Discussion:EA vs. CPA exam

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Chris2lane (talk|edits) said:

4 February 2006
I am an ATP and recently became a CFP. I an now considering taking the Enrolled Agent exam or CPA exam. I work in a small 2 man accounting firm. I am leaning towards the EA exam because our bread and butter is taxation. For those of you with both certifications, which exam did you find more difficult and why? Any feedback would be appreciated.

Riley2 (talk|edits) said:

4 February 2006
I have taken both exams. The CPA exam is about 100 times more difficult than the EA exam. If you passed the CFP exam, you should have no difficulty in passing the EA exam (I took the CFP exam as well).

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.

Skhyatt (talk|edits) said:

4 February 2006
I am currently just a "Tax Preparer", but depending on how things go, am thinking of taking the EA exam at some point. How long does the education generally take and how long is the EA exam? I've heard it's a two day exam.

Riley2 (talk|edits) said:

5 February 2006
It depends on your experience. I have seen experienced preparers pass the exam without study. However, I recommend taking an assessment exam to see where you stand. Gleim Publications offers some very good interactive material for this purpose.

Gmikeg (talk|edits) said:

5 February 2006
Hi Skhyatt,

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.

Chris2lane (talk|edits) said:

5 February 2006
Thanks Riley2. Since you passed the CPA, EA, and CFP exams, how would you compare the CPA to the CFP exam? Thanks. I studied for almost 4 months for the CFP and passed first time out (after taking the exam I didn't think I passed). Thanks.

Gmikeg (talk|edits) said:

5 February 2006
Also,

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.

Skhyatt (talk|edits) said:

5 February 2006
Hello Gmikeg,

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

Riley2 (talk|edits) said:

5 February 2006
The SEE (Special Enrollment Exam) is the same as the enrolled agent’s exam.

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.

Gmikeg (talk|edits) said:

5 February 2006
Thanks Riley...

Skhyatt (talk|edits) said:

5 February 2006
I am assuming that the SEE/EA "status" raises your earning power. By how much would you say, compared lets say to a "tax preparer" who has the same amount of experience.

Riley2 (talk|edits) said:

5 February 2006
I am not sure about that. As an unenrolled preparer, you may not represent a taxpayer in any IRS proceeding. I would think that this is a major handicap. I would think the hours you spend studying will be adequately rewarded with a better quality practice.

Skhyatt (talk|edits) said:

5 February 2006
That's what I was trying to say, I think. Two preparers, one is an EA, one is not. I would think that the EA would have the greater earning power.

DR BRISKET (talk|edits) said:

5 February 2006
Nearly 20 years ago I opted to pursue the EA credentials as opposed to a CPA designation. I have operated a small accounting practice over the years where I have worked with numerous small businesses. In addition, I of course prepare tax returns.

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!!

LJACPA (talk|edits) said:

6 February 2006
My two cents worth... I appreciate reading Riley2's comments and feedback, but was shocked with his/her comment, "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." I took the exam in 1986, before it was computerized, before you could take it throughout the year and before you could take one part at a time (NC rules). I took Becker CPA review for 5 months and studied more than I had the entire 4 years it took to get a BS in Accounting and the required 5th year, altogether. I consider myself humbly blessed that I passed the exam the first time (I studied with a girl who was sitting for the 7th time!) because it was extraordinarily difficult. Five years of education, A or B average, will not suffice. Hours and hours, months and months of studying was required by virtually everyone I know who has taken the exam. For what it's worth.

Captcook (talk|edits) said:

6 February 2006
I am glad to hear LJCPA's comment. I have taken/passed two of the four exams, but studied like crazy for both. I have friends who work at big 4 firms, are better students than I, have studied for and taken all four sections and not passed them all. While the test is simpler to focus for (one section at a time), it is by no means something a would-be applicant could/should take for granted. An accounting degree will not prepare you for the CPA exam. It is a great start, but simply a foundation to which the review course materials can stick. Good luck to you who have decided to make the commitment to pass the exam. I believe that in the business world there are only two sets of intials that really carry any weight: CPA and MBA. In my biased opinion, CPA rates higher. Ok, I'll get off my soapbox now.

Riley2 (talk|edits) said:

6 February 2006
I graduated with a B- average and I took the CPA exam in 1976 when it was largely an essay exam, and I did not take a review course (although I bought a set of $60 outlines from Gleim). I was fortunate enough to pass without having to repeat. I agree that the CPA exam was extraordiarily difficult, and I would have preferred to sit for one part at a time, instead of sitting for a 19 1/2 hour marathon. Frankly, I did not encounter anything on the CPA exam that was not covered in my coursework in college. In fact, many of my professors gave CPA exam questions for mid-terms.

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).

