1. HOW THE PROFESSION IS ORGANIZED IN ILLINOIS
The majority of jobs that require accounting skills in Illinois do not require you to be licensed as a Certified Public Accountant, commonly known as a CPA. However, if you wish to practice public accounting without restrictions, becoming a licensed CPA is essential. This guide looks at everything that you as a foreign-educated accountant must do to become eligible for CPA testing and licensing in Illinois. At the same time, it includes some background and tips on the larger accounting profession to give you an idea of the variety of opportunities available as you work to rebuild your career.
REGULATING CERTIFIED PUBLIC ACCOUNTANTS
The Illinois Department of Professional and Financial Regulation (IDFPR) regulates one part of the accounting profession: the Certified Public Accountant, also known as a C.P.A. or CPA. If you use any of these terms to describe yourself or your business, then you must be either registered or licensed as a CPA with IDFPR. Before you can be eligible, you also must pass the Uniform CPA Exam. This is managed by the Illinois Board of Examiners.
CHANGES TO REGULATION
Historically, Illinois only had authority over CPAs who chose to license. All others who passed the exam but did not apply for licensure were still able to use the term CPA but could not be regulated by IDFPR. The Public Accounting Act has now been modified and IDFPR is moving towards being a one-tier state: a state where if you are called a CPA, you are licensed and are able to practice all accounting and auditing functions.
- Beginning October 1, 2006, all people calling themselves CPAs must register or license with the state. After this date, penalties for calling yourself a CPA without registration or licensure can include fines and legal action
- Illinois is phasing out Registration. After June 30, 2010, all new applicants will only be able to apply for Licensure. CPAs who register before that date will be able to renew their registration indefinitely. Registration was introduced as a temporary measure to accommodate the thousands of people working in Illinois who had passed the CPA exam but were not legally required to license before. Registering allows them to continue to use the CPA title, even though only licensed CPAs can practice all public accounting services
CPA REGISTRATION (RCPA)
- Only available to new applicants until June 30, 2010
- Lower fee to register and renew
- No Continuing Education hours required
- No experience required
- Use the CPA name
- You cannot practice public accounting as defined in Section 450/8 of the Public Accounting Act. This means that you cannot:
- Offer attest services (certifying that financial documents you review in audit appear truthful) or be a partner in a firm that does attest services
- Work directly with the Internal Revenue Service (IRS)
CPA LICENSURE (LCPA)
- Higher fee to license and renew
- Continuing Education hours required every renewal period
- 1 year of experience in accounting or auditing-related work required after passing CPA exam
- Use the CPA name
- You can:
- Offer attest services or be a partner in a firm that does attest services
- Work directly with the Internal Revenue Service (IRS)
TRENDS IN US ACCOUNTING
Accounting as a field is undergoing rapid change, including:
- Increased regulation of accounting
- Technologies allowing CPAs to work across state lines and internationally
- Pressures to standardize at all levels: within state regulatory organizations, across state lines, international financial reporting standards.
The goal of these initiatives is to facilitate business and to increase comparability and reliability of financial statements from different sources.
EMPLOYMENT IN ACCOUNTING
Salaries in the accounting field vary widely depending on education, credentials, experience, field of practice, and size of an organization. According to the Bureau of Labor Statistics, the average income of salaried (not self-employed) accountants and auditors was $61,690 in May 2010.
Accounting can be broken down into 4 major fields:
- Public accountants, also called external auditors
- Government accountants and auditors
- Management accountants
- Internal auditors
Of these, public accounting and government accounting stand out as areas with the greatest job opportunities for either CPAs or accountants. CPAs have an employment advantage in these fields when they are competing against non-CPA accountants.
Public accounting in particular has standards that require the use of licensed. Also, the 2002 Sarbanes-Oxley law tightened regulations on public accounting practices and increased the need for CPAs to help companies meet these new requirements.
With the economic downturn and major problems in the financial industry, the US government has become a growing source of jobs for CPAs and accounting and finance professionals. This is because government oversight is increasing in finance; tax work is a steady source of demand as well. The Department of Treasury and the Internal Revenue Service are agencies hiring in large numbers which may also have some presence at the state level in Illinois. You will need to verify if job openings require you to be a citizen or a permanent resident.
