CPA Educational Requirements for International Candidates

Hello, this is Stephanie from IPasstheCPAExam.Com. Today Ill go through the exam and licensing
requirements for international CPA candidates. This is Part 2 of a video series dedicated
to international candidates. For those who obtain education and work within
the US, please click here for this video.

Overview of the CPA Licensing System Since the establishment of the CPA designation
more than a hundred years ago, the CPA license has been granted by state board of accountancy
in each of the 50+ US jurisdictions. There is never a license-granting centralized
agency at the federal level. Because of this historical reason, each state
may have slightly different requirements to sit for the exam. The national associations of the CPA and state
boards, known as the AICPA and NASBA, have work hard towards a uniform CPA exam and licensing
requirements known as the 3Es.

That is, Education, Exam and Experience. For the education criteria, candidates should
attain at least a 4-year bachelor degree, plus 150 general credit hours of higher education. Most states require a certain number of accounting
and business courses. For the exam, all candidates must take the Uniform CPA exam administered by the AICPA.

For the experience, candidates are required to work in relevant field for at least a year, supervised and / or verified by a US CPA. Do You Qualify? The education system in your home country
could be very different from that in the US. Id like to take the time to explain the
differences and their implications. First, the Degree Requirement The US CPA qualification requires at least
a 4-year bachelor degree.

Many places, in particular the commonwealth countries, use a 3-year university system. In this case you will, unfortunately, have
a tougher time getting qualified for the exam, because the US uses a 4-year bachelor system. I understand that, in most cases, there is
an additional year in secondary school and therefore the total number of years in education
is the same; but given the US exam, I am afraid you need to follow their rules. If you fall into this category, you must take
an additional degree, preferably a 2-year masters degree in relevant field, to make
it work.

Some states may not accept correspondence
courses from non-US universities, so I would recommend getting this degree in a classroom
setting if possible. Also, if the additional degree is not related
to your original degree, it may not be counted for some states as fulfilling the degree requirement. The education is supposed to reflect a progressively
advanced study in a unified degree program. Second, the 150 Credit Hour Rule As part of the 3E requirement, candidates
are required to achieve an equivalent of a masters degree with 150 credit hours of
higher education.

For those who are not familiar with the US
credit hour system, one academic year roughly equals to 30 credit hours. Therefore, if you have a 3-year degree, youll
have around 90 credit hours. If you have a 4-year degree, youll have
around 120 credit hours. If you have a 3-year bachelor and 2-year masters
degree, then youll have 90 plus 60 credit hours which equals to 150 hours.

This 150-hour rule is not as rigid as the
degree requirement. As long as youve met the minimum degree requirement, that is, 4 years of university, you can take non-degree courses to make it up for the remaining 30 credit hours. In other words, these courses do not need
to be within a degree program, and they can be in any subject, as long as they are offered
by regionally accredited universities. I have readers who have taken fun courses,
such as introduction to golf and cooking classes in community colleges, and they are all counted.

Third, minimum accounting and business requirements The last part of the educational requirements
is the minimum accounting and business credits. There are 3 common pitfalls that you should
be aware of: Upper-Division Courses By upper-division, it means that the courses
must be at intermediate or advanced level. Some states accept any accounting courses,
but a few, such as Montana, only counts upper-division courses for the accounting credit requirements. In this case, even if you are a commerce major
in a 3-year university, you may not have enough of these accounting credit hours.

So make sure you check the requirements carefully
before applying. Federal taxation course It is also common for state boards to ask
specifically for at least 3 credit hours of US federal taxation course, given taxation
is a big part of the CPA exam. As an international candidate, your taxation course taken in your home country cannot be counted. Therefore, please expect to take one standard
course in US taxation if you register in one of these states.

They are offered online and the course actually
helps a lot in your preparation of the Regulation section of the CPA exam. Similarly, for a few states such as Colorado,
you may need to take specific courses such as the US GAAS, covering the US auditing standards. This course is also offered online and you
can check out the link in the description below this video. Note to non-accounting majors A few countries dont offer accounting majors.

Instead, they have a general education in
the university, similar to liberal arts offered in the US. For these candidates, youll need to make
up for additional accounting credit hours, either through a masters degree in accounting,
or by taking non-degree accounting courses. Other non-accounting majors should do the
same to fulfill the minimum course requirements. Note to ACCA members, Chartered Accountants
and other designation holders Since 2012, virtually all state boards have
stopped recognizing ACCA, CAs and most other professional qualifications as equivalent
to a US bachelors degree.

The only ones that are counted are the statutory
accounting bodies that have signed a mutual agreement with the US. Here is the list as of 2014. A few states may still count your ACCA and
CA courses towards the 150 credit hour requirement. Therefore, its still worth the effort to
include your certificates in the application.

Common Pitfalls Ive got quite a lot of emails asking for
help in the exam registration process. Here are the most common issues from international
candidates. First, degree not considered US equivalent It is possible that a candidate has 200 credit
hours but still not qualified for the CPA exam. Here are the possible reasons: the candidate
has a 3-year degree plus several professional qualifications or diplomas, or he has two
degrees that are not related to each other.

In this case, you dont have much choice
but to get an additional degree, preferably masters in accounting. Second, not enough accounting or tax credit hours This could happen if the state board does
not recognize some of your accounting or tax courses taken in your home country, or they
only recognize intermediate or advanced level courses, or that you are a non-accounting
major. Solution: either register in a state with
fewer accounting requirements, or take extra courses. In general, the second option is better if
you dont mind the extra time, money and effort.

Third, did not realize the exam requirements are different from licensing requirements Many states have a step-up requirement
when you apply for the license. For example, many states only require 120 credit hours to sit for the exam, but 150 hours to get the license. As of 2014, there are 35 states that fall
into this category. Other states may require extra accounting
credit hours for licensing.

Examples include California and Pennsylvania. For a smooth licensing process, make sure
you check not only the rules on the exam, but also those on the license. Other considerations Social Security Number Most state boards require the candidates to
submit their SSN, or social security number in the application. You get a SSN only if you are allowed to work
in the US.

Quite a few states can waive this requirement
if you fill out a form, or write them a letter, so generally this is not a big issue for international
candidates. The only state to watch out for is California:
SSN is not required to sit for the exam, but mandatory to get the license. If you dont want to get stuck in the middle
of the process, please select another state. Experience Requirements Fulfilling the experience requirement is part
of the 3Es, and is often another bottleneck for international candidates.

I will cover this in detail in the next video. For a smooth path towards CPA, please make
sure you can fulfill not only the CPA educational requirements but also those for the experience. I hope this video gives you an overview of
the education level required for the exam and the license. If you have any questions on your own situation,
please feel free to drop me a note in the comment section below.

You may also want to subscribe to my youtube
channel for more information on the CPA exam. Good luck for a smooth application process..