Thursday, August 18, 2016

5 Reasons to Take the CPA Exam Right After College

If you recently graduated from college/university, I want to congratulate you! Well done! Are you starting a new job this fall and would rather do anything but study in your spare time? Do you want to take a short break from studying since that’s what you have been doing for most of your life? Well, despite all that, it may make more sense to take the CPA Exam sooner rather than later.

See, I made the mistake of pushing off serious studying for the CPA Exam during my first year working at a CPA firm. In the early 2000s, there were lots of layoffs in the Finance industry in New York, and this included CPA Firms. It became extremely important to have as many billable hours and not much “unassigned time.” I could not afford to lose this job and spent my free time asking Seniors for work that they needed help with instead of studying. I figured I could “wing it” on some parts and study hard later when things slowed down.

As the years went by and my personal and professional responsibilities increased, it grew more and more difficult to study. I kept trying though – passing parts, failing others. I took breaks from the Exam. This process started to repeat over and over again. If I knew then what I know now, I would have tried to find a balance between work and studying very early on in my career.  

If you sit for the CPA Exam soon after graduating, you may be able to avoid these 5 things that are currently working against me:

1.     Dealing with the Expense of Paying for it Yourself

For most jobs in Accounting, there will be a direct or indirect offset of your CPA Review course expenses. Employers may offer a way to offset the cost of CPA Review courses or give you some bonus or incentive to pass the Exam. They may partner with a review course to offer it for free or at a discount to their employees. Even places that don’t offer this generous benefit may “reimburse” you indirectly in the form of a raise. There is a perception that you can offer the department or organization more now that you’re a CPA.

The lack of any kind of financial assistance is one of the things you will feel most painfully when you shell out the 1,000s of USD to pay for a review course later in your career (in addition to the fees to sit for the Exam). I remember thinking all that money and those days off studying could have gone towards a nice vacation instead.

2.     Lack of Support

When you are a recent graduate and taking the CPA Exam for the first time (or even the 3rd or 5th), everyone wants to help you. We root for you. No one wants to be the reason you failed after studying for so many hours. Parents, roommates, boyfriends, girlfriends – everyone – will usually understand why you need time alone to study. Sympathetic managers (like me) may let you take off with barely any notice the day before the Exam because you panic and need more time to study. Even bosses who are jerks don’t want this Exam distracting you while you work.

When you get older, no one cares as much, I’m sorry to say. You are not a student anymore; you are in the Real World now. Yes, people may find stories about someone they don’t know with 10 kids and 3 jobs passing the CPA Exam an inspiration, but most people will view it as an inconvenience to THEM if it directly affects their life. Partners, family, friends, colleagues and employers may not give you as much support as they might have done when you were a fresh grad. You may also hear “ugh, you’re going to take that test again?” or at least that’s the response I get when I mention it…

3.     The Material Changed

When you take the CPA Exam fresh out of school, you will find that the content of the Exam reflects the material covered in your courses. Changes are implemented regularly to keep up with the Accounting industry and business climate, but you have a grace period before the changes are applied to the Exam. You have time to learn these changes and how they differ from what you memorized in school, and the number of changes should be manageable.

When you are more than a few years out of school and not using those specific accounting rules (like those for Not-For-Profit or Inventory accounting) at work for a few years, you may need to re-learn them. The worst is when there has been a complete overhaul of certain areas. Forget about comparing the test questions to what you did at work years ago (a big one for me was derivatives accounting) since it may have changed substantially.  Some of the basics, such as the conceptual framework, have been revamped and I need to learn everything from the beginning.

4.     Less Time to Study

Yes, there are exceptions, but usually, when you are younger, you have less responsibilities than you will have later in life. You are not managing employees at work yet. You may not have started a family yet. And you may not have bought a house yet. There are more places to fit study time. Again, I say usually because there are some exceptions.

As we get older, we will move up in our careers, maybe share our life with a partner, possibly have or adopt children, take care of an aging or ailing relative or friend, and even volunteer in our communities. With life comes an increase in responsibility. And it will get more difficult and sometimes impossible to say no to requests for your time. You may not want to add something else such as studying for the CPA Exam to your already full plate.

5.     Lack of Motivation

When you are starting out in your Accounting career, you want to do well and passing the CPA Exam will be one of your goals. It may even be a goal on your performance report that you will be reviewed on. So, you have a strong motivating factor to sit for and take the Exam.

But if you have already made it pretty far in your career without it, you will ask yourself “should I even bother taking the CPA Exam?” At this point, the CPA credential may not help you get a promotion, but it could open up more career opportunities. There are many jobs where the employer requires the candidate have a CPA license. Earning your CPA license at this stage will be more of a personal goal and you will have to be completely willing to make sacrifices to achieve it. The hardest part will be getting started. You will also have to be more creative in motivating yourself to study.

While this particular article is geared towards those of you who are currently in the early stages of your Accounting career, I also plan to write about my own experiences sitting for the CPA Exam (again) later in my career. I feel that we can all learn from each other – mistakes to avoid, from those more advanced in their careers; and a fresh perspective on work and studying from the younger accountants. Please share in the comments where you are in the process and what you are doing to get motivated to pass the CPA Exam once and for all. 

1 comment:

  1. Personal Expenses are one of the major reason that people prefer the employment instead of taking the exams