Best State for CPA License: Industry & Non-Public Accounting

Summary

In this video, Eric thanks Jeff for his Ninja MCQ questions that helped him pass the CPA exams. Now, Eric seeks advice on whether the state he applies for his CPA license matters if he plans to work in industry, not at a CPA firm. Jeff explains the pros and cons of getting licensed, particularly focusing on the relevance and benefits of holding a CPA license when working in industry. He advises Eric to consider the state's requirements and reciprocity and to contact the state board for accurate information. Jeff emphasizes that maintaining a CPA license involves continuous education and costs, which may not be worthwhile if it's only for industry use.

Takeaways

• 📘 Eric expresses gratitude for the Ninja MCQ questions that helped him pass the BEC and FAR sections of the CPA exam.
• 🎓 Having completed the CPA exam, Eric is now considering applying for his CPA license.
• 🏢 Eric is currently working in the industry as a tax accountant and does not plan to work at a CPA firm or sign off on financial statements.
• 🤔 Eric is questioning the importance of the state in which he applies for his CPA license, given his current and future plans.
• 🚫 The transcript suggests that if Eric does not foresee a career in public accounting, there may be little benefit in obtaining a CPA license.
• 💼 The speaker mentions that having a CPA license can act as a career hedge for those who might want to transition to public accounting in the future.
• 📈 The Continuing Professional Education (CPE) requirements for maintaining a CPA license are described as burdensome, boring, and expensive.
• 🔍 Eric is considering applying for a license in a state with less stringent requirements than Texas, such as Arizona or Michigan.
• 📧 The transcript highlights the issue of using the CPA designation in professional emails, which may not be appropriate unless licensed in the state of work.
• 📍 The speaker recommends getting licensed in the state where Eric intends to work or, if planning to move, in the most stringent state for potential reciprocity benefits.
• ☎️ The final advice given is to contact the state board of accountancy to discuss the specifics of licensing and reciprocity.

Q & A

What is Eric's current situation regarding the CPA exam?

Eric has successfully passed his last two CPA exam sessions, BEC and FAR, and is now in the process of applying for his CPA license.

Why is Eric considering applying for a CPA license in a different state?

Eric is considering applying for a CPA license in a different state because he has noticed that the requirements for the license in his current state, Texas, are more stringent than in states like Arizona or Michigan.

What is Jeff's opinion on the necessity of a CPA license for someone working in industry?

Jeff suggests that if Eric does not see a possibility of working in public accounting or signing off on financial statements, there might be no point in getting the license due to the requirements of CPE.

What does Jeff describe the Continuing Professional Education (CPE) as?

Jeff describes CPE as boring, expensive, and something that one might want to avoid if not necessary for their career.

Why might a CPA license be beneficial even for someone not working at a CPA firm?

A CPA license can be a career hedge, allowing one to have an active license in case they decide to transition into public accounting.

What is Jeff's advice on using the CPA designation in internal company communications?

Jeff advises against using the CPA designation in internal company emails if one is not working in accounting, as it may come off as boastful and irrelevant.

What should Eric consider when deciding on which state to get his CPA license?

Eric should consider the state he wants to work in and whether he plans on moving, as well as the stringency of the licensing requirements in different states.

Why does Jeff suggest Eric to get licensed in the most stringent state if he plans on moving?

Jeff suggests this because having a license from a stringent state might make it easier for Eric to meet the requirements of other states through reciprocity.

What is Jeff's recommendation regarding the CPA license and external communications?

Jeff recommends that Eric should not use the CPA designation in external communications, such as emails to clients or vendors, unless he is licensed in the state he is communicating from.

What does Jeff suggest Eric do to get clarity on reciprocity and licensing requirements?

Jeff suggests that Eric should call the state board of accountancy of the state he wants to be licensed in to discuss reciprocity and get detailed information on licensing requirements.

