A Licensed Public Accountant or CPA is a particular type of accountant. Formally it’s the title of somebody in the United States, who has passed the Uniform Certified 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 150 hours of special education.
But what does this imply to you as a small business owner. Do you need a CPA or will an everyday accountant or perhaps a bookkeeper be ample for what you are promoting?
Most individuals use the time period CPA and accountant interchangeably however there is a very big difference. The CPA designation carries a number of weight within the financial community and positively within the accounting profession.
Companies Provided By Certified Public Accountants
In public accounting, those accounting services provided to a business on a contract foundation, a CPA attests to and provides assurances that financial statements are reasonable and accurate and adright here to generally 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 maintain independence from the entity for which they’re conducting an audit and review, often called an attestation.
A CPA may also work as a consultant, advising firms on acceptable business practices and making suggestions on financial management. Typically these consultants don’t work as auditors for a company on the identical time they are performing as consultants.
As part of the certification, a CPA should full 40 hours of continuing professional training (CPE) yearly to keep up with the new rules 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 Licensed Public Accountant will belong to a state association with the goal of keeping up to date with the accounting community and taking continuing education classes. In fact tax laws change continuously and any good CPA will spend time staying abreast of adjustments in monetary areas. As a member of an area affiliation they have access to the latest thinking and rules in the accounting area.
Why You Need A CPA
If for no other reason than Tax Planning it’s good to have the advice of an accountant. And so far as enterprise management and financial advice access to a good accountant may be very desirable.
But does that mean you want a CPA?
On the whole you’ll be able to assume that anybody who has taken the time to get certified as a CPA, and maintain that certification, is on the upper levels of the skunwell set of an accountant. It is a clear credibility booster to be a CPA. If your small business can afford the very best than a CPA is definitely worth the money.
However does that imply they’re better than a typical accountant. Of course not. However it does point out a level of commitment that’s price considering. Definitely if authorized proceedings are required, the reassurance of a CPA will hold more weight than a typical accountant. Again a lot relies on the reputation of the CPA within the community as well. Certainly 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 general financial planning not only for small and enormous companies but also for estate planning, investments, and strategic planning.