Discussion:EA vs. CPA exam

The EA exam is an exam covering basic tax law. The CPA exam is an exam covering accounting, business law, auditing, and accounting. Most states are requiring at least 5-years of study before sitting for this exam.

I passed only the SEE (Special Enrollment Exam), and I compared to Riley, I feel like a bug!!!! LOL... Anyway, I was preparing to go for my CPA when an instructor, an Enrolled Agent, asked me what I really wanted to do. So, like a lot of us, I said, "I want to do taxes!" She recommended the SEE. So, I quit my well paying job last July and stayed at home to study for the SEE; Every day, eight hours a day, for 3 months. I took the exam in September, 2005, and passed, and am currently in the application process (Form 23).

Being 41, I Will say that CPA's know a lot about case study and law review. I'm a newbie, and I am now seriously considering working for a CPA firm simply for the extended experience.

Taxes are only one part of being a CPA, and this is reflected in their training and on the exam. I personally don't want to do trail balances and audits, I want to do taxes. I am looking forward to the time when my experience will allow me to represent taxpayers before the IRS.

Forgive my typoooos....trail balances....the Santa Fe Trail Balances......

Please give yourself plenty of time to study for the SEE; even if you have lot of tax experience, unlike me. The Partnership and Corporate tests focus on unique issues that do not always arise in the world of day-to-day taxation. There are specific areas of study that the IRS "tweaks" out on. Riley is the exception to most of us. What he, or she thinks, is particular to him. The SE is tough. With a 30% pass rate, I was really worried that I would succeed. In fact the person that wrote the exam books was surprised that I passed; which is not saying much for his books.... but, I did study a lot. You will not learn taxes from the SEE. What you will learn are some basic foundations that link most taxable entities together.

Now, forgive my ignorance. I've not heard of the SEE. How does that compare to EA? Congrats on passing!

Chris2Lane, I would have to say that the CPA exam is considerably more difficult than the CFP exam; however, I would say that if you have an undergraduate degree in accounting with at least a B average, I wouldn’t think you would have any problem with the CPA exam.

Skyhatt, since I know nothing about your background, it would be impossible for me to say whether the EA exam will be challenging or easy for you. I do know that Gleim has a battery of assessment tests that you can use to design your own EA study program (using Gleim’s assistance and materials). Some of my employees were able to cut their study time down to a few hours after isolating their weak areas. In addition, if you decide to sit for the CPA exam, Gleim’s CPA review program and outlines are outstanding. My wife used some of Gleim’s business law outlines to study for the California bar exam.

I did pass the SEE exam and each year thereafter have taken the required CPE credits to maintain my EA status with the IRS. In my opinion, having the EA initials after my name really doesn't have any affect on my earning power with my clients. What does is my reputation, as it really should be with any professional preparer.

However, studying for and taking the EA exam did open up my eyes to the many different aspects of the whole taxation process. Oftentimes I become overwhelmed at everything. Its almost like the more I research and study the IRC code, the less I know--kind of like digging deeply into the Bible.

This year I am really grateful to have come across this forum. I have already gleaned tons of useful information and I wish to thank everyone for their contributions. Let's face it. None of us know the answers to every situation every time. But it is really nice to be able to exchange opinions and share what we know with each other.

A great day to everyone!!

My sister, who is also a CPA, decided to do sit for the exam without an accounting degree, and she did just fine, although she had to buy a full-blown review course. One of the secretaries in my firm also sat for the exam with just a high school education and she passed alll 4 parts on the first sitting (although the firm paid for a Becker course).

I live in California, and individuals who meet certain requirements may sit for both the California bar exam and the CPA exam without a college background (although a law degree is required for the bar). The CPA exam is uniform throughout the United States (at least it used to be). California has introduced legislation to create its own version of the exam due to legislative concern that the existing exam was not a good indicator of professional competence.

I do not recommend sitting for the CPA exam with only a high school education. This is more torture than anyone should have to endure.

I WAS LOOKING IN A MANUAL AND , I AGREE WITH RILEY2 , CPA EXAM IS HARDER THAN OTHERS.

