A Certified Public Accountant or CPA is a particular type of accountant. Officially it’s the title of someone within the United States, who has passed the Uniform Licensed Public Accounting Examination and has met some additional state education and expertise necessities to get this certification. This test is grueling and requires upwards of one hundred fifty hours of special education.
However what does this imply to you as a small business owner. Do you need a CPA or will a regular accountant or even a bookkeeper be ample for what you are promoting?
Most individuals 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 definitely within the accounting profession.
Companies Provided By Licensed Public Accountants
In public accounting, those accounting providers provided to a enterprise on a contract basis, a CPA attests to and provides assurances that financial statements are reasonable and accurate and adhere to typically 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 keep up independence from the entity for which they’re conducting an audit and assessment, often called an attestation.
A CPA can also work as a consultant, advising firms on settle forable business practices and making suggestions on financial management. Typically these consultants don’t work as auditors for a corporation at the identical time they’re performing as consultants.
As part of the certification, a CPA should full 40 hours of continuous professional education (CPE) yearly to keep up with the new rules and regulations within the financial, accounting, and enterprise world. This is proof of the high level of expectations of the accounting profession for a Certified Public Accountant.
Typically a Certified 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. After all tax laws change regularly and any good CPA will spend time staying abreast of modifications in financial 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 different 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 very good accountant could be very desirable.
But does that imply you need a CPA?
Typically you can assume that anybody who has taken the time to get certified 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 business can afford the perfect than a CPA is worth the money.
But does that mean they’re better than a typical accountant. In fact not. However it does point out a level of commitment that’s value considering. Actually if authorized proceedings are required, the peace of mind of a CPA will hold more weight than a typical accountant. Once more much is determined by the fame 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 total financial planning not only for small and large businesses but also for estate planning, investments, and strategic planning.