This article is written by Ms Kishita Gupta from Unitedworld School of Law, Karnavati University, Gandhinagar. In this, she has explained some aspects of the CPA exam of the USA and the procedure to complete it after one has attained the CA certificate in India.
Table of Contents
Introduction
Are you a Chartered Accountant (CA) qualified in India and now planning to settle in the USA? Are you confused about how getting both the qualifications of CA & CPA will help you out? If yes, then you have landed on the perfect article. In this article, the author has discussed various aspects and the procedure that the Indian CA has to follow in order to qualify as the Certified Public Accountant (CPA) in the United States of America. Previously, students/CPA aspirants had to pay extra for airfare and lodging because they could only take the CPA tests in the United States. However, now the students will be able to take these tests in India, thanks to the establishment of test centres in India by NASBA, AICPA and Prometric.
Is Indian CA & the USA CPA the same?
CA stands for Chartered Accountant and these exams are conducted by Institute of Chartered Accountants of India (ICAI) and the course takes an average of 4 to 5 years to complete while CPA stands for Certified Public Accountant and these exams are conducted by American Institute of Certified Public Accountant (AICPA) and it takes a minimum of 7 months and a maximum of 18 months to complete.
Let’s understand the difference between the two through the following table:
| Basis | CA (India) – Chartered Accountant | CPA (USA) – Certified Public Accountant |
| Institution | Conducted by the Institute of Chartered Accountants of India (ICAI) | Conducted by the American Institute of Certified Public Accountant (AICPA) |
| Course Duration | 4 to 5 years | 7 to 18 months |
| Accounting standards | It follows the Indian Generally Accepted Accounting Principles (GAAP) | It follows the USA Generally Accepted Accounting Principles (US GAAP) along with the International Financial Reporting Standards (IFRS). |
| Recognition | Opportunities are limited to India & a few other nations such as Australia, Bahrain, Canada, Djibouti, Dubai, Ireland, U.K. | Various opportunities are available to the CPA professionals in the USA & also globally. |
| Work Experience | To start practicing as a CA, a minimum of 3 years of articleship is required under a registered CA firm. | For CPA, a minimum of 1 year of experience is required in accounting or finance. |
| Examination | CA is a three-level exam, Foundation, Intermediate & Final which includes 20 papers. One has to clear all 20 papers to qualify as CA. | CPA, on the other hand, is a single level exam that includes 4 papers both in objective and subjective format. |
| Career opportunities | The CA designation will open up a wide range of opportunities in fields such as auditing, taxation, corporate finance, and corporate law. After earning your CA certification, you have the option of working for one of the major accounting companies or starting your own independent practice. | The CPA designation will open up a world of possibilities. You can work in a variety of accounting disciplines after earning your CPA certification, including international accounting, internal and external auditing, consulting services, forensic accounting, assurance services, taxation and financial planning, and so on. Because of its international recognition, you can find the best job opportunities in many nations. |
Is it beneficial to get both the qualifications?
Those who want to work in the USA
If you just plan to work in the US, you may only need the CPA and not the CA.
Those who want to work in India
You may only require the Indian CA if you plan to work in India for non-US corporations or companies that are not publicly traded in the United States.
When to consider both qualifications?
However, you should consider acquiring the CPA in addition to the CA if you ever wish to work for a company that is traded on the US market, whether it is situated in the US or India, or if you ever expect to need to grasp US GAAP in addition to International Financial Reporting Standards (IFRS).
General procedure to be followed
Check the eligibility criterion for CPA (USA) for the Indian CAs
India’s higher education system is based on the same three-year bachelor’s degree structure as the United Kingdom. In India, a year of bachelor’s degree study is equivalent to around 30 credit hours in the US system. As a result, a bachelor’s degree in India is equivalent to 90 credit hours in the United States. This is not the same as the four-year bachelor’s degree that is frequently awarded in the United States. A four-year bachelor’s degree in the United States is worth 120 credit hours.
Therefore, applicants must have finished either a bachelor’s degree or 120 college credit hours to be eligible for the CPA test. Since the education requirements vary by state, the fundamental criterion is that candidates have earned either a bachelor’s degree or 150 college credit hours.
The BCOM (or Bachelor of Commerce) is a common degree for Indian professionals interested in pursuing a career in accounting. However, because the degree is only worth roughly 90 US credit hours, you’ll need to earn your CPA certification with a second degree or more education hours. An MCOM or a comparable master’s degree in accounting or taxes may be of interest to you. If you have a first-class B.Com degree from a NAAC “A” accredited university, you will be eligible for an additional 30 credits, bringing your total credits to 120.
However, if you simply have a BCOM and the CA credential, being a CPA is becoming increasingly difficult. Previously, the CA was evaluated as 40 US education credit hours in several US jurisdictions. Candidates might complete the 120 credits required to sit for the exam in most states by combining a 3-year BCOM (equal to 90 credits) with a CA (formerly equivalent to 40 credits). They could then take a couple more courses to fulfil the 150-credits minimum for a CPA license. Some states, however, require that candidates finish a minimum of 150 college credit hours before taking the exam, and you’ll be fine if you meet any of the following criteria:
- B.Com + MCom/MBA equalling 150 credits
- B.Com + CA/CS/CWA equalling 150 credits
Check the CPA licence requirements
The CPA eligibility standards are governed by the NASBA (National Association of State Boards of Accountancy) and the state board of accountancy. The criteria for the CPA examination differ by state. Each state’s board of accountancy has its own set of standards, however, most states have a common set of requirements for candidates to sit for the CPA exam.
