Do You Need A Degree To Be an APA®

I received an email recently through the “contact” form on the website. It was from a young person who was interested in becoming an APA but did not have a college degree. She writes:

“…Let me give you some background. I am 28 years old; I do not have a bachelor’s degree or any certification in accounting other than I have 4 years of experience as an Accounts Payable Analyst in petroleum accounting. I want to further myself in my career and secure my future, and I know being an APA will do just that. I want to take my future into my own hands because I feel like I am being held back in my career. I have read your “bad news” and that got me really discouraged. Am I in over my head trying to take this on? I feel like I have the smarts to study for this and pass it. I am looking at a two year study plan. Is this doable for me? I guess my real question is; do I need more experience and knowledge before starting this study program? I have a general knowledge of all of the areas outlined in the exam, but in no way am I an expert or even solid in that knowledge. I saw that there are 186 registered APAs in the US and that is terrifying to me. I want the elite status, I want to further my career, secure myself and I do not want to go back to college. I feel like being an APA would give me that extreme edge in the field. I am ready to do the work. Do you think a “beginner” like me can pass this test, with two years of diligent studying? I guess I just want some insight and a little encouragement. Like I said, I am ready to take this on and I am very self-motivated and when I put my mind to something, I will accomplish it. After reading your “bad news” though, I felt a little in over my head. Any words of wisdom would be greatly appreciated…”

There are a few questions in here, let me break them out and take them one at a time:

Is it worth it?

I think so!

Because the test has proven so difficult to pass (more on that later); fewer than 200 people in the last decade have passed all eight parts. COPAS is currently revisiting the subject matter coverage of the test and starting a marketing campaign to get employers more familiar with the accomplishment of gaining the APA® designation. Some companies highly value it; some don’t know what it is. That’s no problem; put it on your resume and let them ask. It’s my belief that in the next few years it’s going to become a big thing! If you already work for an oil & gas company, when the yearly review comes up, it’s your time to shine, not just when you pass all eight, just that you are passing any of them!

For me personally, it was an eye opener. I’m in internal audit; I move all around the company and have to deal with every phase of operations and accounting. It made me so much more valuable to the company. I can sit with members of the board or pumper’s in the field and follow the conversation and even ask intelligent questions (because nobody knows it all)!

Finally, while every other industry has yet to recover from the recession (and won’t in my opinion), the oil and gas industry is booming and likely will for the next few decades. Specialized knowledge creates an environment where finding a job is easier and pay is generally higher.

Is a college degree or accounting certification required to become an APA®?

No! According to TR-46 – APA® Accredited Information guidebook the requirements are:

  1. A four-year College degree with 12 hours of accounting, or
  2. Five years of experience in the petroleum industry, or
  3. A licensed CPA

With one more year of employment you would qualify! I think this is one of the most beautiful aspects of the APA® program. There are so many people in the petroleum business that I know, that are so much more knowledgeable than me, that DON’T HAVE A DEGREE! The downside is that many companies will not hire someone even as an AP clerk without a degree! I think it’s gradually becoming known that a typical college degree turns you into an indentured servant for a typical middle class student owing $25-50,000 for a bachelor’s degree (hint: do it on-line for $15,000). What more, it’s unlikely that college will teach anything useful about oil & gas accounting.

Is it a really difficult test?

Let’s first define difficult, it means many things to many people.

You do not have to be a rocket scientist! There are no quantum mechanics questions on the test (though believe it or not, there may be a simple organic chemistry question). There is nothing on this test that is beyond an ordinary person’s capability to comprehend with one exception: In the Financial Reporting module you need to understand some simple accounting entries. It’s possible to pass the test without knowledge of accounting as I would guess that 10% or less of the questions in Financial Reporting would require actual debit /credit knowledge. It’s the calculations behind the entries that they really test you on. If you have one year (two semesters) of accounting you can understand the entries. In fact, I would bet you could even short cut that with self-study but it’s separate from the APA® study. That’s a different subject.

It’s difficult because it’s so much material! The most common reason I hear from people that fail a test is that they did not expect it to cover so much detail! Each test may be only forty multiple choice questions but you have got to know the material! I find that most people thought it would be “easy”, meaning easy questions that you could guess at. Not so! It’s not that it’s particularly hard material; it’s just a lot to digest. It takes patience and planning. Further, most people lack both discipline and study skills to take an exam like this unless it’s spoon-fed (like a CPA review course). If you use my site, I’ll give you lots of clues and information to help you study efficiently and also know when you have studied enough. My study guides are of great value. They organize information to study and reinforce what you have read, and they are FREE! I’d love to provide you sample tests and even video courses but that takes time and money to produce. If you have the qualities I’ve described above, you will have no problem passing. I’m having difficulty getting hard statistics but I sense that since I started offering the study guides last year, the folks that are using them are doubling the passing rate and studying less hours. You still have to know the material!

You don’t have to be an expert! Someone who can’t even spell P-E-T-R-O-L-E-U-M can pass these test, especially if you take the test in the order I recommend (Operations first), one builds and even overlaps another. I find that passing any of these tests will not make you an expert in any field; it just gives to a good basis to start in that field. Don’t assume you have to be an expert to pass any of these exams, you don’t. By passing the basics it puts you so far ahead of anyone else! You will quickly become an expert working in the job. In fact, you are sure to know things even the seasoned employees don’t know (or forgot).

You don’t have to pass every exam immediately

Here’s the best part. In my humble opinion, take two years to pass these exams. But think about this:

If you want to short cut your advancement and you already work in AP, take the Operations exam for some overall knowledge, then ignore my advice above and take the Joint Interest exam, it’s a short step career advancement accompanied by a pay increase and more career security. From there, take the Revenue exam and move into the revenue side. If it’s revenue gas accounting, it’s a very specialized world and good pay! From either of those, look at audit, either joint venture or vendor audits if they are done separately. There is also lots of room for division order analyst and landman if you take the law portion. Unfortunately, you will likely not get into Financial Reporting or Internal Audit (within a large company) without a college degree (and likely a CPA).

If you are an APA® and find a small oil and gas company (and there are thousands) that needs someone to handle everything, having an APA® assures you have the knowledge to take on the job providing you know double-entry accounting and you can rely on the company’s CPA firm (or a mentor) for some guidance. You can get rich in one of those jobs if the company does well, then sells out. I know some people, most recently some friends had their company sold right out from under them, and they all got a YEARS severance pay!