If any of you need to know the education requirements for your state they are published by the national assosiation of State Boards of Accountancy, and your local State Board of Accoutancy: http://www.nasba.org/nasbaweb.nsf/exam

Talking with other people, there's usually one section of the CPA exam that gets people (often financial accounting). After repeated test taking, some people form a mental block I guess. Interestingly, I found studying for the bar exam required more time and effort than the CPA exam, but the the bar passing rate in my particular class was around 90-something percent.

A CPA that passed the exam under CA requirements would have a lot of work to do to become certified in the state of Michigan (via reciprocity). Michigan, as well as most states, has adopted the 150-hour requirement as suggested by the AICPA.

PATHWAY 0 – SECTION 5083

􀂃 Alternative 1. Baccalaureate or higher degree. The applicant must have completed a minimum of 45 semester units in accounting/auditing and business-related courses, of which at least 10 semester units must be in accounting/auditing.

􀂃 Alternative 2. The equivalent to Alternative 1, obtained outside the United States. An evaluation by a Board-approved evaluation service must be obtained and include a course-by-course breakdown. Official evaluations must be mailed to the Board directly from the Boardapproved credential evaluation service. See Page 23 for a complete list of Board-Approved Foreign Credentials Evaluation Services. The applicant must have completed a minimum of 45 semester units in accounting/auditing and business-related courses, of which at least 10 semester units must be in accounting/auditing courses. If the required accounting/auditing and business-related units were not completed within the foreign education, the applicant must have completed the remaining required units at a U.S. degree-granting college, university or other institution of learning as indicated under Pathway 0 Recognized Schools above. 21

􀂃 Alternative 3. 120 semester units of study with no degree. The applicant must have completed a minimum of 45 semester units in accounting/auditing and business-related courses, of which at least 10 semester units must be in accounting/auditing courses.

􀂃 Alternative 4. Successful completion of any two general College Level Examination Program (CLEP) examinations and 10 semester units of accounting subjects from a university, college, or other institution of learning accredited by a regional or national accrediting agency.

Pathway 0 Experience Requirements Depending upon an applicant’s education, P0 requires a 24, 36, or 48-month experience requirement that must include attest experience. Although no minimum number of hours has been prescribed for licensure, it may be difficult for an applicant to obtain Section 11.5 experience of a sufficient character and variety in less than 500 hours.

􀂃 Section 5083 of the California Accountancy Act requires a 36-month experience requirement if an applicant meets Alternatives 1 or 2 as described under P0 Educational Requirements.

􀂃 Section 5084 of the California Accountancy Act allows qualifying applicants under Alternatives 1 or 2 to reduce the experience requirement to 24 months, if the applicant has graduated from a regionally or nationally accredited educational institution and has completed a minimum of 20 semester units, or the equivalent, in accounting/auditing courses.

􀂃 Section 5083 of the California Accountancy Act requires a 48-month experience requirement if an applicant meets Alternatives 3, 4, or 5 as described under P0 Educational Requirements. All experience must be performed in accordance with applicable professional standards. Experience obtained through employment in public accounting will be considered to have met the general experience requirement only if it was performed under the supervision of an individual holding a valid active license or comparable authority to practice public accounting in any state or country. 22 Experience obtained through nonpublic accounting will be considered to have met the general experience requirement only if it was performed under the supervision of an individual holding a valid active license to practice public accounting in the United States. Applicants must meet the requirements for “active” status when they are approved for initial licensure. Therefore, it is required that the applicant have current knowledge of the practice of public accounting. This knowledge is demonstrated for initial licensure by completion of the current exam and/or license experience within the past five years.

See http://www.dca.ca.gov/cba/forms/applbook.pdf

Chris2lane was asking for that information because he is planning to take the test.

Look I passed the EA exam and I later passed the CPA exam and I took the EA exam because of one thing it was supposed to be easier, I did not realize how much easier until I studied for the CPA exam. The reason I hit the books and decided to go after the CPA license is because the EA designation never did anything for me either trying to get a job or eventually trying to get a client. The CPA exam today is a bit easier than it was back in my day of no calculators, three day tests and essay + long problems. I suggest if you plan on marketing yourself and have the time and dedication shoot for the CPA designation.

