How to become a CPA (USA) | Varun Jain | Miles CPA

Q1. How do you think today’s announcement is going to impact the CPA scenes in India?

Ans: I think this is great news. This was anyway in the making but now given the COVID-19 situation and challenges on international travel to the AICPA, NASBA, prometric , they have decided to do it right away so candidates in India no longer need to travel to US or Dubai to take the CPA exams, they can take the exams right here. Just to give you a little background here for the CPA exams, they started off in the late 1800s so it’s been over 100+ year journey but CPA and NASBA they started international testing back in 2011 so that is when they started going international and Middle-East locations came in, Japan came in, Brazil followed, Europe followed and it was just a matter of time that India was supposed to be on that roadmap for international testing. So the good thing is we already have thousands of Indian candidates who study with Miles in India and now the good news for all of them is that exams are right here. It not just saves cost as you mentioned, it also adds enough convenience because if CPA exams are held online at Prometric test centres so which means you can choose your own dates and the rule is for the four exams is from the date you clear your first exam you have 18 months to clear the remaining three so that’s a lot of flexibility in terms of when you want to give your exams and how do you want to schedule your exams. Now with the exams in India, candidates can study for one exam at a time, give that exam then study for the next quarter studying for the second exam, then give the second exam and so on and so forth. So that’s what makes it very convenient, majority of our candidates are working professionals and this flexibility and this convenience is invaluable. So I think this is great news, all of us at Miles are super excited, all our candidates and aspirants are very excited. We have been receiving a lot of inquiries from a lot of potential CPA candidates who now want to get enrolled into the program because this is just great news.

Q2. Suppose if I were to decide today that I were to appear for the CPA, can I take it in this June or in September because there’s going to be a lot of registration formalities as well; you need to qualify to appear for this exam. So tell me about that.

Ans: So it does take some time because you have to sort of get transcripts from your university, send that to an evaluation agency in the US who will convert your India marks into US semester credit terms. So there’s an eligibility requirement for CPA which says you need to have at least 120 credits to appear for the CPA exams and then the State Board and they have 55 of them so it sort of gets a little complicated there and maybe we will talk about it. So the evaluation agency send the report to the State board and depending on the qualifications in India you get the US equivalents. So that process does take some time, like a couple of months, but for candidates who get started now, June is a possibility because it can be done in about four to six weeks or let’s say they could also look at September timeline and though the announcement right now is only for the couple of months which is June and September the understanding that we have is this is going to be a permanent affair. Like all international locations India will also become a testing location with continuous testing so though it’s not yet official, we believe strongly that this is coming up sometime towards the latter half of the year.

Q3. When I talk to the general people especially through the CA Job Portal connect, the general thing is that CA perceived difficulties are far more than that of CPA, the reason being that CA is held in three stages so you have got like around 20 odd papers and for CPA it’s just 4 papers; accounting, auditing, regulations, so tell us about the perceived difficulty. What’s your stance on that?

Ans: The way both these qualifications are structured, we understand that CA is the highest public accounting qualification in India so the moment you say anything to anyone in India that you’re a Chartered Accountant, there is a lot of respect whether you look at an employer or anybody in the community. Similarly CPA is the public accounting qualification for the US so now because it’s US it has global credibility including in India, given the prevalence of US and other multi-national corporations. Now let’s look at the way CA is structured. CA is typically a program you start after class 12, so after class 12 you start studying for CA and then you have your foundation for CPT and then intern and your final and it’s about 16 or more exams in the entire marathon. All those levels that you have to clear before you become a chartered accountant. But let’s look at it this way that you can become a chartered accountant even without a university degree, rather the ICAI or The Institute of Chartered Accountants of India tells you that you don’t have to go to college or university. After class 12th just focus on CA and if you clear these 16 exams, you are going to be a chartered accountant and once you do CA, nobody will come and ask you whether you’ve done a university degree because it doesn’t matter. What the ICAI and a lot of bodies across the world have done is they have actually included the entire graduation curriculum as part of the professional qualification so after class 12 it’s a matter of choice whether you go the university round which is graduation or you go the professional qualification round which is like CA in India you can become a Chartered Accountant or a CS or a CWA. Even if you look at UK qualifications, you can become a ACCA or CIMA without the university degree so that’s how the qualifications are structured; start after high school, many exams tend to substitute university education, university education not required. Now when we get to US things are different. Nearly all professional qualifications in the US mandate a university degree and the professional qualification degree sits on top of university degree. So in the US to be a CPA, you have to be a graduate and then we spoke about 120 credits, but you have to be a graduate even before you’re eligible to take your CPA exams. Now let’s talk about the kind of effort it goes on in achieving a graduation today. So if you talk to kids today who are pursuing their college degrees they have six semesters. Let’s assume they have about five exams per semester so we are saying you need to clear up thirty exams across 3 years to own a graduation alone. So the way we look at CPA, it’s like a graduation plus four exams. So in other words, CPA is actually 34 exams where 30 are as part of a university degree, 4 more for the professional qualification. So basically, unlike CA or a ACC or any other qualification, CPA or CMM or CFA all these US qualifications, they complement a university degree, they sit on top of a university degree. Same thing to be a ACMA or a CFA you have to be a graduate, so it’s graduation plus a few exams. So it’s basically complementing your university degree.

