A Licensed Public Accountant or CPA is a special type of accountant. Officially 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 education 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 mean to you as a small business owner. Do you want a CPA or will an everyday accountant or perhaps a bookkeeper be enough for your small business?
Most people use the time period CPA and accountant interchangeably but there’s a very big difference. The CPA designation carries a lot of weight within the financial community and definitely within the accounting profession.
Providers 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 monetary statements are reasonable and accurate and adright here 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 maintain independence from the entity for which they are conducting an audit and assessment, often called an attestation.
A CPA also can work as a consultant, advising corporations on acceptable enterprise practices and making recommendations on financial management. Typically these consultants don’t work as auditors for an organization at the identical time they’re performing as consultants.
As part of the certification, a CPA must full forty hours of constant professional education (CPE) yearly to keep up with the new rules and laws within the financial, accounting, and enterprise world. This is proof of the high level of expectations of the accounting profession for a Certified Public Accountant.
Typically a Licensed Public Accountant will belong to a state association with the goal of keeping up to date with the accounting community and taking persevering with schooling classes. After all tax laws change regularly and any good CPA will spend time staying abreast of changes in monetary areas. As a member of an area affiliation they have access to the latest thinking and rules within the accounting area.
Why You Want A CPA
If for no other reason than Tax Planning it’s good to have the advice of an accountant. And so far as business administration and monetary advice access to a superb accountant is very desirable.
But does that imply you want a CPA?
In general you can assume that anybody who has taken the time to get certified as a CPA, and preserve that certification, is on the upper levels of the skin poor health set of an accountant. It’s a clear credibility booster to be a CPA. If your small business can afford the best than a CPA is worth the money.
But does that imply they’re 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 reassurance of a CPA will hold more weight than a typical accountant. Once more a lot depends upon 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 a lot more than audits these days. They provide consulting and overall monetary planning not only for small and huge companies but additionally for estate planning, investments, and strategic planning.