A Certified Public Accountant, known as a CPA, is someone licensed to practice public accounting in a specific state. CPA licenses are issued by state boards of accountancy after the passage of an exam. Although each state has different CPA licensure requirements, all CPAs will take a uniform CPA exam to earn their license. The uniform CPA exam demonstrates that the individual has a technical understanding of financial accounting.
CPA candidates will take a four-part test, which is comprised of three main sections and one section of the candidates’ choice. The required sections include Auditing and Attestation, Financial Accounting and Reporting, and Taxation and Regulation. Candidates will also choose one of the following CPA exam sections: Business Analysis and Reporting, Information Systems and Control, and Tax Compliance and Planning.
There isn’t one path that accounting professionals with a CPA certification can pursue. Some CPAs work at CPA firms, while others pursue forensic accounting or work in the private sector. A CPA firm is an accounting firm comprised primarily of CPAs. These companies will offer a variety of tax and financial services.
The main sectors that CPAs work in include public accounting, business and industry, government, education, and not-for-profit. Within each of these industries, CPAs can take on different roles, such as financial accounting, financial consulting, tax preparation and planning, auditing, and management accounting.
All CPAs are accountants, but not all accountants hold the CPA credential. Accounting professionals maintain and interpret your financial records. In addition, accountants can also prepare and file tax returns. CPAs can do all of the above and issue assurance statements. To certify financial statements, conduct audits, and defend a tax return before the IRS, the accountant must have a CPA designation.
Accountants with a CPA license offer a variety of benefits to business owners. Let’s explore a few of these advantages in more detail.
CPAs are experts in financial accounting and tax, giving them the ability to audit your records and filings for compliance. This can include compliance with different regulations like International Accounting Standards and Generally Accepted Accounting Principles.
CPAs have the necessary credentials to issue formal financial statements, whether in the form of a review or an audit. Many lenders, investors, and other external third parties require an independent assessment of your financial statements, which a CPA can provide.
CPAs understand the intricacies of financial accounting and tax, helping you lower your tax bill and unlock strategic growth. Many CPA firms offer ongoing consulting services, allowing you to stay on top of legislative changes and determine what is needed to grow your business.
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