Requirements for becoming a certified public accountant in Texas

¶ … Texas Uniform CPA Exam

While many people might know what a CPA is and what it stands for (Certified Public Accountant), this paper looks closely at the nuances of becoming a CPA and how those nuances pertain to this profession within the state of Texas. What the average person doesn't understand is that being given a CPA license is the accounting profession's highest standard of competence and a sign of accomplishment, along with an assurance of quality and experience. Aside from being a Certified Public Accountant, the average CPA is also licensed by their state board of accountancy, a move which signifies a certain level of prestige which has been gained through a thorough demonstration of knowledge and competency through meeting and fulfilling the highest educational standards and by doing well on the CPA exam.

This paper looks at the Texas Uniform CPA Exam, one of the major requirements necessary in order to become a CPA in the state of Texas. Passing the CPA exam is one of the most important parts of becoming a CPA, along with meeting the other licensing requirements which are present within the state of Texas. There are a range of requirements and steps that one must complete in order to sit for the exam in the state of Texas and this paper looks at these regulations along with all aspects of the application process.

Requirements for the Texas Uniform CPA Exam

Not everyone who wants to become a CPA can. In fact, there are strict and intensive requirements involved in becoming a CPA and which vary from state to state. However, in Texas in particular, the requirements are as follows: first, one needs to be of good or strong moral character. Thus, in order to just apply to take the exam, one's permanent record needs to demonstrate a long background in personal integrity and a strong moral character. For example, the most pertinent way in which one's character can demonstrate integrity and comparable ethical soundness is via an absence of felonious acts from one's personal history, these include basic things like the answers that an applicant offers regarding arrests, charges, convictions, probations, along with the addition of a felony or misdemeanor other than misdemeanors for driving offenses (tsbpa.state.tx.us). All applicants should be well aware that the Board will be utilizing the database which is a part of the Texas Department of Public Safety -- particularly their division of crime, using a computerized criminal history checks of each applicant who is able to give an application of intent. This database is so useful because "The Texas DPS -- Crime Records Department maintains records of arrests, charges, convictions, probations and deferred adjudications of misdemeanor and felony offenses that occur in Texas. Records of these activities are reported to the Board for further investigation" (tsbpa.state.tx.us). Furthermore, the length of time that this database spans is also incredibly noteworthy: if an applicant was 17 years of age or older; the incident would be recorded to the Board with the exception of criminal records that have been eradicated or sealed by the court in the most official way. When it comes to assessing the moral character of a given individual, the Board also places into consideration the current obtainment of any type of professional license along with any earlier denials of exam privileges of any other state or federal agencies. Thus, possessing a sound moral character is hardly something that the Texas Uniform CPA Board takes lightly.

Another requirement of taking the exam or even applying to take the exam is that one needs to have a BA or higher degree from a college or university in the United States which is board recognized (Sebastian, 2006). All degrees are checked and verified, given the serious nature of the CPA exam. "Degrees are verified by submitting official transcripts with the Application of Intent. An Application of Intent may not be approved until the baccalaureate degree is awarded and shown on the transcript. Degrees earned at colleges outside of the United States may require evaluation to determine equivalency to a baccalaureate or higher degree earned from a Board-recognized U.S. college or university" (tsbpa.state.tx.us). Another requirement to sit for the CPA exam in Texas is the necessity of completing 150 hours or quarter hours of college credit. Again, when applying to take this illustrious exam, one needs to bear in mind that the hours placed on one's application will in fact be checked and verified to ensure that one has indeed studied in the places that one has claimed: official transcripts will be checked. It's true that regulations do vary from state to state, but the reality is that the bulk of states require 150 hours of instruction must as Texas does. It's also worthwhile to note that this regulation is around 30 hours longer than what is provided in a typical four-year bachelor's degree.

It's also worth noting that some requirements revolve around having a minimum number of semester hours for accounting instruction and for business, though in Texas, these are not the exact requirements needed. It's common for CPAs to have bachelor degrees in accounting or in business; some colleges and universities have programs which help to accommodate to the accounting or the business degree with accelerated programs or with programs that are able to allow students to achieve such goals within a reasonable amount of time or at a faster pace.

In Texas, there is a certain amount of flexibility and adaptability with how these 150 semester hours can be achieved. For example, one can do so by completing a master's degree or higher via a specific university, which is acknowledged by the state board of Texas. Secondly, one can complete higher level of accounting classes necessary for the CPA exam, with hours which are needed for BA along with the additional hours which need to equal but not exceed 150 semester hours (tsbpa.state.tx.us). Also, each individual is responsible for accomplishing added semester hours or quarter hours which are supposed to add up to 150 hours or more; again, all coursework must take place in established universities that offer other established disciplines, like communications, business, liberal arts and others (tsbpa.state.tx.us). In fact, once one has obtained a BA degree, all additional coursework needs to be upper level if it is going to be used to the meet this 150-hours requirement.

As alluded to earlier, there is a very strict requirement in Texas which pertains to the completion of 30 semester hours (or quarter hours) of upper level accounting courses from a college or university which meets the recognition of the board (tsbpa.state.tx.us). Half of these total hours must take place in more traditional face-to-face courses and must include a couple hours of tax and accounting research (tsbpa.state.tx.us).

