Typical College Courses for Aspiring CPAsCPAs must be broadly educated professionals who are technically competent and who possess the analytical abilities, communication, interpersonal skills, and cultural awareness that will enable them to serve the public in a complex and changing environment. To obtain these skills and abilities, students should have a good balance of accounting, business administration, and general/liberal arts) education. Following are some of the subject areas students should focus on in order to become well-rounded CPAs. Accounting Clearly, an understanding of accounting is essential for CPA candidates. Students should have an understanding of the functions of accounting, the underlying body of concepts that constitute accounting theory, and the application of those concepts to accounting problems and situations. Accounting education usually encompasses a number of basic areas, including auditing, taxation, financial accounting, and managerial accounting. - Financial Accounting. In recent years, the rate of change in financial accounting has accelerated. Innovations in business practice, such as the development of complex financing arrangements and business combinations, have caused modifications in accounting practice. As a result, the body of technical accounting knowledge in this area has grown substantially. Financial accounting theory will provide you with the conceptual framework of financial accounting and reporting. Applied financial accounting problems will acquaint you with the kind of problems that exists in the real world for CPAs, and how to apply accounting principles and practices to their solutions.
- Managerial Accounting. CPAs should understand accounting and control issues and approaches from a management perspective. Control is defined broadly as to how an organization's strategies and plans are carried out by managers and staff employees. Cost determination and analysis gives exposure to the broad range of managerial accounting concepts and their terminologies.
- Auditing. Statements of economic activity and events need to be verified to give added assurance of their reliability to users of such information. Auditing theory encompasses the concepts of gathering and evaluating financial information, the various purposes and contexts for auditing, the responsibilities and risks assumed in the process, and the nature of appropriate communication. This should be supplemented with an auditing practice course to get an understanding of how the audit itself is administered.
- Computer auditing. Another key auditing area is computer auditing. Computer auditing enables students to understand how technology can be used in a financial audit to obtain and develop evidence, provide decision support, collect and summarize data, and assist in administering the process. Since auditing is a practical art, it can best be understood through relevant audit problems and case studies.
- Taxation. Students who plan to work with financial problems should obtain adequate knowledge of taxes and their impact on decision making. Tax theory gives students an understanding of the evolution of taxation concepts and the tax system employed in the U.S. and the role of taxation as a source of revenue, among other things. In addition to gaining a broad background in the field of taxes, students should have a hands-on understanding of tax so they can apply tax principles and perform tax research leading to the solution of complex problems.
Behavioral Sciences
Additionally, the following areas of study are also often included within the major of accounting: - Behavioral Sciences. The behavioral sciences are an important tool for understanding management practices in business organizations. As an employee, a consultant, or a systems designer, and as one who must deal with his or her own clients and practice, the CPA must be aware of the human factors that are involved. The CPA needs to understand individual, group, and organizational behavior. Topics of specific interest include leadership and decision making, learning and problem solving, motivation, interpersonal communication, conflict management, work-team development, and innovation.
- Business Law. A CPA must be aware of the meaning of constitutionality and jurisdiction, the relationships between federal and state laws, and the roles of common law and equity, statutory law, and administrative regulation. In addition, the CPA needs to be familiar with matters such as the law of contracts, agency, commercial paper, sales, property, wills, estates, trusts, and the law of torts.
- Business Administration. Education in business administration enables students to understand the concepts, processes, and institutions involved in the production and marketing of goods and services, as well as in the financing of a business and other forms of organization.
- Communications. Effective communication, whether listening, speaking, or writing, is an indispensable skill for any professional. It is particularly important to CPAs because accounting consists not only of the identification, accumulation, and analysis of information, but also the communication of that information to others. CPAs should be able to convey messages clearly, concisely, and precisely. In a profession in which the primary resource is people, the development of interpersonal skills is mandatory.
- Economics. A CPA should have a basic understanding of both macroeconomics and microeconomics. By studying macroeconomics, student can acquire an overview of how the economy operates. This overview should include consideration of income measurement, monetary and fiscal theories and policies, employment, economic growth, international economics, business cycles, forecasting, and government policies related to taxation, spending, and economic planning.
A CPA should also understand microeconomics, or the effects of economic forces on organizations and the interactions between them. These include the relationship of price to demand, the factor of elasticity, and the effect of degrees of competition. The basics of macroeconomics and microeconomics should be supplemented with economic theory, the monetary system, and how the institutions of the banking system work.
- Ethics. Fundamental to any profession is the obligation of its members to maintain the highest standard of ethical conduct. A sense of responsibility to society and to one's own profession can begin with a foundation course in ethics. The CPA must be acutely aware of the underlying ethical concerns when analyzing business and accounting situations. CPAs must also have an in-depth understanding of the codes of ethical conduct of the state accountancy boards, the AICPA, and other accounting organizations in order to appreciate their legal and ethical responsibilities.
- Finance. CPAs need to understand the concepts and tools used in financial analysis, since one of the primary applications of accounting information, whether internal or external, is in finance. The CPA should know what data go into financial analyses and how they are used. He or she should possess knowledge of cash-flow perspectives, the process of acquiring and allocating capital, and the impact of inflation on accounting information. CPAs must understand valuation models and the effects on the valuation process of capital structure, dividend policy, timing of cash flow and risk. In addition, they should be familiar with the structure and terminology of domestic and international financial markets and institutions and with the various types of financial instruments,
- Globalization. Globalization is a fact of life in business today. Many domestic companies and corporations must do business internationally to compete. Because of this, an understanding of the international aspects of finance, economics, marketing, and accounting itself should be examined.
- Information Systems. CPAs need to be familiar with information systems, since they are the means by which the accounting function is carried out. In fact, the widespread use of computer and telecommunications technology makes an understanding of these technologies and their applications and limitations essential. CPAs should be familiar with the functions of and interrelationships between hardware components and with the capabilities and applications of software--from spreadsheet and database programs to word processing.
- Legal and Social Environment. CPAs must understand the regulatory and legal framework that government and the private sector provide to protect the public interest. This knowledge should include the responsibilities and functions of federal and state agencies, the courts, self-regulatory organizations, and other private and professional organizations, as well as the interactions among them. In addition, attention should be given to social forces that affect business, such as consumer activism, environmentalism, organized labor, urban blight, and minority rights.
- Marketing. CPAs need to have a general familiarity with how marketing functions and a more specific knowledge of operations that require accounting information in the making of business decisions and the solution of problems. CPAs should be familiar with how an organization combines its products and services with price, promotion, and distribution to meet the needs of the marketplace.
- Quantitative Applications. Quantitative methods are essential to the understanding and analysis of a wide range of business and accounting issues. A prospective CPA should become familiar with the quantitative techniques that apply to the solution of business and accounting problems, including the study of mathematics and statistics. Study of quantitative methods should include sampling, correlation and regression analysis, statistical decision theory, and the combination of subjective and objective evidence.
- A strong general education is also important because it forms the foundation for lifelong learning, development and growth. CPA candidates should have a general understanding of history, philosophy, languages, as well as the arts and sciences.
Source: AICPA
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