Accounting License: Types, Requirements, and Career Benefits
An accounting license is a professional certification that qualifies accountants to perform specialized financial services, such as auditing, tax preparation, and financial reporting. Obtaining an accounting license enhances career prospects, increases earning potential, and provides credibility in the finance industry.
What Is an Accounting License?
An accounting license is an official certification that grants professionals the authority to practice accounting, auditing, or tax-related services under legal and professional standards. While some accounting roles do not require a license, many advanced positions—such as Certified Public Accountant (CPA) or Certified Management Accountant (CMA)—require formal licensing.
Why Get an Accounting License?
Obtaining an accounting license offers multiple advantages:
- Higher Earning Potential – Licensed accountants earn significantly more than non-licensed professionals.
- Increased Job Opportunities – Many senior accounting roles require a certification.
- Credibility and Trust – Clients and employers prefer licensed accountants due to their verified expertise.
- Legal Authority – Some accounting services, such as auditing and public accounting, require official licensing.
- Global Career Growth – Many accounting licenses, such as CPA and ACCA, are recognized internationally.
Types of Accounting Licenses
Several professional accounting licenses exist, each catering to different areas of expertise. The most well-known certifications include:
1. Certified Public Accountant (CPA)
Overview: The CPA is the most recognized accounting license in the U.S. It qualifies accountants to offer auditing, tax preparation, and financial advisory services.
Requirements:
- Bachelor’s degree in accounting or related field
- 150 semester credit hours of coursework (varies by state)
- Passing score on the Uniform CPA Exam
- Work experience (usually 1-2 years under a licensed CPA)
- Compliance with state board regulations
Benefits:
- Required for auditors and public accountants
- Higher salary potential ($93,225 per year on average)
- Eligibility to work in government and corporate finance
2. Certified Management Accountant (CMA)
Overview: The CMA certification focuses on financial management and business strategy, making it ideal for corporate accountants and financial analysts.
Requirements:
- Bachelor’s degree (any field)
- Two years of relevant work experience
- Pass the CMA Exam (two parts)
- Membership in the Institute of Management Accountants (IMA)
Benefits:
- Higher earning potential in corporate finance roles
- Specialized in cost management, budgeting, and decision-making
- Preferred for management and executive-level positions
3. Chartered Accountant (CA)
Overview: The CA license is the equivalent of the CPA in many countries, including the UK, Canada, India, and Australia. It focuses on accounting, taxation, and auditing.
Requirements:
- Completion of CA coursework through the national accounting body (e.g., ICAI in India, ICAEW in the UK)
- Pass all CA exams (typically in multiple levels)
- Practical experience under a licensed CA
Benefits:
- Recognized globally for auditing and financial management
- High demand in corporate finance, investment banking, and consulting
4. Chartered Financial Analyst (CFA)
Overview: The CFA focuses on investment analysis and portfolio management, making it ideal for accountants working in investment firms and financial planning.
Requirements:
- Bachelor’s degree
- Pass three levels of CFA exams
- Four years of professional experience in finance or investment
Benefits:
- High salaries for investment analysts and financial advisors
- Globally recognized in banking and asset management
5. Certified Internal Auditor (CIA)
Overview: The CIA is for professionals specializing in internal auditing and risk management. It is issued by the Institute of Internal Auditors (IIA).
Requirements:
- Bachelor’s degree
- Two years of internal auditing experience
- Pass the CIA Exam (three parts)
Benefits:
- Essential for corporate auditors and compliance officers
- In-demand in government, banking, and financial institutions
6. Enrolled Agent (EA)
Overview: The EA license is issued by the IRS and allows accountants to represent clients in tax matters before the government.
Requirements:
- Pass the Special Enrollment Examination (SEE) or
- Work as an IRS employee for five years
Benefits:
- Authority to handle complex tax issues
- Ideal for tax preparers and consultants
How to Obtain an Accounting License
1. Choose the Right License
Select the accounting license that aligns with your career goals, whether in auditing, tax consulting, management, or investment analysis.
2. Meet Educational Requirements
Most licenses require at least a bachelor’s degree in accounting, finance, or business administration.
3. Gain Work Experience
Many certifications require 1-4 years of relevant work experience in accounting, finance, or auditing.
4. Pass the Certification Exam
Each license has a specialized exam, such as the CPA Exam, CMA Exam, or CFA Exam. These exams cover financial reporting, auditing, taxation, and business law.
5. Maintain Continuing Education
Most accounting certifications require ongoing professional development to stay licensed. CPAs, for example, must complete Continuing Professional Education (CPE) credits annually.
Salary Expectations for Licensed Accountants
Salaries for licensed accountants vary based on experience, location, and specialization. Below are average salaries for different accounting licenses:
| License | Average Salary (U.S.) |
|---|---|
| CPA | $93,225 per year |
| CMA | $85,000 – $120,000 per year |
| CA | $80,000 – $150,000 per year |
| CFA | $120,000 – $250,000 per year |
| CIA | $75,000 – $100,000 per year |
| EA | $60,000 – $90,000 per year |
Benefits of Having an Accounting License
- Higher Salaries – Licensed professionals earn significantly more than non-certified accountants.
- Better Job Security – Employers prefer licensed accountants due to their verified expertise.
- More Career Opportunities – Allows specialization in audit, tax, investment, and corporate finance.
- Legal Authority – Required for public accounting, tax representation, and financial audits.
- Global Recognition – Certifications like CPA, ACCA, and CFA are respected worldwide.
Final Thoughts
An accounting license is a valuable credential that enhances career prospects, increases earning potential, and provides professional credibility. Whether you want to become a CPA, CMA, CA, CFA, or EA, obtaining the right license can help you advance in the accounting and finance industry. Choosing the best certification depends on your career goals, whether in auditing, tax consulting, corporate finance, or investment analysis.
