Have you dreamed of putting the letters CPA after your name? Many working adults and college-bound young people entertain the idea of joining the ranks of the nations certified public accountants. Unfortunately, there is a lot of misinformation surrounding the profession, both about what CPA’s do, how they become certified, how much they earn, and more. If you intend to enter the profession, the first step is to educate yourself by cutting through the common myths about CPA’s. Here are the five most common ones.
They Focus on Taxes
Preparing tax returns and helping individuals with annual filing chores is a tiny percentage of the scope of duties for trained accountancy pros. The few who are in business for themselves often focus on taxation services, but for the most part, the job is more about financial planning, auditing, budgeting, strategic goal-setting, inventory measurement techniques, asset evaluation, payroll planning, and more. Tax planning is part of the job, but just a small piece of it.
Schooling is Prohibitively Expensive
This bit of misinformation is based on the actual fact that professional, state-certified accountants usually need the equivalent of five-years of college coursework combined with a two-year on-the-job stint. But getting your degree and paying for it is not more challenging than for a standard four-year program. If you need assistance with financing, it’s easy to apply for a student loan through a private lender.
The advantage of this approach is that you can shop for a low-interest rate, get realistic repayment terms, and borrow enough to cover all your degree-related costs. Many colleges offer five-year CPA tracks, after which you’re ready to take the AICPA (American Institute of Certified Public Accountants) exam and begin accumulating your two-year work experience requirement. Borrowing from a private lender works whether you’re a student or a parent who is cosigning for a child’s education loan.
Most are Self-Employed
Hollywood films have contributed to this common falsehood. The fact is that most accountants who have the three letters after their names work for corporations, government agencies (principally the IRS), and medium-sized businesses. Yes, there are plenty of solo practitioners, but those are the exception rather than the rule.
When You Pass the Exam, You’re Ready to Work
There’s much confusion about when you can work, what you can do, and what you can call yourself after you pass the AICPA exam. Laws differ among the states, but the most common rule is passing the exam means you are ready to begin the work experience portion of the certification path. You do get paid for the work, but cannot call yourself a CPA or use the letters on your business card until the state in which you work approves your formal application for a license.
The Job is Boring
Television sitcoms have long reinforced this image. It’s far from true. The breadth of tasks that professional accountants can perform is staggering. In addition to all things tax-related, they can assist with long-term planning, budgeting, financial planning, internal auditing, and much else. For those who choose the profession, working with money, business strategies, conceptual planning, and investigative audits is interesting, exciting, challenging work.