this whole entire episode with the wrong microphone. I didn't realize I didn't have my fancy schmancy. Sure mic, chosen on my recording device. And so you're going to hear a little bit of a computer fan in the background and a little bit of echo and I [00:02:00] apologize. I just, this whole episode was off the cuff. I can't just re record it. So, we'll be back next week with better audio quality. But, without further ado, please enjoy this episode.

About pursuing your CPA license.

so I actually put out a call for questions, on my Instagram to answer people's specific questions that they had around getting a CPA license, but the idea for this episode was actually sparked quite a while back.

I got a message from someone that said. They had a random CPA question and she asked, how long have you had your CPA? And did you have to work under someone to obtain the license? And then do you keep up with the CPE credits every year I've considered getting mine, but I just don't know if it's worth it.

I'm pretty happy with the bookkeeping world. And don't know if I want the stress of offering CPA services as well. So I [00:03:00] want to give you a little bit of background. This person who messaged. Has a bookkeeping business. It is very successful. I think she has around 30 clients. So clearly she's doing something right.

She probably doesn't need her CPA license. But when I answered her, I basically was just like, and this is what I'm going to tell you too. It really depends on what your goals are and what you desire. If you have always wanted to get your CPA license, it's a goal that you've had. In your mind and you've always wanted to pursue it and you haven't yet.

And you're wondering if now is the right time only, you can answer that only you can decide if it's a goal worth pursuing now because of the requirements of getting a CPA, it might be more difficult for some. So part of her question was how long have you had your CPA and did you have to work under someone to obtain the.

So the first part of that question, how long have I had my [00:04:00] CPA license? It's been about 10 years. I think I got actually a little less than 10 years. I got fully licensed in 2013, the journey for me, which I'll get into, because some of the questions that came in were around this it took me the full 18 months to get my CPA license.

So if you're listening to this episode, I want to backtrack a bit. If you have never even thought about getting your CPA license, you don't know the first thing about the requirements. I want you to pause this episode and go to this way to I think it is, um, or the AI CPA website. There's, there's lots of resources, or your state board of accountancy.

So that's probably the best place to start is to go to your specific state where you are located. , where you are working and living go to that state's board of accountancy website. it's usually like for instance, California is the California board of accountancy [00:05:00] or, the Arizona state board of accountancy.

Sometimes it'll say state in there, if you just Google it, you'll find it on the state board of accountancy website. There will be a section on there on getting licensed as a. And it will have a checklist for you of all the requirements. So each state is a little bit different on its requirements, but for the most part, it's pretty much the same.

You have to have an accounting degree or, or a degree with a certain amount of accounting credits to be able to even sit for the exam. So if you don't have either a bachelor's degree or an accounting degree, you're not eligible yet. So that's the first thing that you have. , and then the other thing was part of this question also was, did you have to work under someone to obtain the license?

Yes. You have to practice or work under a practicing CPA to get your CPA license. Now this doesn't have to happen until after you've taken your CPA exams. So that's usually the, the order is you get your [00:06:00] bachelor's, you apply to sit for the exam and there's a bunch of requirements for that. Once you sit for the exam, then you have to work on passing it.

So we'll get into that in a minute, too. And then you have to have, a year or two under a CPA that does not mean you have to work at a CPH firm. I got most of my, well, I got half of my hours in corporate working in the accounting department of a manufacturing company because my supervisor was a licensed CPA.

So there's multiple options and avenues that you can go for getting that experience, but you generally have to work under a CPA. There are some, options , like if you've been, if you've owned your bookkeeping practice or been providing tax or bookkeeping services or accounting services for like 10 or 15 years, some states have a way that you can actually just get the experience requirement from that.

Always just look at your state's board of accountancy [00:07:00] website for that information. So yes, I worked under a CPA at a small tax firm, like a three, literally a three person tax firm. I worked under a CPA there and I worked under a CPA in corporate, like I said, at a manufacturing company. The next part of your question.

Do you keep up with the CPE credits every year? Yes. You are required in most states to fulfill 40 hours per year of CPE credits. And, there's lots of options for CPE these days, especially online and it's way more affordable than it used to be when you had to actually go to conferences.