Q4. Are these four papers very difficult to clear?

Ans: Let’s look at the industrial requirement, it’s not crazy-crazy amount of content because even if you look at those pursuing CPA, 90% plus candidates are working professionals. So if you look at folks who pursue CA, they are actually full time students. CA put in a lot of effort there, 100% of their time is going on CA, but if you look at CPA, the way it is structured, it is structured for working professionals. It is structured to complement university. So naturally the modus operandi is very very different. So the way the testing is done in the CPA exams, let’s say there is a document review simulation where I look at a people auditing, the question is the people will get a lot of audit working papers. They will start with an engagement letter, confirmations from clients, audit plan, management replica given all those exhibits and questions are based on those. So the questioning pattern is application based and if I were to mention half the exams are MCQs and remaining half assimilations, the entire exam is computer graded. So out of four parts, three of them are fully graded by the computer. So there is no subjectivity or human intervention involved. Only one of the exams, business is 85% computer graded and 15% written communication which is human graded. So the point is the qualification is designed for working professionals. It is designed to be pursued along with a full-time job for the career progression and the focus is on the skill gaps so I would not say it’s easy or it’s a piece of cake, there is content but it is not about memory here, it’s about applying the concepts on to real life scenarios. Let’s say if you have multi choice questions, the answer is there right in front of you, it’s not about whether you remember stuff, it’s about do you have your concepts right to be able to identify the right answer. You will have questions where everything looks right or everything looks wrong and again the conceptual piece and application piece now comes in whether you do move from concepts to contexts. So if we talk about the global pass rates for CPAs, close to 50%. At Miles, our pass rate is an excess of 75%. So it’s a pretty healthy pass rate if you compare to a lot of other qualifications, not because it’s easy but because the focus is on application of concepts and working professionals are able to do a great job on that. One advantage is the fact that if you read the newspapers Cas are doing a lot of protests about the evaluation because there is human intervention there is subjectivity so there are students who feel belittled by the system that they deserve to clear and here since it’s computer-based examination so at least you don’t have that window of an human error coming between you and your dreams so I think that’s a very valid point that computer-based exam at least clears us of that kind of a controversy which we are currently facing in the CA profession.

Q5. Coming to the opportunities because it’s where the ultimately job opportunities are and I understand from our conversation that you also engage in placement of your students so where are the typical opportunities, are they only in off-shore like Deloitte Hyderabad, or the GTP, Grant Thornton or something like that or is it also in like a Indian company like Doctor Reddy or Microsoft, do they also look at your CPAs?

