A Certified Public Accountant or CPA is a particular type of accountant. Formally it’s the title of someone within the United States, who has passed the Uniform Certified Public Accounting Examination and has met some additional state training and experience requirements to get this certification. This test is grueling and requires upwards of 150 hours of particular education.
But what does this imply to you as a small business owner. Do you want a CPA or will an everyday accountant or even a bookkeeper be sufficient for your business?
Most individuals use the term CPA and accountant interchangeably but there’s a very big difference. The CPA designation carries lots of weight within the financial community and positively within the accounting profession.
Services Provided By Certified Public Accountants
In public accounting, these accounting providers provided to a enterprise 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 rules (GAAP). Additionally they 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 keep up independence from the entity for which they are conducting an audit and review, typically called an attestation.
A CPA may also work as a consultant, advising corporations on settle forable business practices and making recommendations on financial management. Typically these consultants don’t work as auditors for a corporation at the same time they’re performing as consultants.
As part of the certification, a CPA must full forty hours of constant professional training (CPE) every year to keep up with the new guidelines and regulations within the financial, accounting, and enterprise 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 up to date with the accounting community and taking continuing training classes. After all tax laws change often and any good CPA will spend time staying abreast of modifications in monetary areas. As a member of a local affiliation they have access to the latest thinking and rules in 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 a superb accountant is very desirable.
However does that mean you want a CPA?
Usually you can 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 skunwell set of an accountant. It is a clear credibility booster to be a CPA. If your enterprise can afford the most effective than a CPA is definitely worth the money.
But does that mean they’re higher than a typical accountant. In fact not. But it does indicate a level of commitment that’s price considering. Definitely if legal proceedings are required, the reassurance of a CPA will hold more weight than a typical accountant. Once more a lot depends upon the reputation of the CPA in 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 monetary planning not only for small and huge businesses but also for estate planning, investments, and strategic planning.