So, yes, you can do most of it online. You can do it in person if you want. There's lots of options. And most states require you to have 80 hours every two years. And generally they want you to have, uh, 40 hours one year and 40 hours, the next and that's another thing just depends on your state requirements.

[00:08:00] So you also have to be really good at following instructions and doing some research, which is another skill that comes in handy when you are a CPA and they test you on your research. So, she has considered getting her CPA, but she just doesn't know if it's worth it. So I'm going to go back to if it's been a goal of yours and you've always wanted to get your CPA license, even if you don't feel like it will be worth it, if it's something that you want to do.

And if you are going to look back on it in 10 to 15 years and think, man, I really wish I had just done it. Then you should probably just. And that's kind of how I treat every desire and goal. If you think that you, in three or four years, you're going to look back and wish that you had just done it or that you already had completed whatever it was.

Then that's probably a sign that you should just go for it. It's going to be hard. It's definitely hard. And like I [00:09:00] said, it took me the full 18 months to pass every section. An 18 month window. Once you pass your first exam, you have to finish all the rest of the three within 18 months. And there's a whole like schedule of when these tests are offered and, and all that, which you'll learn when you start researching becoming a CPA, there's a lot that goes into it.

and so, I, I'm pretty sure I got my. Final test score a day before my first test score expired. It was really cutting it close. so back to, is it worth it only, you can really decide that I will say, um, I'll get into the rest of the questions I had in a minute, but I will say, has it been valuable in running my bookkeeping business 100 years?

Have I probably gotten clients pretty easily because I have a CPA probably I would say [00:10:00] because I have a CPA license I'm held to ethical standards and I it's, it's known if you have an active CPA license that you have to fulfill CPE credits and requirements, which means you have to stay up on top of the industry and, and the accounting rules and all that.

And like I said, you have to fulfill ethical requirements. You have to take four hours of ethics every two years. And, um, if, you do anything shady, you can have your license taken away. I mean, I got finger, you get fingerprinted when you get your CPA license. So it's like, it's, it's kind of a big deal. So generally the public understands that a CPA license is held to in high regards.

They know it's hard to get kind of like the bar exam and in law, um, So I would assume that that has probably helped me get clients because there's already that built in trust. Um, are there horrible CPAs out there? Absolutely. [00:11:00] Would I recommend any business? Just trust any CPA hail? No, no way there. Um, just a little side note, a CPA firm where I grew up.

Uh, the town I grew up in was a very highly regarded CPA, local CPA. And he's in prison now for defrauding, a bunch of people out of millions of dollars. So no, not every CPA is created equal, just like not every bookkeeper is created equal. Not anyone in any industry. It, if you don't have personal ethics, it doesn't matter if you're required to take ethics courses.

So. Back to, is it worth it? Like I said, only you can decide for me, it was one of those things that I wanted to do after I got my accounting degree, I spent a year working to make sure that's what I actually wanted working at a CPA firm, [00:12:00] even though it was a small one, it definitely swayed me toward getting my CPA because I knew that that was going to be the way that I progress in my career.

once I left the CPA firm and went into industry, it was the same thing. You cannot in most bigger corporations, you cannot surpass the staff accountant role. And once you have your CPA license, even as a staff accountant, they want you actively pursuing your CPA, which means you're studying and you're taking tests for it.

You're qualified to take the exam. You have the requirements met to sit for the exam and they want to see you actively pursuing. I would not have gotten to where I was in my career without my CPA license. So for me, yes, I absolutely, it was, it was worth it to get to where I was in my career and to learn all the things that I was able to learn by climbing that ladder in my career.

Uh, but for you and for someone who already has a successful bookkeeping business has lots of [00:13:00] clients that already trusted. You understand accounting, you know, when to refer things to someone with more expertise and heck maybe you just want a more simple business in life, which is honestly why I have a bookkeeping firm and not a CPA firm, which is I'm going to get into the last part of her question is offering CPA services.

Um, I decided, even though I am a CPA, I have an active license in the state of Arizona and an inactive license in a state of Califia. I don't do any CPA services. So CPA services include, uh, compilation, which is basically compiling financial statements. And, um, not necessarily certifying them because you can't, you don't really certify compilation reports, but, basically like stamping them that these are prepared by a CPA compilation.