GLOBALIZATION AND INTERNATIONAL ACCOUNTING
Special opportunities exist for accountants with knowledge of International Financial Reporting Systems (IFRS) or the earlier International Accounting Standards (IAS). If you can show that you have practiced accounting according to these systems in your earlier work experience, private companies and accounting firms with an international presence should see this as a real advantage. They need people skilled in IFRS to facilitate international business. In addition, the Securities and Exchange Commission has publicly stated its intention to transition towards IFRS and away from the Generally Accepted Accounting Principles (GAAP) that govern most accounting in the United States today. These standards are not yet emphasized in most US accounting programs.
2. ELIGIBILITY FOR CPA LICENSE OR REGISTRATION
The licensed public accountant institutes of Canada, Australia, Mexico, Ireland, New Zealand, and Hong Kong have a reciprocal agreement with several US states, including Illinois. Their members qualify to take the Uniform Certified Public Accountant Qualification Examination (IQEX), which is administered by the National Association of State Boards of Accountancy. The Illinois Board of Examiners gives these candidates with passing IQEX scores the authorization to apply directly for CPA certification in Illinois for a $250 fee. They do not have to have their foreign degrees evaluated. More information is available in the Important Links section under links on testing.
The majority of foreign-educated accountants, however, need to go through the three-step process described in this section before becoming licensed as a CPA in Illinois.
Steps to licensing are as follows:
I. CREDENTIAL EVALUATION BY ILLINOIS BOARD OF EXAMINERS
Your first step towards becoming a CPA is to have the Illinois Board of Examiners evaluate your credentials. The Board does not accept reports from outside credential evaluation services. It uses its own resources to evaluate your foreign degree and professional education credentials.
Applications and other informational materials are available on the Illinois Board of Examiners website; this and other links to official references can be found in the Important Links section.
Some of the documentation requested in your application includes:
- Application form: Request for Academic Credentials Evaluation for CPA Designation
- Official transcripts from all education sources including transfer and non-degree courses and degrees in subjects besides accounting; detailed supporting documents such as course descriptions where available (originals can be returned)
- Record of at least 1 year of work experience after passing your CPA exam
- Official translations (from university or government sources or certified translators from groups such as the American Translators Association)
- A request that your documents be returned to you at the end of the evaluation
- $250 fee
Mail to: Illinois Board of Examiners, 100 Trade Centre Drive, Suite 403, Champaign, IL 61820
The Board recommends using registered mail, certified mail, or a courier service to deliver these documents.
The foreign degree evaluation process takes about 8 weeks. This period may be extended if:
- Your record is incomplete – the Board will send you a letter if this is the case
- You have educational experience both in the US and a foreign country – your foreign credentials will be evaluated first, then your US records will be seen by another evaluator
When the evaluation process is complete, the Board will send you a results letter that will inform you if your degree and additional education meets the minimal education requirement to sit for the Uniform CPA Exam.
Among other things, you will need to show:
- 150 semester hours of education, including the equivalent of a US Bachelor’s degree (minimum 120 total semester hours)
- 24 semester hours in accounting (including managerial, financial, tax, and audit courses)
- 24 semester hours in business-related coursework
Non-traditional studies from non-accredited universities or online or professional education courses do not fulfill these education requirements.
If an academic deficiency is found in the evaluation process, you will need to identify the courses you need to take to meet Board requirements. You must be careful not to take courses that the Board considers duplicates of courses for which you have already received credit. To avoid this, you should ask the Board to approve the course plan you develop before you enroll in any classes.
Once you have completed your coursework, send an official transcript to the Board and request an updated evaluation letter. Be sure to include a copy of your first letter in this correspondence. You have up to three years to complete your education requirements without having to pay additional evaluation fees to the Board.
Most community colleges offer a variety of courses that can help you meet your education requirements without earning a new degree. You can also consider enrolling in a US masters degree program if you have many courses to make up and would like your time in the classroom to lead to a higher credential. In this case you should still confirm with the Board that the coursework in your program will satisfy its education requirement.
II. PASS UNIFORM CPA AND PROFESSIONAL ETHICS EXAMS
To qualify for licensing or registration in Illinois you must pass two exams, in any order:
- Professional Ethics Exam
- Uniform CPA Exam
These will be discussed in detail in the next topic, Tests.
When you have successfully completed both exams, the Illinois Board will issue a certificate directly to the Illinois Department of Financial and Professional Regulation (IDFPR). At this time IDFPR will also be able to access your test scores electronically. You are now eligible to apply to IDFPR for your CPA license and/or registration by Acceptance of Examination.
