A Licensed Public Accountant or CPA is a special type of accountant. Formally it’s the title of somebody within the United States, who has passed the Uniform Licensed Public Accounting Examination and has met some additional state training and expertise requirements to get this certification. This test is grueling and requires upwards of a hundred and fifty hours of special education.
But what does this mean to you as a small business owner. Do you want a CPA or will an everyday accountant or even a bookkeeper be adequate for your business?
Most people use the term CPA and accountant interchangeably but there’s a very big difference. The CPA designation carries numerous weight within the monetary community and positively within the accounting profession.
Services Provided By Licensed Public Accountants
In public accounting, those accounting companies provided to a enterprise on a contract foundation, a CPA attests to and provides assurances that financial statements are reasonable and accurate and adhere to generally 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 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 suggestions on monetary management. Typically these consultants do not work as auditors for a company at the similar time they are acting as consultants.
As part of the certification, a CPA should full 40 hours of constant professional education (CPE) every year to keep up with the new rules and laws in 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 association with the goal of keeping updated with the accounting community and taking continuing schooling classes. In fact tax laws change often and any good CPA will spend time staying abreast of modifications in monetary areas. As a member of a neighborhood affiliation they have 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 so far as business management and monetary advice access to an excellent accountant is very desirable.
However does that imply 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 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 most effective than a CPA is worth the money.
However does that mean they are better than a typical accountant. In fact not. But it does point out a level of commitment that’s value considering. Definitely if authorized proceedings are required, the peace of mind of a CPA will hold more weight than a typical accountant. Again a lot relies on the repute of the CPA in 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 huge companies but also for estate planning, investments, and strategic planning.