What Does a CPA Do? Tasks, Skills, and How to Become One

A certified public accountant (CPA) is a financial professional who has met certain education and licensure requirements set by their state board. CPAs are highly sought after by individuals, businesses, and nonprofit organizations because they have extensive training in tax law, auditing procedures, management practices, and other important aspects of business financial operations.

Learn more about what CPAs do, how they differ from accountants, and how to become one. Afterward, build your accounting knowledge with the University of Illinois' Fundamentals of Accounting Specialization.

What does a CPA do?

CPAs perform a wide range of accounting, tax, and consulting work for corporations, small businesses, non-profit organizations, governments, and individuals. However, thanks to their licensure, they are authorized to perform specific regulated services, like auditing and attestation, while providing expert guidance on complex financial matters, including taxation, accounting, and business advisory services.

Their work requires extensive knowledge of financial systems, strong analytical skills, and the ability to translate complex financial data into actionable insights for clients and organizations. Whether working independently or as part of a larger firm, CPAs must maintain high professional standards while staying current with evolving financial regulations and industry best practices.

A CPA's core responsibilities span six main areas:

• Comprehensive tax services

• Detailed auditing and assurance work

• Strategic financial planning

• Business advisory services

• Financial reporting

• Regulatory compliance management

Is a CPA licensed?

Yes, a CPA is licensed by the state where they plan to work. To obtain a CPA license, you must complete 150 credit hours of education, obtain 1-2 years of professional experience, and pass the four-part CPA exam. From there, you can apply for a CPA license with your state board of accountancy.

CPA vs. accountant

A CPA is a natural career progression after you have gained experience as an accountant and have prepared to seek state licensure.

An accountant is a financial professional who manages and analyzes financial records, prepares financial statements, handles tax returns, and provides business advice. Accountants can work with various levels of education and experience, and while many hold bachelor's degrees and professional certifications, they are not required to be state-licensed or meet ongoing educational requirements to practice. As a CPA, you have developed advanced accounting abilities that not all accountants can perform.

Key skills to succeed as a CPA

CPAs need a combination of technical and workplace skills to succeed. Let's review different abilities you can develop or strengthen if you want to become a CPA.

• Technical skills: As a CPA, you need extensive technical knowledge to perform the job duties effectively. These include accounting software such as QuickBooks and tax preparation software such as TurboTax and Drake Tax software. 

• Organizational skills: You need good organizational skills to prepare accurate reports, organize documents, and keep track of deadlines important for tax returns, audits, and other duties. You’ll often have several projects simultaneously, so a system is crucial.

• Critical thinking: As a CPA, you’ll have to be able to see the big picture and think critically. You must be able to analyze data, evaluate it, and then put it into context to provide meaningful, reliable advice.

• Problem-solving: Solving problems is a big part of being a CPA. You’ll be responsible for finding solutions to complex problems and developing strategies that address issues your clients may have with their taxes or business practices.

• Communication: As a CPA, you must be able to clearly and effectively communicate with others, both in writing and verbally. This skill is essential for any CPA working with colleagues, managing employees, or directly with clients.

• Attention to detail: As an accountant, you must maintain accuracy and precision in your work because every part of an accountant's job has financial consequences for your employer or client.

• Analytical thinking: Some people are naturally good at analyzing data and finding patterns. This skill can benefit your accounting career and help you spot problems with financial records or processes much more quickly than if you were going through the books line by line.

• Business acumen: Understanding how businesses operate is critical when working as a CPA in any industry. You need to understand the basic business strategies and principles to advise management on how their decisions will affect the company's financial position.

CPA salary and career outlook

The US Bureau of Labor Statistics (BLS) projects employment for accountants and auditors to grow by 6 percent from 2023 to 2033, faster than the average for all occupations [1]. While accountants make a median annual salary of $81,680, according to BLS, CPAs can often command higher salaries thanks to the additional education and licensing they've received. Glassdoor estimates that the average annual salary for a CPA in the US is $135,531 [2].

The career progression from CPA can take a few different directions. You can advance to become a senior auditor, accounting supervisor, or tax manager, according to Zippia [3].

Where do CPAs work?

The diverse business and technical skills you gain as a CPA open the door to various career options. Around 81 percent of CPAs work in private companies, with CPAs serving in many different types and sizes of firms, such as the following [4]:

• Large, international accounting and tax firms: These organizations often have offices all over the country and the world. They provide various services, including tax advice, financial consulting, and auditing.