The candidate must pass the 4 Es to obtain the CPA licence:
- Education
Many states, in general, require 150 credit hours in specified courses from a university or a NASBA-accredited college.
- Exam
The candidate must pass the single level 4 papers CPA examination.
- Experience
Must have 2,000 hours of taxation, auditing, accounting, and management consulting expertise with a minimum age of 18 years.
- Ethics
Some states in the USA also require a candidate to pass the state ethics examination.
Send the transcripts for eligibility evaluations
If you are a CA, you must next apply for your transcripts from your individual colleges or the ICAI. To get an application, contact a state board of accountancy. To be eligible for the CPA exam, you must have your academic history verified by a recognized review body, such as World Education Services in the United States. Send them your transcripts so they can determine whether you have the required amount of US equivalent credits. Your evaluators will send the results of your evaluation to the state board, which will contact you to confirm your eligibility.
Applying to take the CPA exam
Application procedure
If you wish to sit for the exam in a jurisdiction supported by NASBA’s CPA examination Services (CPAES), you may apply online through CPA Central. If you wish to sit in one of the other jurisdictions, please contact the concerned board of accountancy directly.
The candidates from India must remember not to submit their applications until their foreign education evaluation is completed. The following is the application procedure:
- Each time you want to take one or more portions of the exam, you must submit an application together with any required documentation and fees. Your board of accountancy or its designated agent will contact you when your application has been evaluated.
- The name on your application must match the name on your identification that you want to present to the testing centre. Note that the middle initial can be used in place of the middle name (for example, your NTS reads Michael A. Smith, while your driver’s license says Michael Albert Smith), or vice versa.
- Make sure you follow your board of accountancy’s regulations for jurisdiction-specific needs. You are ultimately responsible for adhering to the rules and completing all components of the examination within the period and in accordance with the standards set forth by your Board of Accountancy.
Pay application & examination fees
Taking the exam entails two types of fees which must be paid to either your board of accountancy or its designee or to NASBA. The sections that must be completed are as follows:
- Application fees: This fee is established by and paid to your board of accountancy or its designated agent.
- Examination fees: This fee is paid either to your board of accountancy, its designated agent or to NASBA. Examination fees are established by boards of accountancy, NASBA, the AICPA and Prometric as per your selected jurisdiction’s requirement.
Receive your Notice to Schedule
You will receive a Notice to Schedule (NTS) from NASBA once your application has been processed and you have been determined to be eligible to take one or more parts of the Uniform CPA examination and have paid all the fees. You will receive one NTS, which will indicate the sections of the exam for which you have been accepted and will allow you to contact Prometric to begin the scheduling process.
Verify that all information on the NTS is correct when you receive it. Make sure the name on the NTS matches the name on the identity documents you’ll present at the exam centre during check-in. If the information is wrong, or if your ID and NTS do not match, contact your board of accountancy or its designated representative right away to have it corrected. The NTS includes a “Launch Code” which is the login password for your computer as part of your login process.
The examination section identification number on your NTS will be required to view your score online in those states that release scores online. Keep your NTS till you’ve received your results. Your NTS cannot be reproduced once you have taken the exam.
Schedule the CPA exam
The CPA exams are conducted in 4 different quarters. After a candidate completes all the above-mentioned procedures, they will have to, at last, schedule their exam as per their preparations and convenience.
It is strongly advised that you wait until you are ready to take the CPA exam before applying for a section. You will not be able to extend the time or request a refund if you do not complete all of the sections you enrolled for before the NTS ends. Please note that canceling an exam appointment does not affect your NTS expiration date.
Following are the quarter options available for the candidates to choose from:
- Quarter 1 – January 1 to March 10
- Quarter 2 – April 1 to May 31
- Quarter 3 – July 1 to September 10
- Quarter 4 – October 1 to December 10
Prometric will send you an email confirmation once your exam has been successfully scheduled. It is your duty to double-check that the information in the email confirmation corresponds to the specified date, time, and place. Contact Prometric if you do not receive an email or if the information in the email is wrong. If you require directions to the test centre, please inquire with the customer service person while making your appointment. In certain urban locations, there are multiple test centres, so make sure you know which one you’ll be taking your exam at.
Conclusion
The article has covered various aspects of the CPA (USA) exam that the person appearing, in our case, the Indian CA should know about, if they are planning to appear for the CPA examinations.
Join us for an exclusive 3-day boot camp on – International Opportunities for Chartered Accountants / Company Secretaries in US Corporate Law from 9th to 11th October, 6-9PM.
Click here to register.
References
- https://nasba.org/app/uploads/2018/01/Candidate-Bulletin-2017-Final-122117.pdfÂ
- https://www.wallstreetmojo.com/cpa-vs-ca/Â
- https://ipassthecpaexam.com/indian-ca-for-us-cpa/Â
- https://www.simandhareducation.com/blog/post-how-can-indian-students-become-us-cpas-.phpÂ
LawSikho has created a telegram group for exchanging legal knowledge, referrals, and various opportunities. You can click on this link and join:
https://t.me/joinchat/J_0YrBa4IBSHdpuTfQO_sA
Follow us on Instagram and subscribe to our YouTube channel for more amazing legal content.