Ans: let’s divide this into two pieces, the placement piece, one let’s talk about the public accounting firms where of course the big four are dominant and the big five has GT and big six also has VDO, for Deloitte, KPMG, PWC so all of these are big recruiters for CPAs and when I talk about their recruitment of course the offshore teams there they only need CPAs right and they took hundreds of CPAs on to their audit teams or their tax teams and financial advisory and other teams now besides that even big four front India teams there are a lot of rules where they actually need CPAs. Just to give you an example let’s say, Tata Motors. Tata Motors is a very much Indian company but however Tata Motors has also gone to the US, raised India from there which means it’s also a US SEC registered. It’s because they’ve raised capital in India they are accountable to study, because Tata Motors has raised capital in the US, it’s accountable to SEC. So Tata Motors financials are of course are filed with the study in India, they are also find with the SEC in the US. So now the auditor for Tata Motors of course now needs CPS because of the SEC filing that gets in. Now let’s talk about the auditors of Tata Motors. So earlier it was Deloitte now it’s KPMG so now India partner who is chartered accountant is the signing authority on the audit that happens for Tata Motors India. But the moment you’re looking for SEC filing, the US team or somebody else’s CPA partner comes in and that is where even the big four India teams when they are looking at multi nationals, there could be 2 kinds of multi nationals, there could be Indian multinationals that are also US SEC registrants that means they are filing with the SEC as well. So Indian multinationals need CPAs, the auditors of this Indian multinationals need CPAs and then if you look at nearly every US multinational or foreign international has a huge base in India, talk about Amazon, Microsoft, American Express, Phillips, so we have all these foreign companies having huge operations in India. Now if you look at even from an entity perspective, the Indian subsidiary needs to follow Indian compliances, Indian rules, Indian accounting, let’s say they need India’s financial reporting. So for example, Amazon has a subsidiary in India which has to do NDAs, or Walmart has a subsidiary in India or Flipkart is also now owned by Walmart so NDAs for Indian operations but then they have to convert those India’s financials into US gap because the parent is following US capital so the world is typically bilingual made US gap and IFRS. When you look at compliances of course Indian regulations subsidiary has to be compliant but all US regulations also apply ultimately to US subsidiary. When you have these subsidiaries in India wanting to recruit candidates for the financial accounting team, whether be it the CFO level or a controller level across the team, especially if it’s senior people there is wrong happening with somebody in the US, it could be a senior finance guide or finance director sitting in the US and the moment you say you are a CPA, there is a huge difference because if you’re a CA that’s a great qualification and Cas have a lot of respect in India but when you’re looking at internationally anybody, maybe investor talking to a client, ACC still is CA equivalent but the moment you say you are a CPA, they connect with you much deeper and the opportunities multiply. So the point is the moment you have a CPA on your resume, your resume stands out.

Q6. If I am a fresher, what would be the kind of salary I will get? For example, I am a CA intern stuck in CA final so I complete CPA. What is the kind of typical salaries that I could draw per annum?

Ans: Assuming you have zero experience, you’re looking at a salary of 6–8 lacs. If you’re experienced, the numbers will increase. It’s basically also what a chartered accountant is paid. The average salary of a CA is around 8 lacs. A CA fresher can draw anything between 3 lacs to 30 lacs and for CPA the variance is going to be relatively less. It actually depends on how do you position yourself. We have also got CPA candidates who got a package of 60 lacs with one year of experience. Multi national countries mainly look for CPA at any cost and they don’t find as many CPAs in India as Cas. The number of Cas is way more than CPAs. CPA resume stands out specially for multi nationals. For Indian companies the preference could be CA but many Indian multinationals sponsor the CPA candidates. What I think is the demand for CPAs far exceeds the supply of CPAs.

Q7. What is the eligibility criteria for CPA considering the Indian education system is not good enough for CPA, you need to have some sort of M. Com so how can one circumvent around that? Does is vary from state to state?

Ans: The eligibility for the qualification or exams or certificate or license of CA in India is done by ICAI. So ICAI institute will decide your eligibility, conduct the exam and give you the certificate after you complete all the exams and other requirements. For CPA it doesn’t happen like that and the reason is that CPA is a professional license in US and so this dates back to when US got their independence. CPA exams were previously conducted by various states but now they are uniform. The CPA exams for all the 55 state boards is conducted by the AICPA (American Institute of CPAs) which is the national body. They conduct the exam called uniform CPA exams which means that you see the exams are uniform irrespective of your state board selection. So let’s say somebody is going through the state board of Washington, can go to Seattle and take the exam because the exams are not conducted by Washington state, it is conducted by the AICPA. So to answer the question, all the 55 state boards have their own eligibility criteria but there is some level of consistency but the specifics are different. To be eligible to take the CPA exams you need to have 120 credits, to be eligible for the CPA license you need to have 150 credits. A lot of Indian graduates B. Com. alone are also eligible for CPA exams. Of course if you’re B. Com. plus M. Com. or B. Com. plus CA, then we’re fully sorted.

Q8. I reckon you facilitate M. Com. from Annamalai University or Amity University also.

