A Licensed Public Accountant or CPA is a special type of accountant. Formally it’s the title of someone in 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 one hundred fifty hours of particular education.
However what does this imply to you as a small business owner. Do you want a CPA or will a daily accountant or even a bookkeeper be sufficient for your small business?
Most individuals use the term CPA and accountant interchangeably but there is a very big difference. The CPA designation carries lots of weight within the monetary community and definitely within the accounting profession.
Providers Provided By Certified Public Accountants
In public accounting, those accounting providers provided to a enterprise on a contract foundation, a CPA attests to and offers assurances that monetary statements are reasonable and accurate and adhere to generally accepted accounting rules (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 take care of independence from the entity for which they’re conducting an audit and overview, often called an attestation.
A CPA can also work as a consultant, advising corporations on settle forable enterprise practices and making recommendations on financial management. Typically these consultants do not work as auditors for an organization at the identical time they are acting as consultants.
As part of the certification, a CPA should full 40 hours of continuing professional schooling (CPE) yearly to keep up with the new guidelines and regulations in the monetary, accounting, and business world. This is proof of the high level of expectations of the accounting profession for a Certified 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 training classes. In fact tax laws change frequently and any good CPA will spend time staying abreast of modifications in monetary areas. As a member of an area association they’ve access to the latest thinking and guidelines within 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 a good accountant is very desirable.
But does that mean you want a CPA?
Generally you may assume that anybody who has taken the time to get certified as a CPA, and keep that certification, is at 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 well worth the money.
However does that mean they are higher than a typical accountant. In fact not. However it does point out a level of commitment that’s worth considering. Actually if legal proceedings are required, the peace of mind of a CPA will hold more weight than a typical accountant. Again a lot will depend on the fame 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 also for estate planning, investments, and strategic planning.