• The Big Four accounting firms: Deloitte, PricewaterhouseCoopers (PwC), Ernst & Young (EY), and KPMG, are the four largest professional services networks in the world. They offer audit, assurance services, taxation, management consulting, actuarial, corporate finance, and legal services to companies.

• Medium-sized firms: These organizations tend to be regional. They might have offices in several states or one area of the country. They provide similar services as large firms but typically on a smaller scale and often have smaller clients.

• Smaller firms: Local accounting practices focus on the needs of smaller businesses in their area. If a small business needs tax advice or an audit, it often contacts a small firm for assistance.

• Business and industry accountant: A business and industry accountant is another career path available to CPAs. Business and industry accountants work in companies of all sizes in diverse areas, such as financial accounting and reporting, management accounting, financial analysis, and treasury/cash management.

Specializations

Gaining specialized knowledge in an area of accounting, taxation, or finance is also an option for CPAs. With the right experience and training, you can specialize in areas such as:

• Business valuation

• Consulting services (including information technology)

• Corporate taxation

• Employee benefits

• Estate planning

• Financial forensics

• Financial statement auditing

• Forensic accounting and fraud examination

• International operations and taxation

• Investment management

• Litigation support

• Mergers and acquisitions

• Personal financial planning

• Real estate

• Research and development tax credits

How to become a CPA

The path to becoming a CPA starts with earning a bachelor's degree. You’ll then pass the CPA exam to get licensed in your state. You’ll also need to complete continuing education to remain licensed.

Earn 150 hours of credit.

A degree is often required to be an accountant, and the same holds true for CPAs. In order to seek CPA licensure, you'll need to first complete 150 hours of credit, which can be accomplished when you earn your bachelor's degree (typically done with 120 hours) and an additional 30 hours of credit that may be completed after graduation. Some CPAs choose to earn their master's degree either independently or as part of a combined program with the bachelor's, which satisfies the additional 30 credit hours.

Gain experience.

The required years of experience you need to take the CPA exam vary from state to state, but most call for at least two years working in public accounting. Some states will accept other experiences, such as working in government or industry, but you will generally need more years when using this type of experience. 

Pass the CPA exam.

Each state sets specific requirements for the Uniform CPA exam eligibility, so it's important to review what's expected in your state. Generally, you will need to take four computer-based tests that total 16 hours of testing.

Three tests will be in Core sections that include:

• Auditing and Attestation (AUD)

• Financial Accounting and Reporting (FAR)

• Taxation and Regulation (REG)

The fourth test will be in a specialty section of your choice (called a Discipline section), and you can choose from Business Analysis and Reporting (BAR), Information Systems and Control (ISC), and Tax Compliance and Planning (TCP) [4].

You are required to get a score of 75 or higher. Some states require CPA candidates to be at least 18 to 21 years old, and a few require that you’re a citizen or permanent resident.

Apply for licensure.

CPAs are licensed by their state boards of accountancy. Find your state's Board of Accountancy and review its website to get clarity on what you'll need to do. 

For most states, you'll need to complete the steps above and:

• A background check

• An ethics examination

• State residency rules

Continue your education with CPA courses.

As a CPA, you will be required to complete continuing professional education (CPE), generally every two years. The two main categories of CPE are:

• Programs: Formal courses

• Self-study: Reading journal articles or taking an online course

It’s important to note that states have different CPE requirements and deadlines. For example, states have different requirements for the number of hours of ethics CPE you’ll have to do, and accept various types of education. It’s always best to check your state's rules and regulations before starting your CPE. 

Benefits of becoming a CPA

CPA certification is the most well-recognized professional accountancy qualification. The prestige and respect associated with being a CPA can offer you various exciting career opportunities.

Here are some of the benefits you can expect by getting your CPA:

• Earn more money: On average, CPAs earn significantly more than non-CPAs with similar education and experience. According to Glassdoor, CPAs with one to three years of public accounting experience earn an average annual salary of $135,531 [2].

• Increased job opportunities: Becoming a CPA can allow you to pursue many different career paths within the accounting field. You can work as a CPA in public accounting firms, private companies, government agencies, and nonprofit organizations.

• A sense of accomplishment: Passing the CPA Exam shows you have what it takes to be successful in the profession. It's a challenging exam—a typical pass rate is about 50 percent [5].

• Credibility: As a trusted business advisor and financial expert, your credibility is essential to you and your client's success. By becoming a CPA, you’re not just showing your clients that you know what you’re talking about; you’re showing them that you’ve been tested on it, too. That’s important because it helps build trust with clients by giving them confidence in your advice.

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