A Certified Public Accountant or CPA is a particular type of accountant. Formally it’s the title of someone in the United States, who has passed the Uniform Certified Public Accounting Examination and has met some additional state training and expertise requirements to get this certification. This test is grueling and requires upwards of a hundred and fifty hours of particular education.
However what does this mean 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 small business?
Most people use the term CPA and accountant interchangeably but there’s a very big difference. The CPA designation carries a variety of weight within the monetary community and certainly within the accounting profession.
Services Provided By Licensed Public Accountants
In public accounting, those accounting companies provided to a business on a contract foundation, a CPA attests to and offers assurances that monetary statements are reasonable and accurate and adhere to generally accepted accounting ideas (GAAP). They also attest to the reasonableness of disclosures and that statements are free from “material 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 evaluation, often called an attestation.
A CPA can even work as a consultant, advising firms on settle forable business practices and making suggestions on financial management. Typically these consultants do not work as auditors for an organization at the same time they’re performing as consultants.
As part of the certification, a CPA must full 40 hours of continuous professional training (CPE) yearly to keep up with the new rules and rules within 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 Certified Public Accountant will belong to a state association with the goal of keeping updated with the accounting community and taking continuing schooling classes. In fact tax laws change continuously and any good CPA will spend time staying abreast of changes in financial areas. As a member of an area association they have access to the latest thinking and guidelines in the accounting area.
Why You Want 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 may be very desirable.
However does that imply you want a CPA?
Typically you’ll be able to assume that anybody who has taken the time to get certified as a CPA, and keep that certification, is at the upper levels of the sksick set of an accountant. It’s a clear credibility booster to be a CPA. If your small business can afford the very best than a CPA is definitely worth the money.
But does that imply they’re better than a typical accountant. Of course not. However it does indicate a level of commitment that’s price considering. Certainly if legal proceedings are required, the peace of mind of a CPA will hold more weight than a typical accountant. Again much will depend on 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 monetary planning not only for small and large companies but additionally for estate planning, investments, and strategic planning.