A Certified Public Accountant or CPA is a particular type of accountant. Formally it’s the title of somebody in the United States, who has passed the Uniform Certified Public Accounting Examination and has met some additional state education and expertise requirements to get this certification. This test is grueling and requires upwards of a hundred and fifty hours of special education.
But what does this mean to you as a small business owner. Do you need a CPA or will a regular accountant or even a bookkeeper be sufficient for what you are promoting?
Most people use the term CPA and accountant interchangeably however there is a very big difference. The CPA designation carries plenty of weight within the monetary community and positively within the accounting profession.
Providers Provided By Licensed Public Accountants
In public accounting, those accounting companies provided to a enterprise on a contract foundation, a CPA attests to and offers assurances that monetary statements are reasonable and accurate and adhere to generally 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 overview, often called an attestation.
A CPA may also work as a consultant, advising firms on settle forable enterprise practices and making recommendations on monetary management. Typically these consultants do not work as auditors for a corporation at the same time they are performing as consultants.
As part of the certification, a CPA must complete 40 hours of continuing professional training (CPE) yearly to keep up with the new rules and regulations 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 association with the goal of keeping updated with the accounting community and taking persevering with education classes. In fact tax laws change often and any good CPA will spend time staying abreast of adjustments in monetary areas. As a member of a neighborhood affiliation they have access to the latest thinking and rules 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 monetary advice access to a good accountant is very desirable.
But does that imply you want a CPA?
Normally you possibly can assume that anybody who has taken the time to get certified as a CPA, and keep that certification, is on the higher levels of the skin poor health set of an accountant. It is a clear credibility booster to be a CPA. If your small business can afford one of the best than a CPA is definitely worth the money.
But does that imply they’re higher than a typical accountant. In fact not. But it does indicate a level of commitment that’s worth considering. Definitely if legal proceedings are required, the assurance of a CPA will hold more weight than a typical accountant. Again much is dependent upon the repute of the CPA in the community as well. Definitely 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 total monetary planning not only for small and huge businesses but in addition for estate planning, investments, and strategic planning.