CPA License Requirements: What It Takes to Become a Licensed CPA

Last Updated: 2025

The CPA license is one of the most rigorous professional credentials in the United States. Earning it requires years of education, passing one of the most difficult professional examinations in any field, accumulating supervised experience, completing an ethics requirement, and satisfying state-specific criteria — all before you can use the three letters after your name. Maintaining it requires ongoing education and compliance with professional standards for the life of your career.

For individuals considering the profession, this article describes exactly what the CPA license requires. For clients of CPA firms, it explains why the credential carries weight and how to verify that any CPA you work with is actually licensed and in good standing.

Why the CPA License Is Unique Among Professional Credentials
The Four Components of CPA Licensure
Education Requirements: The 150-Hour Rule
The Uniform CPA Examination
The Four Exam Sections in Detail
Experience Requirements
The Ethics Examination
State-Specific Requirements and Variations
The Role of NASBA and the AICPA
How to Verify a CPA License
Continuing Professional Education (CPE) Requirements
License Renewal and Maintenance
Disciplinary Actions and License Revocation
Frequently Asked Questions
Conclusion

Why the CPA License Is Unique Among Professional Credentials

Many professionals use impressive-sounding initials after their names. The CPA stands apart for several reasons.

First, it is a state license — not a certification or designation issued by a private organization. Every CPA is licensed by a state board of accountancy, a government body with statutory authority to regulate the practice of public accounting. That means the license carries the force of law: practicing public accounting without a license (where a license is required) can result in criminal charges in most states.

Second, the barriers to entry are exceptionally high. The Uniform CPA Examination has a cumulative pass rate of roughly 50% across all sections — and candidates must pass all four sections within an 18-month window, starting from the date they pass the first section. Many candidates require multiple attempts over several years.

Third, the license is broad. Unlike many specialized financial credentials, the CPA license covers tax, audit, accounting, financial reporting, and business advisory services — and CPAs have unlimited representation rights before the IRS.

For anyone hiring an accountant or tax professional, the CPA license is the highest standard of accountability: state licensing, mandatory continuing education, professional ethics rules, and a disciplinary system that can revoke the license.

The Four Components of CPA Licensure

In virtually every US state, CPA licensure requires satisfying all four of the following:

Education: Completion of 150 semester hours of college education, including specific accounting and business coursework
Examination: Passing all four sections of the Uniform CPA Examination
Experience: Completing the required period of supervised professional experience (typically 1-2 years)
Ethics: Passing an ethics examination (typically the AICPA's Professional Ethics Exam or a state equivalent)

These requirements must all be satisfied before a state board will issue a license. In most states, the order is flexible — candidates can sit for the exam before completing all experience, for example — but all four components must be complete for licensure.

Education Requirements: The 150-Hour Rule

The 150-Hour Requirement

All US states require CPA candidates to complete 150 semester hours of college education before licensure. This is equivalent to five years of full-time college study. The traditional four-year bachelor's degree typically produces 120-128 semester hours, leaving a gap that candidates fill through a fifth year of undergraduate study, a master's degree, or other graduate coursework.

The 150-hour requirement was adopted gradually by states over the 1990s and early 2000s, driven by the AICPA and NASBA's joint effort to raise educational standards for the profession. The requirement reflects the complexity of modern tax, accounting, and audit practice.

Required Coursework: Accounting Credits

Most states require a specific number of accounting credit hours within the 150-hour total. Requirements vary by state but typically include:

Financial accounting: Coverage of GAAP-based financial statement preparation, the accounting cycle, and financial reporting
Auditing: Auditing theory, standards, and procedures
Taxation: Federal income tax for individuals and business entities
Cost/managerial accounting: Cost analysis, budgeting, and management accounting
Accounting information systems: Internal controls and accounting technology

The typical requirement is 24-30 semester hours of upper-division accounting coursework. Some states specify the exact courses; others accept any accounting credits toward the total.

Required Coursework: Business Credits

In addition to accounting courses, states typically require 24-36 semester hours of general business education, covering areas such as:

Business law and contracts
Economics (macro and micro)
Business statistics and quantitative methods
Finance
Management and organizational behavior
Business ethics
Marketing

The Master's Degree Path

The most common way candidates satisfy the 150-hour requirement is by completing a Master of Accountancy (MAcc), Master of Science in Accounting, Master of Taxation (MTax), or Master of Business Administration (MBA) after a bachelor's degree. These programs typically add 30-36 credit hours, bridging the gap between the 120-hour bachelor's degree and the 150-hour requirement.

