A Licensed Public Accountant or CPA is a special type of accountant. Formally it’s the title of somebody within the United States, who has passed the Uniform Certified Public Accounting Examination and has met some additional state education and experience requirements to get this certification. This test is grueling and requires upwards of one hundred fifty hours of particular education.
However what does this imply to you as a small business owner. Do you need a CPA or will an everyday accountant or even a bookkeeper be sufficient for your online business?
Most individuals use the time period CPA and accountant interchangeably but there is a very big difference. The CPA designation carries quite a lot of weight within the financial community and certainly within the accounting profession.
Companies Provided By Licensed Public Accountants
In public accounting, these accounting services provided to a enterprise on a contract basis, a CPA attests to and offers assurances that monetary statements are reasonable and accurate and adhere to typically accepted accounting ideas (GAAP). Additionally they attest to the reasonableness of disclosures and that statements are free from “materials misstatement”.
As an auditor, a CPA’s are required by professional standards and Federal and State laws to maintain independence from the entity for which they’re conducting an audit and assessment, usually called an attestation.
A CPA also can work as a consultant, advising firms on settle forable enterprise practices and making recommendations on financial management. Typically these consultants don’t work as auditors for an organization on the same time they’re performing as consultants.
As part of the certification, a CPA must complete forty hours of continuous professional training (CPE) every year to keep up with the new guidelines and laws in the monetary, accounting, and business world. This is proof of the high level of expectations of the accounting profession for a Licensed Public Accountant.
Typically a Licensed Public Accountant will belong to a state affiliation with the goal of keeping updated with the accounting community and taking continuing schooling classes. After all tax laws change regularly and any good CPA will spend time staying abreast of changes in monetary areas. As a member of a local affiliation they have access to the latest thinking and guidelines in the accounting area.
Why You Need A CPA
If for no other reason than Tax Planning it’s good to have the advice of an accountant. And so far as enterprise administration and financial advice access to an excellent accountant is very desirable.
However does that mean you want a CPA?
Generally you can assume that anyone who has taken the time to get licensed as a CPA, and maintain that certification, is at the higher levels of the skailing set of an accountant. It is a clear credibility booster to be a CPA. If your small business can afford the very best than a CPA is well worth the money.
However does that mean they are better than a typical accountant. After all not. But it does indicate a level of commitment that is value considering. Certainly if authorized proceedings are required, the peace of mind of a CPA will hold more weight than a typical accountant. Once more a lot depends upon the repute of the CPA within the community as well. Actually an audit by a CPA has an implied level of credibility.
And CPA’s do much more than audits these days. They provide consulting and general financial planning not only for small and huge companies but also for estate planning, investments, and strategic planning.