III. LICENSE AS LCPA AND/OR REGISTER AS RCPA
This last step is quite simple, because a record of your CPA and Ethics exams can be electronically verified by IDFPR. The IDFPR website has a section on Public Accounting with applications for both the RCPA and LCPA. In both cases you will indicate that you are applying for Acceptance of Examination (the other available option is Endorsement, for people already licensed as CPAs in another state).
Paper application packages should be mailed to IDFPR for processing at Illinois Department of Financial and Professional Regulation, Att: Division of Professional Regulation, P.O. Box 7007, Springfield IL 62791.
You have the choice of applying for Registered Certified Public Accountant either online or by paper form.
A link to the Registered Certified Public Accountant Online Application from the Public Accounting page leads you to an online questionnaire. You answer some basic questions common to the paper form then enter identification information. The system searches for your record. You pay by credit card.
Fee: $92 ($2 convenience fee)
Download and print out the document titled “Registered Certified Public Accountant – Acceptance of Exam and Endorsement” from the Licensee Application Forms link on the IDFPR Public Accounting page. It includes a 4-page application form. Indicate that it is for Acceptance of Examination. Mark information about your CPA and Ethics exams in Part V of the form. This, plus other identification you provide about yourself, will allow IDFPR to find your test records and process your application.
Download and print out the document titled “Licensed Certified Public Accountant – Acceptance of Exam” from the Licensee Application Forms link on the IDFPR Public Accounting page.
The LCPR Licensure by Acceptance of Examination application package only requires one more document than the RCPR:
- 4-page application (in Part V you will include information about the exams you have passed)
- Verification of Employment/Experience Form (documenting at least 1 year of professional accounting experience since passing your CPA exam)
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PROFESSIONAL ETHICS EXAM
To license in Illinois you must pass an exam on professional ethics. At this time the only accepted exam is one offered by the AICPA. It is a self-study course available by CD-ROM or textbook and it is called Professional Ethics: AICPA’s Comprehensive Course. The course materials include a coded envelope and form so that you can submit your test to AICPA and it will transfer your scores to your chosen state Board.
You can buy the practice exam from the AICPA web site for $148.75. If you join the Illinois CPA Society and order through them, the cost is $75.
You can take this exam either before or after the Uniform CPA Exam. Some people prefer to take this first as a way to prepare for similar material that appears on the CPA exam.
UNIFORM CPA EXAM – TEST FORMAT AND CONTENT
The Uniform CPA Exam is a computer-based exam available 8 months out of the year during divided two month periods (after every 2 month period, there is a 1 month break). The testing company Prometric offers the exam at many sites throughout the US.
There are two types of problems on the exam:
- Multiple choice questions
Simulations are short case studies that put you in a professional situation and ask you to respond as a participant. Each simulation will require you to compose a professional communication as part of your answer, for example, an office memo or letter. There are 2 simulations in each section of the test except Business Environment and Concepts, which has no simulations.
The exam is divided into four sections. The Uniform CPA Examination Candidate Bulletin describes them as covering the following topics:
- Auditing and Attestation – 4 hours: “knowledge of auditing procedures, generally accepted auditing standards and other standards related to attest engagements, and the skills needed to apply that knowledge in those engagements”
- Business Environment and Concepts – 3 hours: “knowledge of general business environment and business concepts that candidates need to know in order to understand the underlying business reasons for, and accounting implications of, business transactions, and the skills needed to apply that knowledge”
- Financial Accounting and Reporting – 4 hours: “knowledge of generally accepted accounting principles for business enterprises, not-for-profit organizations, and governmental entities, and the skills needed to apply that knowledge”
- Regulation – 3 hours: “knowledge of federal taxation, ethics, professional and legal responsibilities, and business law, and the skills needed to apply that knowledge”
More detailed content information is available through the Candidate Bulletin and through AIPCA.
You must pass each of the four sections with a score of 75 or higher within 18 months of your first test session.
UNIFORM CPA EXAM – APPLICATION AND FEES
Once your credentials have been accepted by the Illinois Board of Examiners, you are eligible to send the Board an application for the Uniform CPA Exam.
This request should include:
- Application form: Illinois Application for the computerized CPA Exam
- Copy of your Board foreign credential evaluation letter
- Fee: varies from $40 to $120 depending on how many test sections you will schedule (4 total)
Mail to: Illinois Board of Examiners, 100 Trade Centre Drive, Suite 403, Champaign, IL 61820-7233
The Board forwards approval of your request to the National Association of State Boards of Accountancy (NASBA), which sends you a bill for the exact sections of the test you plan to take. For 2009 these fees are as follows:
- Auditing Section: $195.35
- Financial Accounting Section: $195.35
- Regulation Section: $176.25
- Business Environment and Concepts $176.25
When NASBA receives payment it issues a Notice to Schedule (NTS) which will allow you to contact a Prometric Testing Center and schedule days and times to take the sections you have chosen.