Many university accounting programs are specifically structured to be CPA-pipeline programs — designed to produce candidates who are exam-eligible upon graduation with a master's degree.

Five-Year Bachelor's Degree Programs

Some universities offer integrated five-year bachelor's/master's programs in accounting that deliver 150+ hours and produce exam-eligible graduates. These programs are increasingly popular because they provide a streamlined path to exam eligibility.

The Uniform CPA Examination

The Uniform CPA Examination (commonly called the CPA Exam) is developed and maintained jointly by the AICPA and administered through NASBA and the testing company Prometric. It is the same exam in every US state — "uniform" refers to the consistency across jurisdictions.

The Exam Format

The CPA Exam is delivered as a computer-based exam at Prometric testing centers. Each section is a multi-hour exam consisting of:

Multiple-choice questions (MCQs): Standard four-choice questions testing knowledge of specific rules, standards, and concepts
Task-based simulations (TBSs): Complex, multi-step scenarios that require candidates to apply knowledge to realistic situations. TBSs may involve spreadsheets, research databases, authoritative literature, or document analysis
Written communication tasks: Appear in certain sections; require candidates to draft professional communications (emails, memos, letters) addressing an accounting or audit issue

The relative weight of each component varies by section. All sections include MCQs and TBSs. The exam is scored on a 0-99 scale; a score of 75 or above is a pass.

Exam Availability

The CPA Exam is offered continuously throughout the year at Prometric testing centers. Candidates can schedule exams at any available time, subject to application approval from their state board. The elimination of fixed "exam windows" in 2020 significantly improved the candidate experience.

Pass Rates and Difficulty

The Uniform CPA Examination is genuinely difficult. Published pass rates by section vary, but across all sections, approximately 45-55% of candidates pass on any given attempt. Some sections historically have lower pass rates than others. Most candidates require multiple attempts across one or more sections before achieving all four passes.

The exam tests not just factual recall but the application of technical knowledge to novel situations. The TBS format is particularly challenging because it requires candidates to demonstrate professional judgment, not just memorization.

The Four Exam Sections in Detail

FAR: Financial Accounting and Reporting

FAR is widely considered the most comprehensive and challenging section of the CPA Exam. It tests knowledge of:

Financial reporting under US GAAP: Financial statement preparation, presentation, and disclosure for various entity types — public companies, private companies, not-for-profit organizations, and governmental entities
The conceptual framework: The FASB's framework for financial reporting, including recognition, measurement, and disclosure concepts
Revenue recognition: ASC 606 and its five-step model for recognizing revenue from contracts with customers
Leases: ASC 842 and the classification of operating vs. finance leases
Business combinations: ASC 805 acquisition accounting, including goodwill, fair value measurements, and consolidation procedures
Governmental accounting: GASB standards for state and local governments, including fund accounting and government-wide financial statements
Not-for-profit accounting: FASB standards for nonprofit entities, net asset classifications, and restricted gift accounting

FAR has the highest volume of technical content of any section. Most candidates allocate the greatest study time to FAR.

AUD: Auditing and Attestation

AUD tests knowledge of auditing standards, audit procedures, and professional responsibilities:

Generally Accepted Auditing Standards (GAAS): The fundamental standards that govern how audits are planned and conducted
Audit risk and materiality: The auditor's framework for assessing what could go wrong and how much error is acceptable
Audit procedures: Substantive procedures (testing account balances) and tests of controls (evaluating the effectiveness of internal controls)
Audit reports: The standard audit report, modifications for qualified opinions, adverse opinions, and disclaimers of opinion
Internal controls: The COSO framework, assessment of control risk, and reporting on internal controls under PCAOB AS 2201 (for public company audits)
Professional responsibilities: Independence standards, ethics rules, and quality control standards

AUD also covers related services: reviews, compilations, agreed-upon procedures, and assurance on various types of information.

