Get to Work! Tips to Fulfill the CPA Experience Requirement
CPA candidates spend an enormous amount of time and energy focused on obtaining their education credits and passing the CPA exam. In addition to these two requirements, candidates must also obtain work experience before a license will be granted in New Jersey.
How Much Experience is Needed?
According to New Jersey State Board of Accountancy regulations, a CPA applicant must have one year of “intensive and diversified” experience in the practice of public accounting or its equivalent. Experience must be obtained after completion of a bachelor’s degree. This means that internships held during college do not count if the experience was obtained prior to graduation.
At least 1,750 hours of experience must be obtained in full-time employment during one year. Part-time employment is permitted if a total of 1,750 hours is obtained within two consecutive years. An applicant cannot obtain a license sooner if they work more than 1,750 hours in a year.
Who Must Supervise the Candidate?
Experience must be obtained under the direction of a CPA licensed to practice in New Jersey, or an individual entitled to practice as a CPA in New Jersey as provided in N.J.A.C. 13:29-4. Note that even if a candidate is performing the specific tasks that qualify as intensive and diversified, the experience does not count if he or she is not supervised by the appropriate person.
Is Public Accounting Experience Required?
The regulations do not specify that experience needs to be obtained at a public accounting firm. There are activities which are performed in private industry and the government sector which qualify. It is the type of activities performed, rather than the industry, that is important.
What is “Intensive and Diversified?”
In order to qualify as intensive and diversified, at least 25 percent of a candidate’s time must be spent in auditing and accounting tasks. The types of tasks performed will vary based on the industry of the candidate’s employment.
Public Accounting Experience
Auditing and accounting tasks include but are not limited to: review and testing of internal controls; verification and testing of specific accounts such as cash, accounts receivable, inventory and fixed assets; search for unrecorded liabilities; testing of revenue and purchases cut-off; review of subsequent events; and compilation, review and drafting of financial statements.
- Tax service tasks include: preparation of tax returns; review of financial statement tax provisions and tax accruals; research in tax law; and tax planning for clients.
- Other services include: bookkeeping services such as maintaining the books of original entry; and posting to the general ledger.
Private Industry Experience
- Auditing and accounting tasks similar to those performed as a public accountant may be performed as part of the internal audit department. Other auditing and accounting tasks include: preparation of financial plans, budgets and projections in accordance with GAAP; preparation of trial balances, adjusting journal entries and analyses of accounts; and taking physical inventories.
- Other services include: maintaining books of original entry; preparation of payroll tax returns; and preparation of income tax returns.
- General accounting tasks include: preparation of trial balances; analyses of accounts; and preparation of financial statements.
- Tasks performed at a government auditor’s office or internal audit unit include: preparation of audit workpapers; experience in developing audit programs and procedures; and performance of duties as a field auditor for federal and state tax returns.
How is the Experience Documented?
The application for a CPA license includes a statement of experience, which must be completed by the candidate’s employer. The applicant must obtain a statement of experience for all employment held after obtaining his or her bachelor’s degree. The statement must include the dates of employment and a checklist of the tasks performed. The employer must also include the approximate percentage of time spent in each task.
In order to fulfill the experience requirement to obtain a CPA license in New Jersey, a candidate must have intensive and diversified experience under the supervision of a CPA for at least one year or equivalent. Obtaining experience should be the most enjoyable aspect of fulfilling the CPA requirements, as it allows the candidate to put into practice the concepts learned throughout his or her education.
Michelle Robb, CPA, is a manager with Klatzkin & Company LLP, a New Jersey-based accounting and advisory firm. She is a member of the NJCPA State Taxation Interest Group.
This article appeared in the September/October 2018 issue of New Jersey CPA magazine. Read the full issue.