Review services, which is like a downgraded [00:14:00] audit and then audit, um, services. So anything, a test attestation services is what it's called. I don't offer any of those. I don't offer tax either, but you don't have to be a CPA to offer tax. You can be, an ERO, which is an electronic return

organization, I think what the IRS and have a P P T I N. And, um, and Ethan as a CPA, you can get those things without going through other tests. Um, should all CPAs prepare taxes? No. Should all CPAs perform audit services? No, I actually don't have any audit background. I've been through lots of. In my corporate career.

So I know what it entails. All of my work has been audited throughout my whole entire career, but I have not actually performed audit. So I [00:15:00] am not actually qualified to perform audit services for clients. So right off the bat, basically the only service I am qualified to do as a CPA for my clients is compilation.

Um, but that again, it's my personal. Like overriding there because technically I can, I have the license to do so, but I choose not to, because I don't feel like I'm qualified. So you still have to practice personal, um, judgment on things like that. So, Uh, yeah, her question was, I'm pretty happy with the bookkeeping world and don't know if I want the stress of offering the CPA services as well.

And so, yeah, that's kind of where I'm at. I don't want the stress of having to deal with signing tax returns and audit reports. Like I said, I don't feel qualified for either of those. I don't enjoy tax. I surely don't think I [00:16:00] would enjoy audit. I love helping small businesses. Hopefully, this kind of helps you if you're kind of in that same situation where you think you might want to get your CPA license, just because you get it though, doesn't mean you have to offer CPA services.

So like I said, that's where I'm at. Even though I have my CPA license, I used it to further my career in corporate. Um, but I'm not necessarily using my CPA designation right now. I would say right now it just is a credibility factor for me. So that question, I think I've pretty much answered everything about it.

So if you are listening to this and you remember sending me that message back in, I don't know, um, July or sometime this summer, um, I hope that helped you, um, with your decision. And like I said, if it's something you want to pursue, [00:17:00] just to say, Hey, I have my CPA license, I accomplished this thing and you're going to look back and think, if you don't do it, you're going to regret it.

Then you should just do it. But like I said, it is intense. It's hard. Most, I don't know about most, I can't, I don't have actual statistics. Maybe I should have pulled those up before I recorded this episode. But I think back when I was taking. You had like a 50% pass rate. So, uh, that can, that just gives you a little bit of an idea of how difficult it is.

And I've talked to people, I've talked to someone, multiple people actually who have a law degree and have sat for the bar exam and also sat for the CPA exam. And they said the CPA exam was harder. So, uh, take, take that and do with what you will, um, But let me jump into some other questions. I got an Instagram.

So one of them said, made me feel better about my decision not [00:18:00] to get my CPA. So hopefully, I don't know if this is going to sway you either way. Really. It's only, you can decide if you really don't want to get it. And you have other things going for you in your career. You're happy. You're helping clients.

Then I hope you are steadfast in your own decision. The other, another question I got was, do I need a CPA if I don't plan on doing tax and, um, I will kind of reiterate what I said about the CPA services. You'll need a CPA if you want to do compilation audit or review, um, other than taxes. But if you're not in corporate, you're running.

If you're not in corporate and you're running your own bookkeeping business and you're not. Offer tax services, you know, you don't need your CPA license. Um, another question I got was, did you find any particular work experience [00:19:00] helped and. I'm assuming this question was around, um, sitting and passing my exams. 

Yes. I worked all through college. And I would say having the work experience while I was going to college to get my accounting degree was super helpful because I was able to apply what I was learning in the real world and apply what I had been doing in the real world to my accounting courses. And then furthermore, I was working in the real world.

I was working in a CPA firm as I was studying for my first couple sections or my first section I think I was studying for audit was the first one I took. And, uh, audit was really easy for me to pass because I had actually been through audits in the real world. So I could look through like, look back on my experience of, oh, this was a [00:20:00] procedure that the auditor was doing.

On the stuff, you know, cash receipts or whatever, or the, or the bank account. And I just had like a different level of knowledge coming from it from the other side, not necessarily performing the audit procedures, but having gone through them and witnessing them per se. So that helped a lot going through audits, um, being able to apply what I was studying for in the audit section.