REG: Regulation

REG tests federal taxation and business law:

Federal Taxation:

Individual income taxation (Form 1040 and all schedules) — income recognition, exclusions, deductions, credits, and alternative minimum tax
Business entity taxation — sole proprietorships, partnerships (Form 1065), S-corporations (Form 1120-S), C-corporations (Form 1120)
Property transactions — basis, realization, recognition, character of gain/loss, like-kind exchanges, installment sales
Gift and estate taxation — basic concepts, annual exclusions, unified credit
Multi-jurisdictional taxation — nexus, apportionment concepts

Business Law:

Agency law — authority, liability, termination
Contracts — formation, performance, breach, remedies
Secured transactions under UCC Article 9
Bankruptcy — Chapter 7 and Chapter 11 basics
Business structures — formation, liability, governance of partnerships, LLCs, corporations

REG has the broadest coverage of federal tax of any exam section and is the primary tax-focused section of the CPA Exam.

BEC (Legacy) / Discipline Sections (Evolution Exam)

Beginning in 2024, the CPA Exam transitioned to a new structure under the "CPA Evolution" initiative. The legacy Business Environment and Concepts (BEC) section has been replaced by a three-discipline structure, where candidates choose one of three discipline sections:

BAR (Business Analysis and Reporting): Focuses on financial statement analysis, technical accounting for complex transactions, and advanced financial reporting topics. Relevant for candidates pursuing careers in audit or technical accounting.

ISC (Information Systems and Controls): Focuses on information technology, cybersecurity, and the relationship between IT systems and financial reporting controls. Relevant for candidates in audit, advisory, or IT risk roles.

TCP (Tax Compliance and Planning): Focuses on advanced individual and business taxation, including more complex tax situations, planning strategies, and multistate issues. Relevant for candidates pursuing tax practice.

Most candidates sitting the exam for the first time under the Evolution structure choose the discipline most aligned with their career goals. Under the transitional rules, candidates who have already passed BEC under the legacy structure retain that credit.

Experience Requirements

The General Requirement

After passing the exam and completing the education requirement, candidates must also satisfy an experience requirement before receiving their CPA license. Requirements vary by state, but the typical standard is:

One to two years of experience in public accounting, private industry, government accounting, or academia
The experience must include work that provides a "real and substantial understanding" of accounting, financial reporting, taxation, or auditing
The experience must generally be verified by a licensed CPA who supervised the candidate's work

What Counts as Qualifying Experience

In most states, qualifying experience can be earned in:

Public accounting firms: Experience in tax, audit, advisory, or general accounting practice
Private industry accounting: Controller, accounting manager, internal audit, or staff accountant roles
Government: Federal, state, or local government accounting and audit roles
Academia: Teaching accounting at the university level

The key is that the experience must involve substantive accounting work. Administrative, clerical, or tangentially related work generally does not qualify.

The Supervising CPA Requirement

Most states require that the experience be verified by a licensed CPA who can attest that the candidate's work was of sufficient quality and scope to meet the experience standard. The supervising CPA signs off on the experience documentation submitted to the state board.

If you work in an environment where no CPA is available to supervise your work — for example, in a small business where you're the only financial professional — you may need to arrange for an outside CPA to periodically review your work and attest to its quality.

The Ethics Examination

Most states require candidates to pass an ethics examination before receiving their license. The most widely used ethics exam is the AICPA's Professional Ethics: The AICPA's Comprehensive Course (For Licensure), which is an open-book, self-study course and exam that covers the AICPA Code of Professional Conduct. The passing score is typically 90% or above.

Some states have their own ethics examination that covers state-specific ethics rules and legal standards. A few states accept the AICPA ethics course but require additional state-specific components.

The ethics examination is typically the easiest component of the licensure process, but it is substantive — the AICPA's Code of Professional Conduct covers independence, integrity, objectivity, confidentiality, and professional competence in detail.

State-Specific Requirements and Variations

While the CPA Exam is uniform across all states, licensure requirements vary at the state level. Most states follow the NASBA-recommended model rules, but there are important variations:

One-Year vs. Two-Year Experience Requirements

Some states require only one year of qualifying experience; others require two. A few states allow different experience paths with different time requirements depending on the nature of the work and the level of education.

