What Is a Chartered Accountant in the USA?

A Chartered Accountant (CA) is a globally recognized professional accounting designation, widely prevalent in countries such as the United Kingdom, Canada, Australia, and India. This designation signifies that an individual has attained a high level of expertise in financial management, auditing, and taxation. While the CA designation holds significant international recognition, it is not the primary or licensed public accounting designation within the United States.

In the United States, the equivalent and primary professional accounting designation is the Certified Public Accountant (CPA). The CPA license is the credential required for individuals who wish to offer public accounting services. This article will clarify the distinct roles of these two designations and explain how foreign Chartered Accountants can navigate the US system to potentially qualify for CPA licensure.

Chartered Accountant and Certified Public Accountant

A Chartered Accountant (CA) is a financial professional qualified to perform various accounting procedures, primarily outside the United States. CAs often provide services in auditing, tax, financial accounting and reporting, management accounting, and applied finance. Professional bodies in their respective countries, such as the Institute of Chartered Accountants in England and Wales or similar institutes, govern CAs, setting standards for education, examination, and ethical conduct.

The Certified Public Accountant (CPA) is the licensed accounting professional in the United States. CPAs are authorized to provide a broad range of accounting services, including financial advisory, tax preparation, and attest functions. The attest function, which includes auditing financial statements, is a service that only licensed CPAs can perform for public companies in the U.S., providing an independent opinion on financial information. The American Institute of Certified Public Accountants (AICPA) develops professional standards, while state boards of accountancy grant CPA licenses and regulate the profession.

Both designations require rigorous educational backgrounds, comprehensive examinations, adherence to strict ethical standards, and ongoing continuing professional education. A key difference lies in their jurisdictional authority; CAs are globally recognized, while the CPA is the specific license required for public accounting practice within the United States. This distinction means that while both professions perform similar functions like financial reporting and tax advice, the CPA holds exclusive rights to certain public accounting services in the U.S., such as auditing.

Path to Becoming a Certified Public Accountant in the USA

Becoming a Certified Public Accountant in the United States involves fulfilling three main requirements, often known as the “Three Es”: Education, Examination, and Experience. These requirements ensure that candidates possess the necessary academic knowledge, pass a standardized assessment, and gain practical work experience before licensure. Each state board of accountancy sets its own specific criteria, leading to variations across jurisdictions.

The education requirement mandates 150 semester hours of college coursework, which is 30 hours beyond a traditional four-year bachelor’s degree. This means completing a master’s degree in accounting or a related field, or pursuing additional undergraduate courses to reach the 150-hour threshold. Within these hours, a specific number of accounting and business courses are required.

The Examination component involves passing the Uniform CPA Examination, a rigorous, computer-based test administered in four sections. These sections cover Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). Candidates apply to their chosen state board to receive a Notice to Schedule (NTS) before taking the exam.

The Experience requirement calls for one to two years of relevant accounting work, usually under the supervision of a licensed CPA. This practical experience, often ranging from 2,000 to 4,000 hours, can include roles in public accounting, corporate finance, or government accounting. The supervising CPA must verify the candidate’s work and endorse their experience to the state board.

Evaluating Foreign Chartered Accountant Credentials in the USA

For a Chartered Accountant (CA) from another country seeking to practice in the United States as a CPA, their foreign credentials must undergo a thorough evaluation. This evaluation assesses the equivalency of their international education and professional qualifications to the US educational and licensure standards. A common service for this is NASBA International Evaluation Services (NIES), which reviews transcripts, coursework, and credentials to determine their U.S. equivalent.

Some foreign accounting bodies have Mutual Recognition Agreements (MRAs) with the AICPA and NASBA, which can streamline the path to CPA licensure. These agreements are established when the qualifications for licensure in a foreign country are deemed equivalent to those required of a U.S. CPA in terms of education, examination, and experience. CAs from countries with MRAs, such as Australia, Canada, Hong Kong, Ireland, Mexico, New Zealand, and South Africa, may be eligible to take a shorter examination, the International Qualification Examination (IQEX), instead of the full Uniform CPA Exam.

For CAs from countries without an MRA, the pathway to CPA licensure requires meeting the standard U.S. education, examination, and experience requirements, similar to domestic candidates. While their existing credentials may grant some credit after evaluation, they generally need to complete any educational deficiencies, pass all four sections of the Uniform CPA Examination, and fulfill the supervised work experience requirements. Final licensure decisions, including the acceptance of foreign credentials and experience, rest with the individual state boards of accountancy. It is advisable to consult the specific board where one intends to practice.