I am not suggesting that there are not a great deal of smart and successful business consultants with other designations EA, SEE, CFP etc. nor am I trying suggesting that a CPA knows more small business or individual tax. I am just trying to tell you that if you want respect in this business get the CPA title. Also, as some others have alluded to thats just the first step (a big one of course) but you need to get licensed in your state which requires different things in different states but if you are not licensed you cannot use the term CPA. Peace out!

15 years ago I took the CPA test. Took it once. Never again. Did not pass. Focused instead on my area of expertise at the time which was Internal Audits for a large retail store chain. At one time, I was supervising 10 newly licensed CPA's which collectively could not conduct a store audit or properly reconcile a bank account, much less document the work they did. I had one CPA who actually ERASED her near complete workpapers, conclusions, etc. to re-write them neater. Her lines were crooked and it didn't look nice! I also had one hotshot CPA who called store security on the 70 year old clerk when he was counting petty cash and the register til fund because they were out of balance by a whopping $3.12

So CPA, EA, BTF(Bumbling Tax Fool) designations themselves don't mean much. Its what you make of the designation by your own actions.

Of course the CPA industry does effectively market itself with the illusion that you are a mere clown if you are not certified.

I strongly urge anyone who can get the CPA credential to go for it.

I can't tell you how many times I have heard the type of interaction that goes: "Hi, I'm an accountant (or tax expert)", to which the reply is "Oh, are you a CPA?". It's really great to be able to say yes, vs no but but ....

Of course there are many CPA's who are incompetent and just plain dishonest - just read the lists of license revocations, and many non-CPA tax experts who are absolutely brilliant, so the issue is somewhat of a marketing one. Nevertheless, this is your lifelong career, and you'll never regret investing in the credential.

Many times over the course of your career your clients will ask you to call their bankers, stockbrokers etc and I'm convinced you have instant credibility when you introduce yourself as Joe's CPA, vs Joe's EA or Joe's accountant. Plus, I believe that letters you send out under your CPA letterhead have more force than not.

Good luck!

As far as the CPA exam goes, I took it in 1996 and passed with flying colors. I took the Becker's review course and followed all of their suggestions. I studied more than 100 hours. I am currently considering taking the CFE (Certified Fraud Examiner) exam. Forensic accounting is very interesting to me -- those fraudsters are SO creative!

I have often pondered taking the CPA exam as well as going after my MBA. I've reached a pretty good level professionally without the two. In fact, I would never hire an MBA right out of college. This only goes for the MBA. It does not apply to those with a Masters in Taxation or a Masters of Fine Arts. Why? Because every single MBA that I've interviewed were arrogant and condascending. And the one that I did hire was so incompetent that he was eventually let go. I got impressed by the initials that time. Never again. Now an MBA with many years of experience, that's different. I'd consider those.

As for CPAs, there are competent ones and not so competent ones. Having dealt with audit teams for many years, I've met a few who didn't even have the concept of debits and credits down. Hmmm. Accounting 101??

Ric

15 CPAs, 2 MST, 3 unerolled preparer did the return by hand before I would interview them. 1 got the answer correct. It took him twice as long as the others, but he's the one I hired that year. He was a retired CPA.

Moral of the story:

Credentials alone don't mean competence.

I would hire an EA over a CPA if they both got the correct answer. Why? representation in multiple states. A CPA really is only licensed in the particular state for which they hold a license. The EA license is nationwide.

Some people say that the EA exam is easier. That can be true because the candidates have a lot of experience doing tax. They have always done some research to resolve some difficulties. CPA do not use 20% of their knowlegde. EA use 90%. They can answered 9 questions out of 10 concerning tax. CPA cannot unless he or she is specialised in Taxation.

John Huddleston Seattle Bellevue Tax Accountant

Joe Doe, AA, BS, MBA, PhD, CPA - all that dont make much sense.