- You will need to go through this process more than once if:
- You fail any section
- You do not schedule for all 4 sections in your application
- You miss or abandon any test section
When all of your sections earn passing grades you will be eligible for licensing or registration with the state of Illinois.
4. TIME AND COSTS
Successfully licensing or registering as a CPA in Illinois depends on many factors. Just some of these include:
- The completeness of your educational and professional records
- Your performance on several tests
- Your free time and how much you can afford to spend
We provide two hypothetical scenarios to show just some of the variety of results that immigrant professionals may find when they seek to become CPAs in Illinois. Please consider these scenarios as two examples out of many possibilities. Your experience will vary.
TWO HYPOTHETICAL SCENARIOS FOR CPA LICENSING:
|Step||More Efficient Scenario|
Approximate Time and Cost
|Less Efficient Scenario|
Approximate Time and Cost
|1 Degree Evaluation||Your degree evaluation goes smoothly|
Your documents do not require translation.
You are able to study full-time for the exam and spend $300 on test preparation materials.
4 months + $550
|Problems with your documents and translations take months to resolve and are expensive – you must pay others in your country to visit institutions for you|
Your degree evaluation shows that you have some deficiencies and you must take 3 courses over the next 6 months; this takes 2 months to receive board approval
10 months + $2,200
|2 CPA + Ethics Exam||You pass your ethics exam in one month|
Four months later, you apply to take all exam sections and are able to schedule and pass them all over the next six months
1 year + $1,300
|You pass your ethics exam in one month|
You begin to study for 2 sections of the CPA exam at a time
Over 14 months you make three testing applications (2 to schedule all sections for the first time, and a third to retake a section you fail)
15 months + $1,350
|3 Illinois License or Registration||You have found work in your field and in one year you can meet the experience requirement for licensing|
You apply, and receive your license in a month
13 months + $120
|It takes you two months to find a job to meet the licensing requirement for experience|
After one year, you apply for your license and receive it in a month
15 months + $120
|More Efficient Total|
About 2 1/2 years + $2,000
|Less Efficient Total|
About 3 1/2 years + $3,700
5. OTHER CREDENTIALS
There are many credentials available to you as an accountant, some of which you can only earn after becoming a CPA. Here are just a few: the Bureau of Labor Statistics Occupational Outlook Handbook for Accountants and Auditors provides many more examples.
NO CPA REQUIRED
- Certified Management Accountant (CMA): this certification requires experience in management accounting, an exam, and continuing education requirements and is offered by the Institute of Management Accountants
- Certified Internal Auditor (CIA): this certification requires work experience in internal auditing and a four-part exam. It is offered by the Institute of Internal Auditors
- Certified Information Technology Professional (CITP): this credential shows additional professional development in the area of business technology as it applies to accounting practice. Coursework and exam are offered through the American Institute of Certified Public Accountants
- Accredited Business Valuation specialist (ABV): this program reflects special expertise in business valuation and forensic accounting. Coursework and an exam offered through the American Institute of Certified Public Accountants
6. BEYOND LICENSING
SETTING UP YOUR BUSINESS
If you plan to have your own accounting business, it is important to know that you may have to go through one more process: licensing as a Public Accountant Firm. This is not required if you plan to do business under “Your Name, CPA” and work alone (in what is called a sole proprietorship). However, if you plan to do business by another name or to include others in your practice you will need to license. Information is available on the IDFPR Public Accountancy Page.
JOINING A PROFESSIONAL ASSOCIATION
State and national associations for CPAs provide opportunities for professional development and networking. They also help set help introducing new accounting standards and develop exams, and give information and opinions on policy in Illinois and across the US. Their websites may offer useful orientation to CPA candidates about the licensing and examination process, including test preparation. They often provide Continuing Professional Education (CPE) to members as well.
- Illinois CPA Society (ICPAS)
- American Institute of Certified Public Accountants (AICPA)
Beyond these two general associations, there are a large variety of professional associations for CPA’s and accountants generally. These may emphasize functional areas of accounting, different types of workplace or sector, race and ethnicity, gender, or religion.
