Pathway from Indian CA to US CPA: In-Depth Guide

The Certified Public Accountant (CPA) license is the gold-standard in the accounting profession, particularly in the US. However, many international candidates wonder how the Indian Chartered Accountant (CA) license, overseen by the Institute of Chartered Accountants of India (ICAI) compares. Is the CA easier or harder to obtain than the CPA? Can someone with an Indian CA license work as an accountant in the USA? Is there a pathway from the CA license to a CPA?

First of all, both certifications are prestigious and carry a high degree of authority and credibility in the accounting profession. While the CPA license is universally recognized, the Indian CA license is also well respected in India and the certification requirements are more tailored to Indian firms and local accounting standards. 

If you plan to work in the USA or with US-based companies, then a CPA license will be the most marketable of the two licenses. However, there are many great reasons to consider obtaining the Indian CA license to jump start your career. 

If you work in India or abroad and are looking to expand your professional credentials, it helps to know the difference between each certification and decide which license is more appropriate for your career path.   

Key Differences: CPA vs Indian CA

Here are the main differences between CPA and Indian CA:

• The CPA license process and the exam is overseen by the American Institute of Certified Public Accountants (AICPA). The CA license process and exam is overseen by the respective accounting boards in each country where the CA license is recognized, including India, Australia, and the UK. In India, The Institute of Chartered Accountants of India (ICAI) oversees the ICAI exam.  
• While the CPA and CA licenses are both recognized globally, the Indian CA credential is most beneficial for individuals living and working in India. This is because the licensure requirements and body of knowledge required to become an Indian CA may differ from the license requirements in other countries. Companies tend to favor the credentials issued by the country in which they operate. 
• The CPA exam tests a candidate’s knowledge of U.S. General Accepted Accounting Principles (US GAAP) and International Financial Reporting Standards (IFRS) while CA follows Indian Accounting Standards (IAS) and IFRS. 
• The CPA exam consists of four parts – FAR (Financial Accounting and Reporting), AUD (Auditing and Attestation), BEC (Business Environment and Concepts), and REG (Regulation). The CA exams have three levels to pass – the Common Proficiency Test (CPT), the Integrated Professional Competence Test (CPT), and the final exam.
• An aspiring CPA takes about 12 to 18 months to complete the exam and earn their license. For an aspiring CA, the process can often take 3 ro more years to complete.
• For the CPA license, most candidates must also complete 1-2 years of work experience before earning their credential. For a CA license, it’s typically necessary to complete three years of internship in a firm of Chartered Accountants after passing the main exam. 
• After passing the CPA exam, most candidates also need to complete an Ethics exam prior to obtaining the CPA license and complete 120 hours of continuing professional education (CPE) every 3 years to maintain their license. In India, an ethics exam is not required for initial licensure, but CA license holders must complete 40 hours of CPE each year to maintain their license. 

Is a CPA Worth Pursuing After the CA?

If you plan to work in the US or with US-listed companies, then pursuing the CPA license will definitely be worth it. Here are 5 reasons why:

• Improved Marketability: The CA qualification opens a lot of doors for you, but adding CPA after the CA, you can go further in the finance and accounting profession. You’ll simply be more attractive to multi-national and US-based companies in India and beyond, as CPAs are required to be well versed in both IFRS and US GAAP. 
• Global (and Niche) Opportunities: Once you pass the CPA exam and get a license, you can work or set up practice anywhere in the world. Getting your CPA license after the CA will enable you to work in more markets across the world and demonstrate your commitment to furthering your career. Further, having both certifications makes you particularly attractive to US-based companies with operations in India and that require mastery of both US GAAP and IAS. 
• Upward mobility: With a CPA license you’ll have the authority to sign certain documents, tax returns, audit reports, and more, while working in the US. Only having an Indian CA in the USA won’t give you the same authority, and will limit your ability to rise through the ranks into upper management / partnership. 
• Faster Completion of CPA After CA: With the right studying and practice, the CPA exams can be completed in 12 to 18 months. By completing the CA course before the CPA, you’ll likely have an easier time preparing for the CPA exam since you’ll already have gone through a similar process with the ICAI exam. The jump from CA to CPA will be much easier than earning your license for the first time.  
• Higher pay: Let’s face it: Money matters, a lot. Making the leap from CA to CPA will increase your future earnings since it will make you eligible for management and other leadership roles that might not be available with a CA license. There are no official studies on the increased pay one receives going from a CA to a CPA, but having a CPA license alone is estimated to equal up to $1 million in future potential. Your dual CA and CPA licenses may lead to even higher earnings if you can land a niche role that requires expertise from both credentials.

As you can see, adding your CPA after the CA is a no-brainer.                      

How an Indian CA Can Pursue a CPA

Unfortunately, there are no shortcuts an Indian CA can take to pass the CPA exam. The process is the same as if you were taking the exam for the first time. However, the knowledge and foundation required for the CA will make passing the CPA exam much easier. 

To pass the CPA exam, an Indian CA in the USA must first decide which U.S. state or jurisdiction they would like to obtain their CPA license in, and pursue membership through that state’s board of accountancy. 