The Board of Texas is extremely specific about the precise types of accounting classes that they consider acceptable and appropriate. For instance, classes on financial accounting and reporting for business organizations may include intermediate and advanced accounting, managerial and cost accounting, auditing and attestation services, internal accounting control and risk evaluation, financial statement analysis, accounting research and evaluation, tax research and assessment, taxation analysis, the scrutiny and analysis of financial statements, and education on the correct methods of financial accounting and the reporting in accordance with government rules and the rules for non-profit entities and other such groups (tsbpa.state.tx.us/exam). Other pillars of this field that the exam will need to cover is along the lines of 12 semesters of accounting information systems such as management information systems, allowing for the MIS courses to be listed or cross-listed (tsbpa.state.tx.us/exam). These are all aspects of the requirements to bear in mind, along with the fact that there is also a fraud examination, along with education on international accounting and financial reporting in conjunction with an accounting internship program which is created for the good of the student in gaining real-time experience.

In fact, the Board specifies that at the very least, a minimum of two semester credit hours in upper-level accounting or tax research and analysis which is relevant to course be accomplished by each student (tsbpa.state.tx.us/exam). This can be achieved in a couple of ways: "The semester hours may be obtained through a discrete (stand-alone) course or offered through an integrated approach. If the course content is offered through integration, the university must advise the board of the course(s) that contain the research and analysis content" (tsbpa.state.tx.us/exam). However, the student needs to be cognizant of the accounting courses which are not recognized by the Board and which will not work in the student's favor in achieving eligibility to take this exam. Courses like principles of accounting, financial and managerial accounting, introductory accounting, ethics courses, and CPE courses along with other comparable classes will not contribute to the eligibility of the student in achieving this degree.

While internships within accounting are supported and even encouraged, there is a sense that the knowledge gained in the internship needs to be equal to or greater than the knowledge gathered in a more standard accounting classroom setting. In this regard, the following regulations do apply: "The internship course shall not be taken until a minimum of 12 semester hours of upper division accounting course work has been completed. The internship plan is approved in advance by the faculty coordinator" (tsbpa.state.tx.us/exam). There are also requirements that the firm which offers the internship also have to meet. The employing firm has to be capable of setting clear objectives and goals for the student to meet during the internship, along with significant accounting work given with strong training and supervision (tsbpa.state.tx.us/exam). This experience needs to be delivered with a strong evaluation of the student at the end of the internship with a letter that details the tasks the student was able to do, and clear documentation offered to the faculty and to the student (tsbpa.state.tx.us/exam). Conversely, in order for the student to have this internship count, they need to also keep a diary of all relevant work experiences that occurred during the internship, write a paper documenting the knowledge gained, and offer documents with the application which provide evidence that all requirements have in fact been met.

The final requirements revolve around the necessity of completing 24 semester hours or quarter-hours of upper level-related business courses which are encompassed within the coursework. In addition there is a three-semester-hour ethics course that must be completed and which needs to be approved by the board. For example, the ethics course needs to cover things like ethics for professional accountants and general accounting ethics along with comparable courses. These courses have responsibility to help create a foundation for ethical reasoning. An application of intent, is one of the first things that needs to be harnessed in order to assess how eligible one is in order to take the CPA exam.

Aside from all of these requirements, in order to be a CPA in Texas, one also needs to complete 150 hours of licensure, a requirement which has no age minimum.

Topics Covered in the Texas Uniform CPA Exam

In order to pass this particular test, one needs to not only complete and accomplish all the minimum requirements that merely allow one to sit for it, but to have mastery over all the multifaceted subjects and arenas that the test entails. Studying each subject that is covered by the exam is an absolute must, as is seeking proper tutoring and engaging in practice tests and practice questions is also incredibly essential, as such moves will allow one to gain the highest level of preparedness with the test. The first section of the exam is four hours long and it is referred to as the auditing and attestation section.

This section covers 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. This section consists of 90 questions: "This section covers 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" (tsbpa.state.tx.us/exam-qualification). The following section is referred to as the Business Environment and Concepts section, which is composed of a three hour section, which is described as one which determines how well the prospective candidate is able to comprehend and respond to the business pillars which shape it. "This section covers 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" (tsbpa.state.tx.us/exam-qualification). The following section is the one known as the financial accounting and reporting section. This particular section is the one which focuses on how well the student is able to understand and respond to scenarios and problems which connect to the arena of business and engaging in safe and acceptable business practices. "This section covers knowledge of generally accepted accounting principles for business enterprises, not-for-profit organizations, and governmental entities, and the skills needed to apply that knowledge" (tsbpa.state.tx.us/exam-qualification). The final section is a three hour section and it is one which covers the arena of Regulation. Accounting is liable to strict and intensive government regulations like a range of other fields which deal with the handling and the proper reporting of money. "This section covers knowledge of federal taxation, ethics, professional and legal responsibilities, and business law, and the skills needed to apply that knowledge" (tsbpa.state.tx.us/exam-qualification).

The first section and the last two sections of the exam include objective questions and certain task-based simulations for individuals. Moreover the BEC section also handles objective questions in conjunction with written communications presented in forms known as testlets (tsbpa.state.tx.us/exam-qualification). Each CPA exam generally contains three testlets which have just fewer than 30 questions which are presented in an objective manner to the test-taker.

Testing Window

The ability of a student to sit for the Texas CPA exam has four distinct windows: there is a window from January 1st to February 29; a window from April 1 stto May 31, a window from July 1st to August 31st, and a window from October 1st to November 30th. Furthermore, there is an 18-month rule that is necessary for passing all four parts once the first part is passed.

One of the most common review suggestions for the adequate preparation of the exam is for students to invest in a review program, as candidates who have passed the CPA often recommend this, as it can mean the difference between passing and failing and can help to guide one by making the entire studying process more efficient and help to direct one's attention away from material that probably won't come up on the exam. Certain review courses can help to show students how to review material on the go, so that one can study as much as humanly possible: the more times one reviews concepts, the easier they are to review and understand.