Residency Requirements

Some states require CPA candidates to be residents of or employed in the state. Most states have eliminated or relaxed this requirement in recent years, particularly as remote work has made geographic barriers less meaningful.

International Reciprocity

Through NASBA's Mutual Recognition Agreements (MRAs), licensed accountants from certain foreign countries (including Canada, Australia, Mexico, and several others) can obtain US CPA licenses through a streamlined process without sitting the full exam.

Substantial Equivalency

Most states have adopted "substantial equivalency" standards that allow licensed CPAs from other states to practice in their state without obtaining a separate local license, provided their home state's requirements meet the substantial equivalency standards. This facilitates multi-state practice for CPAs.

The Role of NASBA and the AICPA

Two national organizations oversee CPA licensure standards:

The American Institute of CPAs (AICPA) develops and maintains the Uniform CPA Examination, publishes professional standards (GAAS, GAAP guidance, and ethics rules), and sets model licensing requirements. The AICPA is the national professional organization for CPAs.

The National Association of State Boards of Accountancy (NASBA) facilitates the uniform examination process, manages CPA candidate score reporting, administers the CPA Examination Administration (including the National Candidate Database), and recommends model licensing legislation to state boards. NASBA is the coordinating organization for the 55 state boards of accountancy (50 states plus DC, Puerto Rico, Guam, the US Virgin Islands, and the Northern Mariana Islands).

State boards of accountancy are the actual licensing authorities — they issue licenses, enforce professional conduct standards, and conduct disciplinary proceedings.

How to Verify a CPA License

Before hiring a CPA or relying on work signed by a CPA, you should verify that their license is active and in good standing. This is a simple, five-minute process.

State Board License Lookup

Every state board of accountancy maintains a public database of licensed CPAs. To verify a license:

Search for "[State Name] board of accountancy CPA license lookup"
Navigate to the public verification portal (most state boards have one)
Search by name, license number, or firm name
Confirm that the license status is active (not expired, suspended, or revoked)
Check for any disciplinary actions on record

NASBA's CPA Verify

NASBA operates CPAverify.org, a centralized lookup tool that aggregates CPA license information from most participating state boards. This is a convenient single source for verifying licenses across multiple states.

What to Look For

Verify:

Active license status (not expired or lapsed)
No disciplinary history (suspensions, revocations, or formal reprimands)
The license is in the state where the CPA is practicing (or that they're operating under substantial equivalency in your state)

Disciplinary history is a significant red flag. Disciplinary actions against CPAs are public record and include suspensions, revocations, censures, and consent orders. Any disciplinary history warrants a direct conversation with the CPA before proceeding.

Continuing Professional Education (CPE) Requirements

Obtaining a CPA license is the beginning, not the end. Licensed CPAs must complete ongoing continuing professional education to maintain their license.

Standard CPE Requirements

Most states require 40 hours of CPE per year (or 80 hours per two-year reporting period). The CPE must cover professional topics relevant to accounting practice.

Ethics CPE

Within the total CPE requirement, most states require a specific number of ethics CPE hours each reporting period. Common requirements are 4 hours per year or 8 hours per two-year period.

Accounting and Auditing CPE

CPAs who perform attest services (audits, reviews, compilations) typically have additional requirements for CPE in accounting and auditing topics.

CPE Subjects

Qualifying CPE topics include:

Tax law updates and advanced taxation
Audit standards and techniques
Financial reporting and GAAP updates
Technology and accounting systems
Ethics and professional responsibilities
Business advisory and management topics
Specialized industry training

CPE can be earned through AICPA courses, state CPA society programs, accounting conferences, webinars, in-house training, and other approved providers.

License Renewal and Maintenance

Renewal Periods

Most states require CPA license renewal every one or two years. Renewal typically involves:

Certifying that CPE requirements have been met
Paying a renewal fee
Confirming no changes to licensee information
Disclosing any criminal convictions, disciplinary actions from other jurisdictions, or other required disclosures

Inactive and Retired Licenses

Many states offer inactive or retired license status for CPAs who are no longer in public practice. Inactive CPAs may be subject to reduced CPE requirements but typically cannot use the CPA designation in connection with services to the public.

Reciprocal Licensing

CPAs who move to a new state can obtain a license in their new state through reciprocal licensing, typically by demonstrating that their existing license meets the new state's requirements and satisfying any state-specific requirements.

