1. HOW THE PROFESSION IS ORGANIZED IN NEW YORK
The majority of jobs that require accounting skills in New York 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 New York. 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 New York Board of Public Accountancy is part of the New York State Education Department Office of the Professions and 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 for work in New York, then you must be either registered or licensed as a CPA with the Board. Before you can be eligible, you also must pass the Uniform CPA Exam. The Board will authorize you to take the exam, which is administered by CPA Examination Services, a division of the National Association of State Boards of Accountancy (NASBA).
CHANGES TO REGULATION
New York has allowed up to three different pathways (combinations of education and experience) for CPA candidates that require varying degrees of education and experience. This article only discusses option 1 in detail.
- 150 semester hours of qualifying education plus accounting experience equivalent to 1 year of full-time work
- 120 semester hours of qualifying education plus accounting experience equivalent to 2 years of full-time work [Note: this pathway is being eliminated; you are only eligible if you already submitted your licensing application before August 1, 2009]
- No educational requirements but 15 years of qualifying accounting experience under a licensed CPA
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 New York. 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, private companies and accounting firms with an international presence could 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
All foreign-educated accountants in New York need to go through the five-step process described in this section before becoming licensed as a CPA. To be eligible for a CPA license and the Uniform CPA Exam you will have to demonstrate that you have either completed 150 semester hours of education and 1 year of full-time experience.
New York, unlike most US states, does not grant CPA licensure for passing the Uniform Certified Public Accountant Examination (IQEX).
Steps to licensing are as follows:
I. APPLICATIONS FOR NEW YORK CPA LICENSE AND UNIFORM CPA EXAM
Your first step towards becoming a CPA is to submit an Application for Licensure and First Registration, Form 1, to the Office of the Professions along with a $377 fee. This form needs to be notarized by a notary public. You will also have to apply to the CPA Examination Services of the National Association of State Boards of Accountancy (NASBA) in order to sit for the Uniform CPA Exam. All first applicants are required to pay CPA Examination Services an application fee of $126.
II. CREDENTIAL AND EXPERIENCE EVALUATION
The next step in the process is to submit documentation of your education and experience to the State Board of Public Accountancy. You must fill out Section I of Form 2 (Certification of Professional Education) from your application and send a copy to each institution that you have attended. The institution’s administrative offices must complete Section II and submit it together with official copies of your transcripts directly to the Office of the Professions. Staff in the Department of Comparative Education will review the transcripts to decide if they meet New York State’s education requirements for licensure.
You will have to demonstrate that your education is equivalent to 150 semester hours including:
- 33 semester hours in accounting with at least one course in each of the following areas: financial accounting and reporting, cost or managerial accounting, taxation, auditing and attestation services
- 36 semester hours in general business electives
- Coursework in business accounting, communications, ethics and professional responsibility, and accounting research
Full details on education requirements are available via links in the Important Links section.
It is important that you submit ALL of your university educational records for evaluation, not just your accounting program, since the Board considers a large range of courses to meet CPA educational qualifications. The New York Board of Public Accountancy requires an overall average in accounting subjects of “C” or better and of “B” at the undergraduate level.
You must also present evidence of one year of full-time experience (or the part-time equivalent) in accounting services. This can include your experience outside the US. If you do not have a year of experience you will have to begin searching for job opportunities in the field.
III. MEET ANY ACADEMIC OR EXPERIENCE DEFICIENCY
Following review of your degree and experience you will have to meet the deficiencies the State Board of Public Accountancy and the Bureau of Comparative Education identify in order to sit for the examination. You will receive information about what type of courses you must take to be eligible for licensure.
In the case you are notified of a deficiency in your credentials you will have to take courses from an accounting program registered by the New York State Education Department or accredited by an accrediting body accepted by the Department, such as the Association for the Advancement of Collegiate Schools of Business (AACSB). For a list of accredited programs see the Important Links section.
In the case that you do not have a whole year of full-time experience, you can finish fulfilling the requirement in accounting services or in advice services under the supervision of a CPA licensed in one of the US jurisdictions or a PA licensed in New York State. Acceptable experience may be earned in a public accounting firm, government, private industry or an educational institution. You can begin or finish your experience requirement at any point during the process since the experience is not a requirement for the examination, unless you are applying for the examination on the basis of 15 years of experience.
IV. UNIFORM CPA EXAMINATION
After eligibility to take the examination is determined by the Board, NASBA will issue you a Notice to Schedule (NTS) your Uniform CPA Exam. If you do not receive the NTS after six weeks of submitting a first time Application you should contact CPA Examination Services. Once you have received you NTS you will have to contact Prometric, Inc to schedule the examination.
To qualify for licensing or registration in New York you must pass the Uniform CPA Exam with a score of 75 and you must pass all parts of the examination within an eighteen month window. The different sections of the examination and its respective fee will be discussed in detail in the Tests section. The examination fee will depend on which sections of the examination you wish to take the first time or if you want to take all sections. If you passed part of the Uniform CPA Examination in another jurisdiction, contact CPA Examination Services for an Authorization for Interstate Exchange of Examination Information.