Outlines

00:00

📘 CPA Licensing Considerations for Industry Professionals

Eric, a tax accountant who has passed the CPA exam, inquires about the implications of applying for a CPA license in a state other than where he currently works in Texas. He is concerned about the varying requirements across states, with some being more stringent. The response addresses the importance of being licensed even for those working in industry, suggesting it as a career hedge for potential future moves into public accounting. It also discusses the drawbacks of maintaining a license, such as the need for Continuing Professional Education (CPE), which is described as boring and expensive. The advice given is to get licensed in the state where one intends to work or, if planning to move, in the most stringent state for better reciprocity. The speaker also humorously touches on the impracticality of using the CPA designation in internal communications and the importance of proper state licensing for external communications. The advice concludes with a recommendation to contact the desired state's board for specific reciprocity details.

Keywords

💡Ninja MCQ questions

The term 'Ninja MCQ questions' refers to multiple-choice questions that are likely part of a study guide or resource for the Certified Public Accountant (CPA) exam preparation. In the script, Eric thanks Jeff for these questions, which helped him pass his last two CPA exam sections, BEC and FAR. This shows the importance of effective study materials in exam preparation.

💡CPA exam

The 'CPA exam' is the professional certification exam for aspiring Certified Public Accountants. It is a significant part of the script as it is the reason Eric has been studying and using Jeff's resources. The CPA exam is a prerequisite for obtaining a CPA license, which is a central theme in the video.

💡CPA license

A 'CPA license' is the legal authorization granted to individuals who have passed the CPA exam and met other requirements to practice public accounting. The script discusses the process of applying for a CPA license and the considerations one must take into account, such as state requirements and professional goals.

💡Industry

In the context of the script, 'industry' refers to the private sector where Eric plans to work as opposed to a CPA firm or public accounting. The discussion revolves around whether obtaining a CPA license is necessary for someone working in industry, especially if they do not plan to sign off on financial statements.

💡Tax accountant

A 'tax accountant' is a professional who specializes in tax preparation and planning. Eric identifies as a tax accountant, which influences his question about the necessity of a CPA license since his role does not involve public accounting or signing off on financial statements.

💡State requirements

The 'state requirements' refer to the specific conditions and regulations set by individual states for obtaining a CPA license. In the script, Eric notes that Texas has more stringent requirements compared to Arizona or Michigan, which is a factor in his decision-making process.

💡CPE (Continuing Professional Education)

CPE, or Continuing Professional Education, is the mandatory ongoing education that CPAs must complete to maintain their license. In the script, Jeff describes CPE as 'horrible,' 'boring,' and 'expensive,' highlighting the commitment and effort required beyond passing the CPA exam.

💡Reciprocity

Reciprocity in the context of CPA licensing refers to the ability to obtain a license in one state based on having a license from another state. Jeff suggests that Eric should check into reciprocity if he plans on moving, indicating that the process of transferring a CPA license between states can be complex.

💡Email signature

The script discusses the use of the CPA designation in an email signature, particularly when sending emails to external clients or vendors. Jeff points out the inconsistency of using a CPA designation from a different state than where the client is located, emphasizing the importance of proper licensing.

💡Career hedge

A 'career hedge' is a strategy to keep options open for future career moves. Jeff suggests that maintaining a CPA license could serve as a career hedge for Eric, allowing him to transition into public accounting if desired, despite his current plans to work in industry.

💡Public accounting

Public accounting refers to accounting services provided to the public, typically involving auditing, tax preparation, and financial advisory services. The script contrasts public accounting with working in industry, discussing the different implications for needing a CPA license.

Highlights

Eric thanks Jeff for the Ninja MCQ questions that helped him pass the BEC and FAR sections of the CPA exam.

Eric is now applying for his CPA license after completing the CPA exam.

Eric asks if it matters which state he applies for his CPA license, as he plans to work in industry, not at a CPA firm.

Jeff suggests that being licensed can be a career hedge if one ever wants to move into public accounting.