Continuing Professional Education (CPE) requirements
A Registered Certified Public Accountant in Illinois does not have to meet a Continuing Professional Education requirement. A Licensed CPA must complete 120 hours of CPE (including 4 hours specifically in professional ethics) during each 3-year period between License renewals. Professional associations are often certified CPE providers and are a good starting point for researching CPE options.
If you decide at any time that you want to make your CPA license inactive, you must notify IDFPR. You may wish to do this if you change careers or retire. For your period of inactivity you will not have to pay fees or complete CPE – but you will also have to stop using the term “CPA” unless you are also Registered and keep your registration active. To make your license active again you must pay the current renewal fee and show proof that you have met CPE requirements for the current period.
LICENSING MOBILITY (RECIPROCITY)
There is not a direct reciprocal agreement between Illinois and other states for licensing. This means that if you earn your CPA license in the state and wish to perform public accounting services to people or organizations in other states, you will need to research the process for that state. There is a trend towards making CPA practice easier across states, including Illinois recognition of “substantial equivalency” for licensed CPAs from other states wishing to conduct business in Illinois. The Illinois CPA Society (ICPAS) has a useful Question and Answer page about licensing mobility on its website.
To provide assurance that financial statements are reliable. That is, to state that they are probably based in fact. Only Licensed CPAs can provide attest services in Illinois.
SARBANES-OXLEY (SOX) LAW (2002)
Made major reforms in accounting practices of public companies and the role of auditors. An accounting firm that audits a public company can also give advice on taxes, but it can no longer consult in areas such as hiring, technology, investments and the law.
SECURITIES AND EXCHANGE COMMISSION
This US agency regulates publicly-traded companies and enforces several laws that address finance and accounting
7. IMPORTANT LINKS
LICENSING AND REGULATION:
- Illinois Department of Financial and Professional Regulation IDFPR, Public Accounting Section Phone: 217/785-0800. The main page for Public Accounting contains applications for Registered CPA, Licensed CPA, and Public Accountant Firm
- The online application for RCPA. Remember that after Jun 30, 2010 the RCPA designation will no longer be given to new applicants
- Illinois Board of Examiners will evaluate your credentials and manage your CPA test application(s), phone: 217/531-0950. Reference information about the Illinois Board of Examiners for academic credential evaluation (including foreign academic credential evaluation)
- The Illinois Board of Examiners Forms page includes helpful forms including for foreign degree evaluation
- The Illinois CPA Society (ICPAS) site has information on testing, continuing professional education, and other valuable information about current practices in the profession
- ICPAS information about licensing mobility
- The American Institute of Certified Public Accountants (AICPA) also has information on becoming a CPA, options for continuing professional education, professional resources by practice area, and news and information about accounting practice in the US and internationally
- Uniform CPA Exam page has a tutorial and practice exam available for download
- Exam Bulletin for Uniform CPA Exam
- Prometric information for CPA testing, including test centers
- Professional Ethics, AICPA’s Comprehensive Course
- The Uniform Certified Public Accountant Qualification Examination (IQEX) is an alternative route to CPA licensure for certain licensed public accountants in Canada, Australia, Mexico, Ireland, New Zealand and Hong Kong. More information on the IQEX is available on the NASBA site
- The Bureau of Labor Statistics Occupational Handbook for Accountants and Auditors has information about the professions and descriptions of a wide variety of credentials available to accountants.
Volunteering your services is a great way to help you expand your practice, network in your job search, help others, integrate, and keep your skills current. Many accountants volunteer with nonprofits directly or through professional volunteering associations like the Taproot Foundation. You can help nonprofits with their accounting or help individuals prepare taxes or learn about personal finance and budgeting
Be your own advocate throughout the licensing process. Seek clarification about questions and concerns directly from official sources. Organize your questions and ask for assistance
CHECK CREDIT FOR COURSES
If you need to take courses to meet Board education requirements before you can sit for the CPA exam, it is a good idea to consult the Board directly before beginning any classes. You will not be given credit for courses if the Board finds that they duplicate courses you have taken in the past.
CONSIDER CPA REGISTRATION VS. LICENSURE
Some people choose to become both registered and licensed as a CPA. The advantage to doing both (before the option to register is eliminated June 30, 2010) is in retirement or a career change: you will be able to make your CPA license inactive, which means you will not have to pay to renew the license or meet continuing education hours. Normally this would make you ineligible to use the term CPA to describe yourself. However, if you maintain registration (which has just a modest renewal cost and no CPE requirement) then you can continue to use the term CPA