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 schooling and experience requirements to get this certification. This test is grueling and requires upwards of 150 hours of particular education.
But what does this mean to you as a small enterprise owner. Do you want a CPA or will an everyday accountant or even a bookkeeper be enough for your small business?
Most people use the time period CPA and accountant interchangeably but there is a very big difference. The CPA designation carries a variety of weight within the monetary community and certainly within the accounting profession.
Companies Provided By Licensed Public Accountants
In public accounting, those accounting providers provided to a business on a contract basis, a CPA attests to and offers assurances that financial statements are reasonable and accurate and adright here to usually accepted accounting principles (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 are conducting an audit and review, often called an attestation.
A CPA may work as a consultant, advising firms on settle forable enterprise practices and making recommendations on financial management. Typically these consultants do not work as auditors for a company at the identical time they are acting as consultants.
As part of the certification, a CPA must full forty hours of continuing professional education (CPE) every year to keep up with the new rules and laws within 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 training classes. Of course tax laws change continuously and any good CPA will spend time staying abreast of adjustments in monetary areas. As a member of a local association 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 as far as business management and monetary advice access to a superb accountant could be very desirable.
But does that mean you want a CPA?
Basically 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’s a clear credibility booster to be a CPA. If your business can afford one of the best than a CPA is definitely worth the money.
But does that mean they’re higher than a typical accountant. After all not. But it does indicate a level of commitment that’s price considering. Actually if legal proceedings are required, the peace of mind of a CPA will hold more weight than a typical accountant. Once more much depends on 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 a lot more than audits these days. They provide consulting and general financial planning not only for small and enormous businesses but additionally for estate planning, investments, and strategic planning.