The general requirements for CPA licensure are relatively consistent throughout the USA, but each state sets its own specific set of specific education and work experience requirements that must be met to become a CPA in that state. The requirements and guidelines for international students may differ as well. Therefore, an Indian CA or other international students should consider which U.S. state or jurisdiction they intend to live and/or work in, and satisfy the CPA requirements for that state. 

How an Indian CA Can Prepare for the US CPA Exam

For Indian CAs currently working in or planning to work in the US, you’ll need to address the following:

Verify Your CPA Exam Eligibility

The CPA exam is administered by the AICPA. The CPA licenses, on the other hand, are awarded by the different state boards of accountancy in the United States, who are members of NASBA. Each state board has their own set of eligibility requirements. 

The general exam eligibility criteria for any prospective CPA, including an Indian CA in the USA, are as follows.

• A bachelor’s degree (or higher) from an accredited university, preferably in the fields of accounting, finance, or commerce.
• Complete at least 120 semester hours of education to sit for the exam with another 30 to acquire the CPA license. However, some states still require 150 hours to sit for the exam and for initial licensure.
• Satisfactory completion of a 24-30 hours of specified accounting courses and another 16-30 business-related courses. Exact requirements vary state-to-state.
• Generally, speaking One year of university education in India is counted as 30 credit hours in the USA
• In some rare instances, first-year graduates of NAAC-A-certified Indian universities are eligible to appear for the CPA exam in the USA.

Understand the CPA Exam Structure

To pass the CPA exam, a candidate must score a minimum of 75 and above. This is a weighted score and not a raw score or percentile, an aspect that often confuses examinees.

The CPA exam structure includes several types of questions:

• Multiple-choice questions (MCQs): MCQs use a multi-stage testing approach that adjusts to a candidate’s performance as they progress through the exam. The higher your performance on one testlet, the greater the difficulty level of the next testlet, and so on. More difficult MCQs carry higher weighting, while easier MCQs carry a lower weight. Hence, solving a few very difficult MCQ will get you more credit than answering several easy ones. 
• Task-based simulations: These questions challenge your capabilities in handling certain situations and concepts. This section is typically matching or fill-in-the-blank questions, and try to simulate real-world scenarios through the use of spreadsheets and other formats. 
• Written communication: This part is a test that assesses your ability to communicate through creative writing and exercises such as presentations. This type comprises a major part of the BEC section of the CPA exam. The answer is entered in a blank Word document during the online CPA exam. 

Use a CPA Review Course to Prepare for the Exam

The Indian CA may serve as a great foundation for the CPA exam, but there are likely to be several new and complex subjects you’ll need to master for the first time, such as US GAAP and financial reporting rules, US auditing standards, and most of the topics covered by the REG exam.

To properly prepare, you’ll need a CPA review course that’s aligned with the exact CPA exam blueprints and can adapt to your personal strengths and weaknesses.

Pass the Exam, and Get Your License!

After meeting the eligibility criteria and successfully passing the CPA exam, you’ll finally be ready to become a CPA in the US!

Is the Indian CA Valid in the USA?

A CA from India can work in the USA. However, the CA license generally won’t be recognized as a valid accounting certification in the US. 

The USA does have CPA and chartered accountant reciprocity with several countries. Presently, NASBA and the AICPA have arrived at Mutual Recognition Agreements (MRAs) with the professional accounting bodies of South Africa, Australia, New Zealand, Canada, Hong Kong, Mexico, Ireland, and Scotland. The MRAs allow qualified professional accountants from these countries to avoid a complete re-credential process to practice and work in the USA. 

Unfortunately, no such mutual agreement currently exists between the USA and India. Therefore, Indian CAs planning to work in the United States will need to pass the CPA exam and fulfill all of the normal CPA licensure requirements to earn a CPA license.

Yes, this amounts to a considerable amount of extra studying and exam prep, but it’ll be worth the effort. 

Why an Indian CA Should Obtain the CPA License

There’s actually a rising trend among CAs to go through this grind. Thanks to the rise of multinational companies with offshore operations in India, financial reporting needs have created a growing demand for skilled accountants that understand the nuances of Indian accounting standards along with US GAAP and/or IFRS. 

As an added bonus, CPAs in India are well positioned to take on management and other leadership roles in back office service centers and offshore accounting firms that specialize in US GAAP and US tax reporting services.   

Historically, companies simply relied on Indian CAs for accounting services and provided in-house training on select US GAAP and IFRS topics for compliance purposes. Now, rising demands for accredited professional expertise and knowledge of multiple accounting standards have savvy Indian CAs increasingly opting for the US CPA licensure. 

Similarly, Indian-based companies publicly listed in the USA require accountants with the CPA credential for tax reporting and to accurately prepare quarterly and annual financials. These companies also depend on CPAs for compliance reporting and controls assessments, such as those required by the Sarbanes-Oxley Act.                 

Summing It All Up

Credentials alone won’t guarantee a job, but when it comes to the accounting profession, having a CPA license is sure to get your foot in the door. An Indian CA license will surely be favored and recognized throughout India and certain neighboring countries. However, to maximize your career opportunities around the world and long-term earning potential, making the jump from CA to CPA will be well worth it.

Getting your CPA license after the CA is particularly worthwhile if you intend to work in an Indian multinational or an Indian subsidiary of a US company where different accounting standards are required.