A Certified Public Accountant or CPA is a special type of accountant. Formally it’s the title of someone within the United States, who has passed the Uniform Certified Public Accounting Examination and has met some additional state schooling and expertise necessities to get this certification. This test is grueling and requires upwards of a hundred and fifty hours of special education.
But what does this mean to you as a small business owner. Do you need a CPA or will a regular accountant or even a bookkeeper be adequate for your small business?
Most people use the time period CPA and accountant interchangeably however there is a very big difference. The CPA designation carries a lot of weight within the monetary community and positively within the accounting profession.
Services Provided By Certified Public Accountants
In public accounting, these accounting companies provided to a business on a contract basis, a CPA attests to and gives assurances that monetary 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 evaluation, often called an attestation.
A CPA may also 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 similar time they’re acting as consultants.
As part of the certification, a CPA should full 40 hours of continuing professional education (CPE) every year to keep up with the new guidelines and rules 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 affiliation with the goal of keeping up to date with the accounting community and taking continuing education classes. Of course tax laws change continuously and any good CPA will spend time staying abreast of modifications in financial areas. As a member of an area association they have access to the latest thinking and rules within the accounting area.
Why You Need 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 management and monetary advice access to a good accountant may be very desirable.
But does that mean you need a CPA?
Typically you may assume that anybody who has taken the time to get licensed as a CPA, and preserve that certification, is on the higher levels of the skailing set of an accountant. It is a clear credibility booster to be a CPA. If your business can afford one of the best than a CPA is definitely worth the money.
However does that imply they’re better than a typical accountant. After all not. However it does indicate a level of commitment that’s price considering. Certainly if legal proceedings are required, the peace of mind of a CPA will hold more weight than a typical accountant. Once more a lot is determined by 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 enormous companies but additionally for estate planning, investments, and strategic planning.