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For the majority of states, having a CPA certificate or a CPA license means the same thing. The terms are only differentiated when talking about credentials within the five remaining two-tiered states. In these states, having a CPA certificate means you've passed the CPA exam and are eligible to work toward fulfilling your supervised experience requirements for your license. For all other states, you won't receive any credentials until you've obtained your full CPA license.
In one-tiered states, the terms CPA certificate and CPA license are used interchangeably. However, in two-tiered states, they are different. Before you can sit for the CPA exams, you must first meet the educational requirements set forth by your state. As soon as you meet these educational requirements, you can sit for the CPA exams. If you live in a two-tiered state, once you pass the CPA exams, you'll receive your CPA certificate. In order to obtain your CPA license, you'd then have to complete the working experience requirements set forth by your state. With a certificate, you're limited in what you can do. Certificate holders are only eligible to work under the supervision of a licensed CPA and cannot advertise themselves as CPA's to the public.
If you live in a two-tiered state and already have your CPA certificate, as soon as you complete your required supervised experience, you'll receive your CPA license. In one-tiered states, you won't receive any certification or license credentials until you complete the entire process. Therefore, if you live in one of these states, you'd complete your education, pass the CPA exams, obtain your required hours of supervised experience, and then you'd receive your license. With a CPA license, you're able to own your own CPA firm, advertise yourself as a CPA and work unsupervised.
Advantages and Disadvantages
In the old days, the two-tiered system was more prevalent. However, state governments saw disadvantages and began changing this system in the late 1990s in an effort to differentiate the two steps. Mainly, this was done to prevent the public from becoming confused and misled because under the old system it was difficult for the public to discern between a CPA certificate and a CPA license. One advantage of the two-tiered systems is that applicants who work in sectors other than accounting are allowed to obtain a CPA credential without having to complete any working experience requirements.
As of 2011, five two-tiered states remain, while the rest have all converted to the one-tiered system. The five states include Alabama, Illinois, Kansas, Montana and Nebraska. However, Illinois has already announced that they will convert to a one-tiered system on July 1, 2012. Illinois is also the only one out of this group that still allows non-residents and international applicants to apply. All the other states have strict residency and social security number requirements. Alabama is the strictest out of this group as they require all applicants to be United States citizens in order to sit for the CPA exam.