A Certified Public Accountant or CPA is a special type of accountant. Officially 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 experience requirements to get this certification. This test is grueling and requires upwards of one hundred fifty hours of special education.
But what does this mean to you as a small business owner. Do you want a CPA or will a regular accountant or perhaps a bookkeeper be sufficient for your corporation?
Most people use the term CPA and accountant interchangeably however there is a very big difference. The CPA designation carries loads of weight within the monetary community and positively within the accounting profession.
Providers Provided By Licensed Public Accountants
In public accounting, these accounting services provided to a enterprise on a contract foundation, a CPA attests to and provides assurances that monetary statements are reasonable and accurate and adhere to usually accepted accounting ideas (GAAP). Additionally 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 evaluation, usually called an attestation.
A CPA may also work as a consultant, advising corporations on settle forable enterprise practices and making suggestions on financial management. Typically these consultants do not work as auditors for a corporation on the identical time they’re performing as consultants.
As part of the certification, a CPA should full forty hours of continuing professional schooling (CPE) every year to keep up with the new rules and rules in the financial, accounting, and business 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 updated with the accounting community and taking persevering with education classes. After all tax laws change incessantly and any good CPA will spend time staying abreast of adjustments in financial areas. As a member of a local affiliation they’ve access to the latest thinking and rules within 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 business administration and financial advice access to an excellent accountant may be very desirable.
However does that imply you want a CPA?
Generally you can assume that anybody who has taken the time to get licensed as a CPA, and maintain that certification, is at the higher levels of the sksick set of an accountant. It is a clear credibility booster to be a CPA. If your business can afford the most effective than a CPA is worth the money.
However does that imply they are higher than a typical accountant. Of course not. But it does indicate a level of commitment that is price considering. Definitely if authorized proceedings are required, the reassurance of a CPA will hold more weight than a typical accountant. Again a lot is determined by the repute of the CPA in the community as well. Certainly 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 huge businesses but also for estate planning, investments, and strategic planning.