New York will allow applicants who are required to meet the 150 semester hour requirement to sit for the exam when they have completed 120 semester hours of coursework in each of the required areas: financial accounting and reporting, cost or management accounting, taxation, auditing. The license, however, will not be issued until the applicant has met New York 150 semester hour requirement.
V. RECEIVE LICENSE
If after passing the Examination you are still fulfilling the experience requirement you will have to complete it before being eligible for your license.
The Board can take a few weeks to examine your file after all the requirements have been met. If your application is approved you will receive a congratulations letter with instructions on how to receive your CPA number. You can begin your work as a CPA once you have the number.
You will have to renew your CPA license every three years and will have to pay a $277 fee every time you renew it.
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 – 4.5 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 – 2.5 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 – FEES AND SCHEDULING
The sections of your CPA exam must be paid to the National Association of State Boards of Accountancy (NASBA). For 2012 these fees are as follows:
- Auditing Section: $195.35
- Financial Accounting Section: $195.35
- Regulation Section: $176.25
- Business Environment and Concepts $176.25
4. TIME AND COSTS
Successfully licensing or registering as a CPA in New York 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 New York. Please consider these scenarios as two examples out of many possibilities. Please understand that individual experiences may vary.
TWO HYPOTHETICAL SCENARIOS FOR CPA LICENSING:
|Step||More Efficient Scenario Approximate Time and Cost||More Efficient Scenario Approximate Time and Cost|
|1 CPA License Application + Application to CPA Examination Services||Application for Licensure and first Registration $377|
Application for CPA Exam $126
Total = $503
|Application for Licensure and first Registration $377|
Application for CPA Exam $126
Total = $503
|2 Credential and Experience Evaluation||Your degree evaluation goes smoothly|
Your documents do not require translation
|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|
4 months + $400
|3 Meet any deficiency||Your degree evaluation shows no deficiency||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|
6 months + $2,200
|4 CPA Examination||You are able to study full-time for the exam and spend $300 on test preparation materials|
You apply to take all exam sections and are able to schedule and pass them all over the next six months
6 months + $1,050
|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
|5 Receive License||Your foreign experience allows you to document 1 year of accounting work|
You receive your license 2 months later
|It takes you 2 months to find a job to meet the licensing requirement for experience and one and a half years of part-time work to fulfill the experience requirement|
You receive your license 3 months after you finish the experience requirement
|More Efficient Total|
About 10 months + $1,550
|Less Efficient Total|
About 4 years + $4,450
5. OTHER CREDENTIALS
There are many credentials available to you as an accountant, some of which you can only earn after becoming a CPA. 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 New York Board of Public Accountancy website.
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 New York 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.
- New York State Society of CPAs
- American Institute of Certified Public Accountants (AICPA)
Beyond these two general associations, there are a large variety of professional associations for CPA and accountants generally. These may emphasize functional areas of accounting, different types of workplace or sector, race and ethnicity, gender, or religion. Visit the Resource Board to see some of these associations or to share associations that are not currently listed.
CONTINUING PROFESSIONAL EDUCATION (CPE) REQUIREMENTS
All licensed CPAs in New York State are required to meet Continuing Professional Education requirements (CPE). The mandatory requirements become effective during your second registration period. You will have to report your continuing education requirements on each January 1 – December 31 reporting year (except during the initial registration period). Your may either complete a minimum of 40 contact hours in any recognized subject area or complete a minimum of 24 contact hours concentrated in one subject area. The recognized subject areas are: accounting, auditing, attestation, taxation, advisory services, and specialized knowledge related to specialized industries.
At least 4 of these hours taken during any registration period must be in professional ethics. These 4 credits can count toward the annual CPE requirement in the calendar year that they are completed. Professional associations are often certified CPE providers and are a good starting point for researching CPE options.
LICENSING MOBILITY (RECIPROCITY)
There is not a direct reciprocal agreement between New York and other states for licensing at this time. This means that if you earn your CPA license in the state of New York and wish to perform public accounting services to people or organizations in other states, you will need to research the process for that state and learn how to practice temporarily or permanently there. There is a trend towards making CPA practice easier across states.
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 New York.
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:
- The New York Education Department Office of the Professions is the state regulatory agency. Its site contains information on public accountancy and its Initial License page contains education requirements and exam information for first-time candidates.
- All forms for licensing applicants can also be found in the Office of Professions website.
- New York state Education Requirements
- The Education Department has a database of Accredited Institutions
- The National Association of State Boards of Accountancy (NASBA) New York CPA page has information on applying for the Uniform CPA Exam as well as other useful information
- The New York State Society of CPAs site has information on testing, continuing professional education, and other valuable information about current practices in the profession
- 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 has a tutorial and practice exam available for download
- Exam Bulletin for Uniform CPA Exam
- Prometric test centers
- 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
YOUR IDENTIFICATION MUST MATCH
Your name should appear the same on all documents and identification you will use in licensing as a CPA. You will not be allowed to take the Uniform CPA exam and you will lose all of your fees if your forms of identification are not identical. If you have differences in the way your name is spelled or written on documents like your application or driver’s license, you will need to invest the time and money to correct them