This article is written by Pranav Sethi, from SVKM NMIMS School of Law, Navi Mumbai. This article analyses the growth opportunities that Indian CA might consider to gain exposure to practicing CA in the USA.
Chartered Accountancy (CA) is India’s highest degree and among the most prestigious careers, however, it is not recognized internationally. But, the Certified Public Accountant (CPA) course is widely recognised around the world for people who want to pursue a career in accounting on an international level. Moreover, Certified Public Accountant (CPA) is the highest qualification in the United States (US).
In this article, we will discuss the step-by-step guide for ones who wish to make their way from an Indian CA to making their practice through a CPA course in the US.
Why should an Indian CA practice in the USA?
In India, when a person is working as a Chartered Accountant then they are involved in tax, regulatory compliance and advising on other areas for numerous organizations in India. Then comes the most sought-after alternative left in the search for new opportunities and the development of a respectable skill set in worldwide tax and regulatory compliance which is CPA (US).
Benefits pertaining to the CPA (US) license
The CPA certificate has numerous advantages, particularly for people who aim to work for enterprises located in the United States.
- To begin with, CPAs have a thorough understanding of US GAAP (Generally Accepted Accounting Principles) and federal income taxation in the United States. Furthermore, they are familiar with various accounting documentation utilized by publicly traded corporations in the United States.
- Only CPAs can sign an audit report for the representation of an accounting firm in several states. In some states, only CPAs are allowed to provide compilation solutions.
- Many large firms greatly like their senior financial executives to obtain a CPA certification to demonstrate their accounting knowledge and skills.
- The CPA credential is internationally recognized. Furthermore, international employers are aware that the CPA Exam’s material is focused on US accounting rules, regulations, and practices.
How can a CA in India pursue CPA (US)
To pass CPA tests, one must choose a board of accountancy that is recognized by the CPA. There are 55 state boards of accountancy in the United States as of now. Passing the Uniform CPA examination is necessary to obtain a membership in any of the states. Because there are separate boards, there are also separate ethics guidelines. They have their assessment methods for evaluating national and international student eligibility. For international students, NASBA examines their credentials (domestic graduation plus additional studies) using multiple boards’ evaluation criteria and assigns credit hours. Some boards demand 120 credit hours, while others demand 150.
Detailed steps for pursuing a CPA (US)
- Evaluating degrees
One must assess all of their degrees, certificates, and post-qualification courses with NASBA to ensure that they do not miss out on any opportunities to earn the required credit hours. For example – In Oregon State, a B. Com. combined with a CA would be sufficient to earn the required 120 credit points.
- The application process
Each time one wants to take one or more portions of the exam, then they must submit an application together with any required documentation and payments. After this, the board of accountancy or its designated agent will contact the person when their application has been evaluated.
The person may be asked to pay some or all of the application and examination fees when they submit their application. When paying the fees associated with the examination, follow the information provided by the board of accountancy, or its designated representative, because the rules differ with jurisdiction. One must make sure to follow their board or its designated agent’s most recent directions. Also, to follow the board of accountancy’s regulations for jurisdiction-specific needs.
The laws and regulations of the 55 U.S. jurisdictions specify the requirements to become a CPA, as well as the rights and obligations of a licenced CPA. On the NASBA website, one can find a general summary of CPA licensure requirements by jurisdiction.
- Stay updated on NTS (Notice to Schedule)
After the application has been processed then the candidate will receive a Notice to Schedule (NTS) from NASBA which means that they have been confirmed to be eligible to take one or more parts of the Uniform CPA Examination and have paid all fees.
The NTS will indicate the sections of the exam for which the candidate has been accepted and will allow them to contact Prometric to commence the scheduling phase. The candidate must ensure that all content on the NTS is correct when they receive it. One must make sure the name on the NTS matches the name on the identity documents that one will present at the exam centre during check-in. If the information is wrong, or if the candidate’s ID and NTS do not match, contact the board of accountancy or its designated representative right away to have it corrected.