Captcook (talk|edits) said:

6 February 2006
Riley2, I don't there are many people in this forum that would disagree with my observation that you could very well be an outlier in that regard. A solid review course will teach you the exam and if you follow it you should pass, that is their sole purpose. Each state is slightly different, but I was under the impression that to qualify to sit for the exam you must have coursework in accounting. Given the payoff, I wouldn't tell someone in a public forum that they should pass the exam without the caveat of a sacrifice of time to absorb the material. If you are seriously considering taking and passing the exam, wouldn't it be prudent to fully prepare yourself for each exam?

Riley2 (talk|edits) said:

6 February 2006
I thought I was prepared for the exam, based on my experience with prior year exam questions.

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.

Martineo (talk|edits) said:

7 February 2006
LAST TIME I CHECKED , IN FLORIDA, YOU HAVE TO HAVE A LOT OF CREDITS IN ACCOUNTING TO QUALIFY FOR THAT EXAM.

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

Olsjl (talk|edits) said:

20 May 2006
Riley2... Um almost every state in the union requires a minimum of 150 hours of education for a CPA licence, and even CA requires a undergraduate degree and 24 semester hours in accounting, just to sit for the exam (you still have to meet 150 hours for the licence). While you might have had the privlage of taking it before that particular requirement, Every one today has to have at least a undergraduate degree. And belive it or not the national pass rate is always below 20% so obviously a undergraduate degree does not mean you should be able to breaze through the exam.

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

Riley2 (talk|edits) said:

21 May 2006
I cannot speak for states other than California. In California, a “pathway 0” candidate without a college degree may currently sit for the CPA exam if he first passes the CLEP test (College Level Exam Program). After passing the CPA exam and satisfying the experience requirement, the “pathway 0” candidate may be licensed without further educational requirements.

Bengoshi (talk|edits) said:

21 May 2006
I took the CPA exam shortly after the computerized format was introduced. There are still four sections (Financial accounting, auditing, "business environment/concepts", and "Regulation/business law"). I was lucky to pass on the first try, but I wonder if the passing rates were skewed upward due to the change in format. I studied all summer using review books from Wiley, and apparently it worked.

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.

{{ForumReplyPost|UserID=Scot1|Date=21 May 2006|Text=Riley is partially correct with regards to CA requirements, see actual requirements below. CA requirements are much more liberal (imagine that!) than the two states I am certified in, Texas and Michigan. I believe Riley is referring to Alt 4 below, which, contrary to Riley, does require at least 10 semester units of accounting subjects from a university...... as well as successful completion of any "two" CLEP exams. In my opinion, CA requirements have the effect of watering down the requirements to sit for the exam.

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


Melissa1234 (talk|edits) said:

2 March 2012
I am taking the EA exam this year and I also plan on taking the CPA next year. To anyone who took both, how similar is the regulation part of CPA exam to the EA exam? Would it make sense to take this part of the CPA right after taking the EA?

Or does each of the four CPA parts have to be taken in a specific order?

Flybynight (talk|edits) said:

5 March 2012
There is no specific order; you can take the parts in whatever order you prefer. Here are a few good discussions to read:

http://www.taxalmanac.org/index.php/Discussion:CPA_exam_prep_courses%3F

http://www.taxalmanac.org/index.php/Discussion:Crossing_the_Rubicon-CPA_exam

http://www.taxalmanac.org/index.php/Discussion:How_long_did_it_take_you_to_study_for_the_EA_or_CPA_exam%3F

I personally did not feel that it was very similar. About half of the questions in reg are related to laws, professional responsibility and ethics. Hence the "regulation" title. The basic tax questions regarding basis and/or 1040 issues were pretty similar, but I didn't find much overlap in the rest. Since you're currently a student, I would recommend that you take whichever part is most recent classwise. For example, if you are taking intermediate accounting this semester, FAR may be the way to go; AUD for audit theory, etc...

BrockEA (talk|edits) said:

6 March 2012
Well, I have first hand knowledge....I took and passed Auditing on 1/18 and am waiting on Wednesday to get here so I can have my scores back on BEC (I think I passed).


If you were to pull a tax question out of the CPA exam and a tax question out of the EA exam, they would be very similar. The difficulty of the questions for the EA exam stand on their own.


However, the difficulty of the CPA exam is the sheer volume. Each section is so widely diverse on the CPA exam that you just never know what you will face. I just studied for BEC and I hammered away for DAYS on the weighted average cost of capital, capital budgeting, cost accounting variances, and all the other very technical questions from Wiley. The exam was shotgun approach and really covered almost everything but these topics.


The volume on the CPA exam is like taking all three sections of the EA exam at once times a factor. It's staggering when I look at the pile of hand written notes, typed notes, books, notecards, etc. that I amassed just on two sections and I still have REG and FAR to go.


BrockEA

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