A Licensed Public Accountant or CPA is a special type of accountant. Officially it’s the title of somebody in the United States, who has passed the Uniform Licensed 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 one hundred fifty hours of particular education.
But what does this mean to you as a small enterprise owner. Do you want a CPA or will a daily accountant or perhaps a bookkeeper be enough for your business?
Most people use the term CPA and accountant interchangeably but there’s a very big difference. The CPA designation carries a whole lot of weight within the monetary community and positively within the accounting profession.
Providers Provided By Licensed Public Accountants
In public accounting, those accounting providers 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 generally accepted accounting rules (GAAP). They also 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 overview, often called an attestation.
A CPA may also work as a consultant, advising companies on acceptable enterprise practices and making recommendations on monetary management. Typically these consultants don’t work as auditors for a corporation at the identical time they are appearing as consultants.
As part of the certification, a CPA must complete forty hours of continuous professional education (CPE) yearly to keep up with the new guidelines and rules in the financial, 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 education 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 an area affiliation they’ve access to the latest thinking and guidelines 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 as far as enterprise management and financial advice access to an excellent accountant is very desirable.
But does that mean you need a CPA?
On the whole you possibly can assume that anyone who has taken the time to get certified as a CPA, and keep that certification, is at the higher levels of the skin poor health set of an accountant. It is a clear credibility booster to be a CPA. If what you are promoting can afford the perfect than a CPA is definitely worth the money.
But does that imply they are better than a typical accountant. Of course not. However it does indicate a level of commitment that’s price considering. Actually if authorized proceedings are required, the reassurance of a CPA will hold more weight than a typical accountant. Again a lot is determined by the popularity of the CPA in the community as well. Certainly 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 general monetary planning not only for small and huge companies but also for estate planning, investments, and strategic planning.