The highest level of professional skill that may be achieved in accountancy is recognized by a certificate designating the holder as a CPA (Certified Public Accountant). To earn it, candidates must meet various state requirements, including the successful completion of a difficult two and one-half day written examination. The four parts of the uniform CPA examination are Auditing, Business and Commercial Law, Accounting Theory, and Accounting Practice; but a particular state may also require examination in additional subjects such as economics, federal income taxation, or government accounting. Certified public accountants are the only group of practicing accountants who must demonstrate their competencies by passing the uniform national examination and by meeting other experience qualifications.
Candidates receive credit for the parts of the examination they pass and may retake the sections they fail at a future date. A substantial majority of those who attempt the CPA examination do pass all parts eventually. Although the CPA certificate originally was intended for public accountants as a means of ensuring high- quality services and ethical standards in work involving a public trust, many people who do not intend to practice public accounting take the CPA examination and obtain a license. It can thus be used as a means of securing promotion to bookkeeping (accounting) jobs at the highest levels.
There are 150,000 CPAs nationally, and although most CPAs are men (more than 96 percent), women are gaining in importance in public accounting. Women now have their own national professional society, The American Woman's Society of Certified Public Accountants.
The majority of states require a four-year college degree with the equivalent of a concentration in accounting as a prerequisite for taking the CPA examination, and the day may not be far off when a college degree will be required in all states. In some states, the educational prerequisite is becoming even more rigid. Florida and Hawaii now mandate five years of education; New York State requires four years of education plus two years of professional experience. A fifth year of education plus one-year of experience fulfills the qualifications for candidacy. Many public accounting firms consider only college graduates for positions.
Accountants often concentrate on one phase of accounting. For example, many public accountants specialize in auditing (examining a client's financial records and reports to judge their compliance with standards of preparation and reporting). Others specialize in tax matters, such as preparing income tax forms and advising clients of the advantages and disadvantages of certain business decisions. They often help develop estate plans that will have high benefits and low taxes. Still others specialize in management consulting and give advice on a variety of matters. They might develop or revise an accounting system to serve the needs of clients more effectively or give advice about different types of computers or electronic data processing systems.
The American Institute of Certified Public Accountants developed a testing program in an effort to attract qualified young men and women and to provide standards by which their aptitudes could be measured against the demands of a successful accounting career. The tests are made available in three broad service programs known as The College Accounting Testing Program, The Professional Accounting Testing Program, and The High School Accounting Testing Program.
The tests for college students were initiated in 1946. The Orientation and Achievement Tests assist students in deciding whether to choose accounting as a profession and also provide checks at successive levels of advancement throughout the course of accounting study.
The Accounting Orientation Test, High School Level, is designed to provide students, parents, teachers, and counselors with information concerning potentialities for success in the field of accounting or in the general field of business. It yields an "objective appraisal of learning abilities in the verbal and mathematical areas." This is a fifty minute test primarily for high school seniors, but it may be used with juniors also. It measures general aptitude for handling business problems. This test may be of special interest to students who have done well in mathematics or science courses but who may not have considered the opportunities in accounting.
The Level I College Achievement Test is a progress check early in the study of accounting. The Level II College Achievement Test aids seniors in finding employment as accountants by making available standardized measurements of aptitude and proficiency for submission to prospective employers.
At the professional level, tests aid employers in gauging the ability of job applicants and assessing their learning ability. The tests have been used in making decisions regarding retention of temporary workers and in upgrading and promoting permanent staff members.
The computer is having a major effect on the accounting profession. The need for junior accountants will probably be reduced because electronic data processing systems are replacing the manual preparation of records and statements. However, there will be a greater need for accountants to analyze the information made available by these systems.
Electronic devices will help free CPAs from paperwork, thus giving them more time for the interpretive aspects of their assignments. Increased educational requirements for the profession will probably result so that not only a college education but graduate work as well will be a normal part of preparation for accounting leadership.
Accounting is the fastest growing profession in the United States today because of the complex and changing tax systems, the growth in size and number of business corporations, the increasing use of accounting services by small business organizations, and the pressure in business and government agencies to improve budgeting and accounting procedures. In government, accounting is the biggest business of all.
The American Institute of Certified Public Accountants substantiates the foregoing statement and predicts a continued rapid growth of the accounting profession in the foreseeable future for the following reasons:
- The growth of new businesses every year and booming foreign markets assure a sharply competitive economy. In order to compete, businesses will need more cost controls and other studies of management's performance, and more expert help from CPAs in looking ahead.
- More government controls require more sophisticated accounting data and more independent professionals who can take some responsibility for its reliability.
- Businesses will report their financial condition to more investors, creditors, and others.
- Economic, political, and technological developments require experts to develop, analyze, interpret, and communicate economic data.