Disciplinary Actions and License Revocation

State boards of accountancy have authority to discipline CPAs who violate professional standards, state laws, or ethical rules. Disciplinary actions can include:

Formal reprimand or censure: A formal written rebuke with no practice restrictions
Probation: Practice under specified conditions and supervision for a defined period
Suspension: Temporary loss of the right to use the CPA designation or practice public accounting
Revocation: Permanent loss of the license (though reinstatement may be possible after a specified period)
Voluntary surrender: A CPA surrenders their license rather than face disciplinary proceedings

Grounds for Disciplinary Action

Common grounds for disciplinary action include:

Conviction of a crime (particularly fraud, theft, or financial crimes)
Tax fraud or violations of tax law
Violations of the AICPA Code of Professional Conduct
Failure to maintain CPE requirements
Misrepresentation to clients
Violations of securities laws
Issuance of fraudulent or misleading financial statements

The AICPA Joint Ethics Enforcement Program

The AICPA administers a Joint Ethics Enforcement Program (JEEP) with participating state CPA societies to investigate and act on ethics complaints against AICPA members. Serious matters are referred to state boards.

Why This Matters to Clients

The existence of a meaningful disciplinary system is one of the core reasons the CPA license provides consumer protection. If a CPA behaves unethically or incompetently, there is a formal mechanism — the state board — to investigate and potentially remove their license. This accountability doesn't exist for unlicensed tax preparers or non-credentialed accountants.

Frequently Asked Questions

Q: How long does it take to become a licensed CPA?

Most candidates complete the process in 5-7 years from starting college. A typical timeline: four years for a bachelor's degree, one additional year for a master's degree (satisfying the 150-hour requirement), CPA exam completion during graduate school or within 1-2 years after, plus 1-2 years of qualifying experience. Some highly focused candidates complete everything in 5-6 years; others take longer, particularly if they need multiple exam attempts.

Q: Can you call yourself a CPA without a license?

No. Using the CPA designation without a valid license from a state board of accountancy is illegal in all US states. It's a criminal offense in many states. People representing themselves as CPAs without valid licensure are committing fraud. If you have any doubt about whether someone is a licensed CPA, verify through your state's board of accountancy.

Q: Does the CPA license expire?

The license must be renewed periodically (typically every 1-2 years) and requires CPE completion for renewal. A CPA who doesn't renew or doesn't meet CPE requirements may lose their license or have it lapse — which is why verification matters. Always verify current license status rather than assuming that someone who was a CPA five years ago still holds an active license.

Q: What happens to a CPA's work if their license is revoked?

If a CPA's license is revoked, they can no longer sign tax returns or financial statements as a CPA. Clients typically need to seek a new CPA to take over the work. Tax returns prepared by a CPA before the revocation are not automatically invalidated, but any returns the former CPA signed after their license was revoked or suspended may be treated as if prepared by an unlicensed preparer.

Q: Is the CPA license the same as being a "certified accountant"?

No. "Certified accountant" is not a specific legal designation in the US — anyone could theoretically describe themselves with that phrase. The CPA license is a specific state-issued license with a defined legal meaning. Other credentials exist (CMA, CFA, CFE, etc.) but none carry the same legal authority or scope as the CPA license.

Conclusion

The CPA license is the gold standard of the accounting profession for good reason. The education requirement (150 semester hours), the examination (one of the most difficult professional exams in the US), the experience requirement (1-2 years of supervised practice), the ethics examination, and the ongoing CPE and renewal requirements together create a high-quality standard for professional competence and ethical behavior.

For consumers and business owners, the CPA license provides genuine protections: a verifiable credential, a disciplinary system, mandatory continuing education, and a professional ethics framework. When you verify that a CPA is licensed and in good standing, you're confirming that they've cleared significant professional hurdles that most people who call themselves "accountants" or "tax professionals" have not.

For aspiring CPAs, the road is demanding but clear — education, examination, experience, ethics, and licensure — with a well-defined path through each requirement and strong career opportunities on the other side.

Our firm employs licensed CPAs who maintain their credentials through ongoing education and strict adherence to professional standards. Contact us to learn more about how we can serve your tax and accounting needs.

Related Articles:

Table of Contents