Jeff warns that CPE (Continuing Professional Education) is boring, expensive, and not relevant to industry work.

Jeff humorously advises against using CPA in internal company emails as it may be seen as boastful.

Jeff mentions that having a CPA license is a way to showcase one's math skills after passing the CPA exam.

Jeff explains the importance of being licensed in the state where one plans to work, especially for external communications.

Jeff advises Eric to consider the reciprocity and requirements of different states when deciding where to get licensed.

Jeff suggests that if Eric plans to move, he should get licensed in the most stringent state possible.

Jeff recommends that Eric call the state board of the state he wants to be licensed in to discuss reciprocity and requirements.

Jeff questions the necessity of being licensed if Eric only wants to use CPA in his work email and not for external communications.

Jeff emphasizes the importance of considering the cost and effort of maintaining a CPA license for industry work.

Jeff provides a humorous analogy of using an ice pick to describe the pain of attending CPE courses.

Jeff highlights the potential awkwardness of using CPA in one's name when emailing clients in a different state than one's license.

Jeff suggests that Eric should weigh the pros and cons of getting a CPA license based on his career goals and current work situation.

Transcripts

(rock music)

- Eric writes in.

Hi Jeff, first I want to thank you

for your Ninja MCQ questions which helped me past,

pass my last two sessions, BEC and Far.

Now that I am done with passing the CPA exam,

I'm in the process of doing the procedures necessary

to apply for my CPA license.

My question is does it matter which state I apply for

for my license if I only plan to work in industry

and not at a CPA firm?

As a tax accountant and not planning

to sign off on financial statements.

The reason why I'm asking this is I'm currently working

in Texas but I noticed some of the requirements

for the license in the state are more stringent

than another state such as Arizona or Michigan.

As a result, I'm considering applying for the license

in another state outside of the state I am working.

Please advise, thank you.

Well, Eric, if you're going to work in industry,

okay.

So why would someone want to be licensed

if they are going to work in industry?

Well for one thing it can be a career hedge

just to keep your license active

in case you want to jump into public accounting,

you already have your license.

If you don't ever, ever, ever see that as a possibility

then there's really no point in getting the license

because number one, CPE is horrible.

It's boring, it's expensive,

you'll want to poke your eyes out with an ice pick.

So there's that.

You don't really want to be the guy in your company

putting comma CPA after their name

when you send intracompany emails.

I guess you could, but it's like hey, look at me,

I work in,

whatever, something that's unrelated

to accounting but I'm putting CPA.

You can do that, no one really cares.

If you want to you can hang your CPA certificate

in your cube or in your office or whatever.

And people will, "oh, that's cool."

You pass the CPA exam, that means you're good at math.

Because you can't send external emails,

so you can't email a vendor with your name comma CPA.

Unless you're licensed in your state or unless,

you're in whatever, you're in Texas,

so Eric, CPA, and you put in parentheses Michigan

but you're emailing a Texas client,

that doesn't really make sense.

So maybe it's not worth getting the license

and keeping the license.

I mean, I don't know.

I would get licensed in the state

that you want to work in.

Or if you plan on moving, I would get licensed

in the most stringent state possible.

So if you plan on moving to Arizona,

then I would,

I would check into reciprocity.

I don't want to make this question drag out.

Number one, why do you want to be licensed?

Because if it's just to put it in your work email,

I wouldn't do that.

It's a lot of money and a lot of boring hours

about stuff you don't care about anymore

and probably isn't relevant to what you do anyway.

Because you can get CP over farm tax returns

but you work for a publicly traded electric utility

and you work in a regulatory environment, guess what,

you don't ever plan on filling out a schedule F ever.

So why do you want to be licensed,

and then some of the reciprocity stuff is a little tricky.

I'm going to punt and I'm going to tell you

to call your state, whatever state

you want to be licensed in,

call them and talk to them about it.

So that way it,

because ultimately they know, but hopefully

I gave you some things to think about.

(rock music)