Um, and then on the other side, when I started in corporate, as a staff accountant, working in a manufacturing company, uh, learning stuff about it and all this stuff that is on the rest of the sections and financial accounting, the far section, um, again, I was doing stuff in corporate. That was a plugable to what I was studying, uh, on the exams.

And so that was really helpful. So I would say. [00:21:00] Having work experience actually helped a ton. I will caveat that I failed two sections and had to retake them. Uh, I think it was BEC and B, uh, reg section. So business environment, concepts, and regulation. Those two sections I had taken. But the two sections, I didn't have to retake where the audit section in the financial accounting and reporting section, which for some people, those two are the hardest.

And I feel like I probably had a leg up because I had some corporate experience that applied to that. Um, one of the other questions I got was if I have already a bookkeeping and advisory practice, should I get a CPA? And this is kind of similar to this other bookkeeper that had, um, messaged. Wondering if she should get one, even though she has a successful bookkeeping business.

So I'm [00:22:00] going to say the same thing to you. If you already have a bookkeeping in advisory practice, you're getting clients easily, your clients trust you. You're actually delivering on what you say you're going to do, and you have connections in the space to get the help that you need or refer people to them.

If you need additional expertise, then you don't need to see. Um, something that might be more advantageous for you is getting your, um, management, accounting certification through the AI CPA. Um, another question I got was, did you pass on the first try? And I think I, I heard he answered this. I passed audit on my first try and I passed far financial accounting and reporting on my first try.

Um, I did not pass a regulation, which is the tax and law section. And or BC on the first try, uh, those took two tries and I, I passed the last one barely in [00:23:00] time for my, you know, right before my first test expired. Um, and the last question I have here is which services do you actually need one to provide?

Actually, I think I already answered that. So you don't need a CPA license to provide tax. Um, you can provide tax by just doing a certification, uh, through your state or doing, you know, getting your enrolled agent certification and tax attorneys can, um, practice tax. Uh, you do need a CPA license if you're going to provide any attestation services. Those are all the questions I have about the CP license. I hope that this was helpful for you. Again, I just want to recap, I probably said this like 50 times already, but ask yourself is getting my CPA [00:24:00] license, a goal I've had on my way. For some time, is it something that I'm going to look back and regret not doing for some reason, if that's the case, then I say, go for it.

Um, I will recommend, I think someone had asked me some recommendations on study material. I kind of did a hodgepodge of things. I was on a very low budget when I was sitting for my CPA. And so I tried different things. Um, I ended up settling on the ninja CPA review, study guide flashcards, and whatever other resources he had at the time, um, and using the Wiley test bank for multiple choice test questions, um, and just practicing and practicing and practicing until I was like blue in the face.

Um, [00:25:00] And I followed his methodology for studying. I studied about 20 hours a week. Um, I would get up an hour early before, you know, my, for my kid woke up for school and study in the morning. And then I would study on my hour lunch break at work. And then I would study again in the evening after she went to bed and then I would study for several hours on the weekends.

It was. I did not have a social life, but I didn't really have one anyways, because I was a mom. Um, and yeah, only you can decide if something like that is worth it. Um, it takes grit and perseverance for sure. And it doesn't come easy to everybody. I mean, I have met a couple people who barely had to study and they passed, but I think that's the exception and not the rule.

Um, so. Evaluate your own goals. If you feel really called to be to get your CPA license and you really [00:26:00] want to be able to offer tax or audit services, um, or just have that credibility factor and have those letters after your name, that is a valid, a valid reason for getting it. Um, and if you're, if not, if you've decided you don't want it and you're happy with what you have and you like the simplicity.

The bookkeeping business and it's successful the way it is than not is valid. Also only you can decide. So I hope this episode was helpful. Like I said, I will drop a couple of links in the show notes of some of the resources I recommended. Check out your state's board of accountancy website for any information on your specific state requirements, because they're all slightly different, even though the exam is the same exam at every interview.

The state's requirements for licensing and for sitting for the exam, maybe a little [00:27:00] bit different. Um, I would love if you rate and review this show, it's, it's super helpful. It's going to help other people find it more easily and, uh, share, take a screenshot, share this on Instagram and tag me. I'm at ambitious bookkeeper and I will talk to you guys next week.


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