A Licensed Public Accountant or CPA is a special 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 training and expertise necessities 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 business owner. Do you need a CPA or will a daily accountant or perhaps a bookkeeper be sufficient for your enterprise?
Most people use the term CPA and accountant interchangeably however there is a very big difference. The CPA designation carries loads of weight within the monetary community and definitely within the accounting profession.
Providers Provided By Licensed Public Accountants
In public accounting, these accounting providers provided to a business on a contract basis, a CPA attests to and gives assurances that financial statements are reasonable and accurate and adhere to usually accepted accounting ideas (GAAP). In addition 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’re conducting an audit and review, usually called an attestation.
A CPA can also work as a consultant, advising companies on settle forable enterprise practices and making recommendations on monetary management. Typically these consultants do not work as auditors for an organization at the same time they are appearing as consultants.
As part of the certification, a CPA must complete forty hours of continuing professional training (CPE) every year to keep up with the new guidelines and regulations 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 Certified Public Accountant will belong to a state affiliation with the goal of keeping updated with the accounting community and taking persevering with training classes. In fact tax laws change often and any good CPA will spend time staying abreast of changes in monetary areas. As a member of a local association they’ve access to the latest thinking and rules within the accounting area.
Why You Need A CPA
If for no other reason than Tax Planning it’s good to have the advice of an accountant. And as far as enterprise administration and financial advice access to an excellent accountant could be very desirable.
However does that imply you need a CPA?
In general you may assume that anyone who has taken the time to get licensed as a CPA, and maintain that certification, is at the upper levels of the skill 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 well worth the money.
But does that mean they are higher than a typical accountant. Of course not. But it does indicate a level of commitment that is price considering. Certainly if authorized proceedings are required, the reassurance of a CPA will hold more weight than a typical accountant. Again much depends upon the status of the CPA within the community as well. Definitely 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 additionally for estate planning, investments, and strategic planning.