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Thursday, September 3, 2009

What Accounting Classes Should I Take to Prepare for the CPA Exam?

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As the world’s leading team of CPA Exam experts, we get asked a lot about which accounting classes to take in college to ensure proper preparation of topics covered on the CPA Exam. There are two parts to answering this question: 1 – you must take enough units to meet your jurisdiction's education requirements to sit for the exam, and 2 – you must understand the topics tested on the CPA Exam and how to properly select elective courses that cover relevant material. Let’s discuss both situations.

Part 1: Determine how many college credits are required in your jurisdiction.
Depending on the state you wish to obtain your CPA license, you need to meet a certain amount of education requirements in order to sit for the CPA Exam, and for some states you will need even more education units to obtain licensure.

In California, for example, students may sit for the CPA Exam with 120 semester credits (24 of these units must be in accounting, 24 must be in other business classes). However, in order to obtain a California CPA license via Pathway 2 license, you need to complete an additional 30 semester credits for a total of 150 semester credits.

In Illinois, however, you need 150 semester credits in order to even sit for the exam, where 24 semester credits must be in accounting classes and 24 semester credits must be in business classes. No additional units are needed to obtain licensure.

The first step in ensuring you’re setting yourself up for future exam success is to find your states CPA Exam requirements or consult with a CPA Licensure expert. Make sure you obtain the right type and correct amount of units you need!


Part 2: Understand the topics tested on the CPA Exam & choose appropriate elective courses
If you are enrolled in an accredited accounting program, you will be required to take courses on many of the topics that will later show up on the CPA Exam. These classes include (but are not limited to) introduction to accounting principles, intermediate accounting 1 and 2, individual tax, corporate tax, auditing, cost accounting and managerial accounting.

While you obviously need to complete these core accounting classes to complete your degree, most schools allow accounting majors and minors to select a variety of accounting class electives. This is a great opportunity to pick classes that cover topics on the exam so that you can begin to feel comfortable with the material.

Let me clear up any mis-conceptions. In all reality, what you study in college doesn’t much matter on exam day. The CPA Exam covers many topics but doesn’t go too far into any single concept. The exam is like a huge lake that’s only one inch deep – it covers a lot of area but isn't that deep in any particular part. The second reason why it doesn’t generally matter what you studied in college is that so much time lapses between when you take your courses in college and when you actually sit for the exam. Even if you received an A++ in Principles of Auditing semester 2 of your Junior year, you’re likely to have forgotten the steps in the Audit Process or all 10 of the Genarally Accepted Accouning Standards by the time you graduate, study CPA review, apply for the CPA Exam, and actually sit. This is one of the many reasons why properly preparing for the CPA Exam with a proven CPA review course is so important if you want to pass the exam.

With that said, just because you can’t ace the CPA Exam by taking a magic mix of courses in college doesn’t mean you should throw away all opportunities to learn topics that will eventually show up on the exam and in the real-world.

Below is a list of common courses (both required and electives) that most accredited Accounting Programs offer. Keep in mind all accounting programs have unique names for their individual accounting programs, so use this list as a topic guideline, not as a strict checklist. Choose your electives carefully and pick courses that cover topics in the following areas.


Financial Accounting
Intermediate 1, 2, (some schools even have intermediate 3)
Government & Non-Profit (often referred to as Advanced Accounting)

Auditing
Principles of Auditing
Audit Standards and Planning
Internal Audit & Control
Audit Sampling & Reports
Auditing Compilations & Reviews

Business & Environmental Concepts
Econ – Micro & Macro
Cost Accounting
Managerial Accounting
Accounting Info Systems

Regulation
Individual Taxation
Corporate Taxation
Business Law

Make sure to also check out options like CPA Review for College Credit if you do need extra electives. This can save time and money by letting you receive credits and study for the exam at the same time.

Make sure you do the research now to ensure your future success on the CPA Exam. There is no magical list of exactly what courses you should take to pass the exam, nor are there any exact required classes to sit for the exam (just general areas like accounting, business, etc.) But enrolling in accounting electives that focus on exam topics can only help you down the road and give you a first look at the information.


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