A Certified Public Accountant or CPA is a special type of accountant. Formally it’s the title of someone within the United States, who has passed the Uniform Certified Public Accounting Examination and has met some additional state schooling and experience requirements to get this certification. This test is grueling and requires upwards of one hundred fifty hours of special education.
But what does this mean to you as a small business owner. Do you want a CPA or will a regular accountant or even a bookkeeper be sufficient for your enterprise?
Most individuals use the time period CPA and accountant interchangeably however there is a very big difference. The CPA designation carries a whole lot of weight within the financial community and certainly within the accounting profession.
Providers Provided By Licensed Public Accountants
In public accounting, these accounting companies provided to a enterprise on a contract basis, a CPA attests to and gives assurances that monetary statements are reasonable and accurate and adright here to typically accepted accounting principles (GAAP). Additionally they 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 are conducting an audit and evaluate, typically called an attestation.
A CPA can also work as a consultant, advising corporations on settle forable business practices and making recommendations on financial management. Typically these consultants don’t work as auditors for an organization at the same time they’re appearing as consultants.
As part of the certification, a CPA should full forty hours of continuous professional training (CPE) every year to keep up with the new guidelines and rules within the monetary, accounting, and enterprise 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 association with the goal of keeping up to date with the accounting community and taking continuing training classes. In fact tax laws change frequently and any good CPA will spend time staying abreast of adjustments 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 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 business management and monetary advice access to a great accountant could be very desirable.
However does that mean you need a CPA?
Usually you possibly can assume that anybody who has taken the time to get licensed as a CPA, and preserve that certification, is on the upper levels of the skunwell set of an accountant. It is a clear credibility booster to be a CPA. If your corporation can afford the best than a CPA is well worth the money.
But does that mean they are higher than a typical accountant. After all not. But it does indicate a level of commitment that is value considering. Definitely if authorized proceedings are required, the assurance of a CPA will hold more weight than a typical accountant. Once more a lot depends 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 a lot more than audits these days. They provide consulting and total monetary planning not only for small and enormous companies but in addition for estate planning, investments, and strategic planning.