Ans: We have a program called the PG Diploma in Public Accounting from Amity University and we sort of powered the program in terms of giving them all the content. A unique facet of the program is this PG Diploma program has the same syllabus as CPA exams, not fully but like 50%-60% similar. So somebody who comes in and needs and extra year can enroll with Miles- start with CPA and enroll with Amity and whatever is studied for the CPA exams are tested on the Amity exams. So they study once and they give CPA exams to get the CPA degree and Amity exams to get the PG Diploma. It sort of takes care of their bridge course requirement and sometimes for exam eligibility and sometimes for license eligibility.

Q9. If I am working in India do I really need that CPA license because they would be costing a lot of money right?

Ans: Firstly it doesn’t cost a lot of money, secondly, yes you need to have a license. You cannot say that you’re a CPA, you cannot use the letter CPA after your name or email, signature or even on your resume unless you have a CPA license. It’s okay if you have the license from any of the 55 state boards but you need at least one license. For license there are a few requirements. You will need to clear your exams, you need to have 150 credits, educational credits like B. Com., PG Diploma, etc. but also need to have an experience criteria. The experience criteria is again where Miles comes for assistance because a lot of the state boards have the criteria that you need to have experience under the supervision of a licensed CPA to get the CPA license. It’s difficult because in India you don’t have a CPA boss, you may have a boss who is a CA or a B. Com. grad but most of the time he’s not a CPA. That is when we send in candidates for state boards which accept experience verified by a licensed CPA. For license, I pay $76 every 2 years for my license which like Rs 5000 every 2 years for CPA license which is pretty reasonable as in the CA institute also we need to pay that kind of a membership fee.

Q10. In terms of cost with the exams now being held in India, either temporarily or a permanent feature, how much does the cost boil down to as I reckon that coaching is an important integrant here as one really cannot do self-study for CPA. Does one get loan considering one belongs to a not-so-good economic background? Can one get 3–4 lac rupees loan which is required in CPA which they can repay once they start their job? Does one need to pay furnished collateral for that?

Ans: Total cost has definitely come down because of exams in India so total cost for a CPA candidate will be 3 lacs of which 1 lac 99 thousand plus some GST would be the Miles training fee portion and about 2 lacs would be the cost of exams plus evaluation in the US.

Why are the components of training helpful? Let’s understand the components of training. One component of course the training and CPA study materials, online test bank, online videos. That component itself is very integral reason being when you see a CPA candidate, most of them are working professionals, most of them have cleared CA, etc. Here they also have to balance the full-time job with the CPA so coaching sort of makes it not just very effective, but also very efficient. For instance, when we have the working professionals, we tell them we only need 20 hours per week and if you give us that, you can be a CPA in the next 8 months. So the training makes it effective and efficient. Now the CPA exams are not about memory unlike our Indian graduation degrees. For example in audit you will be expected to fill in three pages of content. It’s not about how much you remember, it’s about application of those concepts in real life scenarios and that is where training comes in. I have had chartered accountants fail in audit in CPA exams and I also had B. Com. grad score 99. So if you have a complacency that you know it all, that is when some candidates get held back. The point is that you need some intervention to move into a mindset to identify the correct answer. The components of Miles is not just for the exam and training and the study materials, it is also for the assistance. So assistance starts with: Am I eligible for CPA exams? If the answer is yes, which state board? Once we identify the state board, next question is which evaluation agency? What is the process for me to get my transcripts and then send those transcript to evaluation agency, and then it goes to the state board and then of course the CPA exams happen, now you are not travelling to the US or Dubai as the exams are happening in India. After you clear your CPA exams, how do you get your CPA license? How do you get the placements?

So if somebody comes to us just for the assistance part and doesn’t need coaching, which are seventy thousand rupees for that, because the assistance part itself is very valuable so it’s an entire package where the entire assistance piece is there, study material and training piece is there and the placement piece is also there. People who have cleared CPA exams with us, we got them 3–5 interviews and a lot of candidates were working professionals, they have looked at a career progression and stuff like that. For corporate sponsor candidates we don’t do placements but for self-sponsored candidates, which is a majority we absolutely support them for placements. So 3 lacs as of now which includes like 1 lac rupees of proper coaching and mentoring part and 2 lac which is paid as an exam fee, registration fee.

For loans, we already have tie-ups with banks and quick disbursement of loans so it’s basically if the candidate is working, no collaterals based on their salaries or somebody’s parents are working we use those details.