If your education and background are in accounting, your options are fairly broad when it comes to the career paths available to you. Determining your future profession depends largely on the specialty that is most appealing to you, which frequently leads to one ultimate question: Do I want to be an enrolled agent (EA) or a certified public accountant (CPA)?
Which Option is Right for You and Your Future?
The two most common areas of concentration for recent accounting graduates are tax and audit. If auditing seems like the right fit for you, obtaining your CPA license is more than likely your best route. CPAs are able to apply their skills and credentials in a wider variety of areas than EAs, including government, tax, non-profit organizations, industry, and audit. Because of this, there are typically more career options available to those with CPA licensure.
It is important to note, however, that becoming a CPA is measurably more difficult than becoming an EA. This is because an EA is dedicated entirely to tax rather than a multitude of potential areas. One of the benefits of becoming an EA — in addition to the comparatively simpler career path — is the fact that they are legally able to represent taxpayers when the IRS is involved. Taxpayers with more complex situations are often concerned about the risk of being audited, and the knowledge that they’ll have an enrolled agent in their corner is invaluable. While CPAs also possess the ability to represent their customers before the IRS, the more specialized nature of their business may make doing so on a regular basis less practical in the long run.
What You Should Know About the EA Exam
One of the most surprising aspects of the enrolled agent exam is that it’s so affordable. According to the IRS, each of the three portions of the special enrollment exam costs only $184.97. When compared to the prices associated with many other accounting credentials — some of which come out to more than $1,000 — your total monetary investment for the EA exam is a relatively minor one.
As is the case with any other type of test, diligent studying for the EA exam is crucial. While the IRS does not provide a guidebook outlining the specifics of the exam, all of the information you’ll need to pass is publicly available. However, to avoid spending an inordinate amount of time and effort sifting through the full Internal Revenue Code — and all of the other IRS information found online — you may consider a dedicated course like Surgent EA Review to fully prepare yourself for the exam. This comprehensive course addresses all components of the exam, which are:
- Part One: Individuals – 100 Questions, 3.5 Hours
- Preliminary Work and Taxpayer Data – 17 Questions
- Income and Assets – 21 Questions
- Deductions and Credits – 21 Questions
- Taxation and Advice – 14 Questions
- Specialized Returns for Individuals – 12 Questions
- Part Two: Businesses – 100 Questions, 3.5 Hours
- Business Entities – 28 Questions
- Business Financial Information – 39 Questions
- Specialized Returns and Taxpayers – 18 Questions
- Part Three: Representation, Practices and Procedures – 100 Questions, 3.5 Hours
- Practices and Procedures – 25 Questions
- Representation Before the IRS – 24 Questions
- Specific Types of Representation – 19 Questions
- Completion of the Filing Process – 17 Questions
Another important consideration is timing. Due to the seasonal nature of the tax business, there is a blackout period during March and April in which the exam is unavailable. Therefore, the testing window runs from May of any given year through February of the next. The three parts of the special enrollment exam must be completed within a two-year period, so be sure to keep this window in mind.
Ultimately, whether you choose to pursue a career as a CPA or an EA, your decision will set you apart from your competition and propel your practice forward. The primary difference between these paths is the level of commitment you’re comfortable putting forth in preparation and execution. To explore more of the resources available to help you succeed in your professional endeavors, check out Surgent’s list of EA and CPA Review courses.