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 Certified 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 imply to you as a small enterprise owner. Do you need a CPA or will an everyday accountant or even a bookkeeper be enough for your enterprise?
Most people use the time period CPA and accountant interchangeably however there’s a very big difference. The CPA designation carries loads of weight within the financial community and certainly within the accounting profession.
Companies Provided By Certified Public Accountants
In public accounting, those accounting companies provided to a enterprise on a contract basis, a CPA attests to and provides assurances that financial statements are reasonable and accurate and adhere to typically accepted accounting principles (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 keep up independence from the entity for which they are conducting an audit and evaluation, often called an attestation.
A CPA can even 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 corporation on the identical time they are appearing as consultants.
As part of the certification, a CPA should full 40 hours of continuous professional education (CPE) yearly to keep up with the new guidelines and regulations 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 Certified Public Accountant will belong to a state affiliation with the goal of keeping updated with the accounting community and taking continuing training classes. Of course tax laws change frequently and any good CPA will spend time staying abreast of changes in monetary areas. As a member of a local association they have 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 as far as business administration and financial advice access to a good accountant is very desirable.
However does that mean you need a CPA?
In general you possibly can assume that anyone who has taken the time to get certified as a CPA, and maintain that certification, is at the upper levels of the skunwell set of an accountant. It’s a clear credibility booster to be a CPA. If what you are promoting can afford the most effective than a CPA is well worth the money.
But does that imply they’re higher than a typical accountant. Of course not. However it does point out 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 on the popularity of the CPA in the community as well. Actually 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 total monetary planning not only for small and huge companies but also for estate planning, investments, and strategic planning.