Each recognised segment of the examination has an examination section identification number on the candidate’s NTS. This number is also used as the “Launch Code” (Password) for each approved segment of the examination. The Launch Code will be entered on the computer as part of the login process. The time period for which an NTS is valid (usually six months) is set by boards of accountancy. Schedule and take the examination section(s) before the time limit runs out.
- Choosing a state
For the purpose of evaluating one’s credentials, one must first choose a state. Each state has its own set of evaluation standards.
- Giving four exams
- BEC (costing + FM).
- Get trained with CPA
A one-year training period is required for practicing CPAs, just as it is for CA articleship.
- Applying for Visa
There is no condition that prevents anyone from obtaining a visa to take CPA tests. It should be remembered that tests can be taken when on a tourist visa. As a result, there is no link between CPA and US VISA. Exams are also available in Dubai and Qatar. In India, examination windows have opened recently in response to the epidemic and shutdown conditions. Before taking the exams, one should figure this out in greater depth.
Eligibility criteria, exam pattern, and the passing score for the CPA (US) exam
CPA Exam Eligibility
The AICPA, the world’s largest accounting organization, administers the CPA Exams. All candidates who pass all four CPA examinations are eligible for membership in the AICPA. The 55 state boards of accountancy in the United States that are members of NASBA, on the other hand, award CPA licenses. Each state board has its own set of qualifying requirements that an aspirant must meet to sit for the CPA tests in the United States.
The following are some general guidelines to follow:
- A master’s degree in commerce, accounting, or finance is required.
- To take the US CPA tests, an aspirant requires 120 credits, and to acquire his CPA license, he needs 150 credits.
- One year of university education in India is equivalent to 30 credits in the United States.
- In rare situations, first-year graduates of NAAC-A certified Indian universities are also eligible to take the CPA tests in the United States.
To pass the CPA exam and become a Certified Public Accountant, a candidate must obtain a score of 75 or above. The CPA exam is graded on a scale of 0-99, according to the AICPA. Candidates are frequently perplexed as to whether those 75 scores are percentages or points. It is critical to realize that to pass the exam, the candidate must score 75 points.
A multi-stage testing approach is used in the MCQ tests. This implies that when the candidate progresses through each phase, the burden of the next segment increases. If you do well on the first set of questions, the second set will be tougher. Difficult MCQs are given a higher value than easy MCQs. As a result, answering one difficult MCQ correctly will enhance your score more than answering numerous easy MCQs correctly.
Task-Based simulation scoring
These are challenges that you must solve based on certain situations and concepts. They’re usually matching or fill-in-the-blank questions.
Written communication scoring
This exam assesses your ability to communicate through exercises such as presentation and creative writing. Written communication is a large part of the BEC section of the CPA exam, and you must enter your answer in a blank word document.
How to maintain a balance between CPA studies and work
Taking the CPA exam while working full-time can be stressful at best and downright exhausting at worst. Fortunately, some strategies might assist you in balancing a full-time job with exam preparation. Before you begin studying for the CPA exam, consider the following suggestions to make your experience more enjoyable:
- Look for a software that uses effective learning technology – The most difficult component of studying for the CPA exam while working long hours is making sure you’re getting the most out of your time.
- The purpose is to hold as much information from your learning resources as possible and pass the exam in the shortest amount of time possible.
- While this may sound like a huge challenge, adaptive learning technology is making its way into the exam prep industry, and it’s a definite way to cut down on your CPA exam preparation time.
- Look for software that gives you knowledge in chunks and adjusts to your skills and limitations.
How can CPA (US) prove to be helpful in a career as an Indian CA
It has been observed that finding client opportunities for practicing chartered accountants in India from the perspective of a (US) CPA might be challenging. Job postings in major US multinational corporations (useful for experienced experts) and outsourcing firms/KPOs can be a good place to start.
