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 schooling and expertise 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 need a CPA or will a daily accountant or perhaps a bookkeeper be ample for what you are promoting?
Most people use the term CPA and accountant interchangeably however there is a very big difference. The CPA designation carries a lot of weight within the financial community and definitely within the accounting profession.
Companies Provided By Licensed Public Accountants
In public accounting, these 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 typically accepted accounting rules (GAAP). In addition 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 take care of independence from the entity for which they’re conducting an audit and overview, often called an attestation.
A CPA can even work as a consultant, advising corporations on acceptable business practices and making recommendations on financial management. Typically these consultants do not work as auditors for a corporation on the same time they are acting as consultants.
As part of the certification, a CPA should full 40 hours of continuous professional training (CPE) every year to keep up with the new guidelines and rules in the monetary, accounting, and enterprise 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 schooling classes. Of course tax laws change often and any good CPA will spend time staying abreast of changes in monetary areas. As a member of a local affiliation they’ve access to the latest thinking and rules in the accounting area.
Why You Need 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 a great accountant may be very desirable.
However does that imply you need a CPA?
In general you’ll be able to assume that anybody who has taken the time to get licensed as a CPA, and preserve that certification, is on the higher levels of the skill set of an accountant. It’s a clear credibility booster to be a CPA. If your small business can afford one of the best than a CPA is worth the money.
However does that mean they are higher than a typical accountant. After all not. But it does point out 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 will depend on the popularity of the CPA in the community as well. Definitely an audit by a CPA has an implied level of credibility.
And CPA’s do much more than audits these days. They provide consulting and overall financial planning not only for small and enormous companies but additionally for estate planning, investments, and strategic planning.