It always better to be a CPA than an EA. Them EAs is hardworkin and smart folks but they just aint ever been thru what it takes to git that cert. Them perfessors live to weed out the unfit and you jest hope they dont draw on a bead on YOU. That exam just suck the joy of livin outta you. When you done and you pass you know for the rest of your days that nothin can be that tough. When you done you know you done something big. You a changed person and better for it.

Personally, these tests are passages in life, and while I love my EA designation, the one I look back at with the most pride is twice qualifying as an expert rifleman with a M-14, the second time with only 15 minutes allowed to zero an unfamiliar rifle and hitting 74 of 84 targets.....wait a minute, I am even more proud of the trophy from Company D-1-1, Basic Training Ft Jackson SC for being best all-around trainee. It has a place of pride in my office.

As a side note, I never saw a fibreglass stock M-14 without a crack near the gas release port, so if D&T qualified using one of those his score is even more impressive. The wood stocks had to have linseed oil wipedowns, but they didn't crack.

By the way, D&T, I like the alphabetical order idea. We need to add CFE between BS and CFP. I'll be taking that exam next fall.

John Huddleston Seattle Bellevue Tax Accountant

(1) Because it's harder to pass, the CPA exam requires a great level of aptitude and perseverence. These two qualities are key to a client who is considering having an individual handling their financial situations. A prospective client would be foolish to believe ANY kind of tax specialist knows EVERYTHING about tax without having to do research. If they are wise, they should look for someone who has the aptitude and perseverence to research and consider all of the facts in arriving at the answer. Experience is good too, but also doesn't necessarily mean anything. I have worked for organizations of all different sizes (ranging from 12 --> 17,000+ employees) where the older folk have many years of working (or just showing up to work) in their field, yet don't keep up with the changing times and/or can't handle the mental challenges of today's issues. The best example of this is the impact of Information Technology.

(2) Dentists are required to take much of the same university training that other doctors must take. They have to learn all about the body...not just the teeth. Such is the same with CPAs and taxes. Would you believe a "teeth specialist" (if such a thing existed) would be more capable than a D.D.S.? No, you wouldn't...especially if it took a LOT less schooling and preparation to become one over a D.D.S.

It just says something about the aptitude and perseverence of the professional if they are willing to go through all of that schooling...sitting through many "weed-out" classes, writing long research papers, taking rigorous exams, and then enduring countless hours of studying to become certified. Consider along with that the fact that tax issues often overlap with other areas (e.g. financial statements) that the CPA firm is already providing and can therefore offer the best advice.

In the end, EXPERIENCE is the best SCHOOL for any professional, whether credentialed as a CPA or EA. And, while the uninformed public may be willing to fork over more for a CPA than for an EA before knowing either professional, in time either professional will prove their worth through competence and diligence...or not.

Even if you have an EA or a CPA, if you want to get a job in America, you need to speak English and/or Spanish fluently. If you're too lazy to speak correctly, I don't think I'd hire you to be on my staff for any position. It's like pointing at a number with dirty fingernails. Dirty nails = dirty numbers. Good luck.

I am a CPA from NY with 4 years experience in Real estate and little tax. I just moved my family to Florida and started working for a midsize firm in Ft Lauderdale. however, due to the bad ecocnomy, no firms here work on RE audits. I'm freaking out because thats my specialty and I feel like i need to start over here. I'm considering getting my EA cerdentials to give me more tax knowledge and hopefully start my own side pratcice? what do you think?

I personally wouldn't hire a person with either credidential but no practical work experience.

Do you know what they call the person who only scores 70% on his medical school final exam?

"Doctor."

Contact the Fla Board of Accountancy.

Anyway, I decided to sneak across the border into Mexico, and see if I can find work down there.

I passed the first time after 2 years with a tax lawyer; prior to that I'd spent twelve years with a tiny PA doing write-ups, worksheets and some 1040s/1120s etc but certainly nothing heavy in way of experience.

I want to see people with knowledge, not letters after their name.

Jane in CT

Jane in CT

Let me ask you, can you represent clients in front of the IRS in CT, if you are a NY CPA?