If a person becomes a member of the Big 4 firms in India, then they can have the opportunity to work with a range of teams that service US organizations in and/or outside of India. The person’s intelligence is lined towards a unique set of skill sets and credible ones that play a major role in the long run. While they may not have an instant influence on remuneration, it may help one in the long run.
CPA can be pursued by those seeking outsourced employment from US-based organizations and people in India. As an accountant, a US CPA is a significant alternative for living outside of India, particularly in Canada and the United States. One can practice as a Certified Accountant, which allows them to perform the same services as CAs in India.
Let’s look at an example to help us comprehend. Vodafone used to be listed on the New York Stock Exchange, hence their financial statements were prepared in accordance with US GAAP. The financials would be signed by a licensed CPA in the United States. Rather than looking for a US CPA in or outside of India, it is preferable to become one.
Bright career opportunities that one might get exposed to after clearing the CPA (US) exam
CPAs monitor and examine financial records for organizations, governmental institutions, and individual clients at the most fundamental stage. The CPA license is not necessary for corporate or private accountants, but it is for public accountants who work independently or for firms that would provide accounting services to others.
Some CPAs prefer to specialize in one or more of the following areas:
- Internal auditing – Internal auditors examine risk management issues, financial data and operations, and control mechanisms to study and advise on a company’s financial accounts and activities. For this position, most employers prefer a CPA certification, however, the internationally renowned Certified Internal Auditor (CIA) accreditation is more likely to be needed.
- Accounting managers – Accounting managers develop budgets and financial documentation, assess and improve accounting systems, and communicate with a company’s management teams to assist them in making sound commercial decisions.
- IT auditing — Combining the IT and accounting professions, IT auditors analyze a company’s technological infrastructure and evaluating systems to guarantee security, correctness, and regulatory compliance.
- Tax accounting — A tax accountant’s responsibilities include everything from keeping tax records and filing tax returns to advising businesses on tax strategy, compliance, and tax regulatory frameworks.
The CPA is not only a sought-after and well-respected certificate, but it may also put an accountant on the higher end of the pay scale. Hiring managers in nearly every facet, according to the 2020 Robert Half Salary Guide for Accounting and Finance Experts, are scrambling to locate talented accounting and finance professionals, particularly CPAs.
For example, in the public accounting industry, the midpoint (or median national salary) for a senior manager/director in audit/assurance services is $134,000, and $136,750 for a senior manager/director in tax services.
How much do public accounting firms pay?
Accounting and associated services are provided by a public accounting firm to other businesses. CPAs who work in the public accounting businesses are typically engaged in reviewing clients’ financial statements, preparing tax filings, and aiding clients with financial record compilation. A public accounting firm might be a small business with a few employees or a large corporation with hundreds of staff.
The respective names are as follows for the Big 4 accounting firms:
- Deloitte – Deloitte Touche Tohmatsu;
- PwC – PricewaterhouseCoopers;
- EY – Ernst & Young;
- KPMG – Klynveld Peat Marwick Goerdeler.
Clients of these firms are located all around the world. Each of them employs hundreds and thousands of people. Deloitte, for example, employs nearly 250,000 people. On an entry-level basis, firms pay between $40,000 and $60,000 as a base remuneration. CPAs who have recently passed the CPA exam are paid roughly the same by PwC, EY, and KPMG. After years of exposure and experience in handling complex accounting transactions, through hard work, one might upscale their income to $100,000 or even more.
Accounting and auditing jobs are expected to rise by 6% between now and 2028, according to the Bureau of Labor Statistics (BLS). Because of a scarcity of qualified workers, accounting and finance job unemployment rates have fallen below the national average. CPAs are in higher demand than ever before, with public accounting firms and other organisations hiring at all levels. The majority of the hiring is for audit and tax specialists, but organisations are also looking for risk, compliance, and mergers and acquisitions experience. As CPAs get more experience, they are more likely to desire to take on more responsibility, make more strategic business decisions, and advance their careers.
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