Certified
Public Accountant (CPA)
A person who has met state requirements for education
and work experience, passed a national exam, and met other
licensing requirements. Certified Public Accountants in
public accounting practice prepare tax returns, perform
audits, do accounting, and give advice to their clients
on financial matters.
A CPA is much more than its definition of Certified Public
Accountant. The term certified refers to the licensing
to carry on business as a CPA and meeting the standards
as promulgated by the American Institute of CPAs and the
various state societies.
To be initially licensed, an individual must pass a
rigorous examination, which is uniform among the states,
and then obtain a certain amount of experience working
for a firm which performs examinations of financial
statements and renders a report upon them. The term
public accountant refers to the role as an accountant,
who handles recordkeeping and reporting matters for
the public. However, the term CPA, in sum, means to
most people much more than these parts of certifed and
public accountant. A CPA is a very trusted advisor of
both individuals and of businesses.
CPAs are relied upon so much because of not only their
keen analytical and decision-making skills but also
their objectivity, integrity and dedication to service.
Many CPAs provide services well beyond accounting, auditing
and reporting. Some are business and management consulting,
information technology consulting, tax planning and
preparation, personal financial planning, valuation
services, elder care services, and compliance. The consumer
often expects a CPA to be proficient at many specializations,
even those just indirectly related to the traditional
role of an accountant. The CPA's role has been quickly
expanding, and one leading CPA proposed that the term
CPA more appropriately stand for Certified Professional
Advisor. The CPA profession is currently grappling with
how best to define the CPA in today's world and whether
to change the moniker CPA. One preliminary recommendation
of the AICPA for a new term to encompass CPAs worldwide
has met with much criticism within the industry. Stay
tuned for further developments.
One thing is clear - the CPA is a very valued and trusted
advisor and a professional who has not only kept up
with the quickly changing world around us, but who has
helped shape it.
Why is it a good idea to get the help of a Certified
Public Accountant?
The answer depends largely on with whom the CPA is being
compared? A CPA compared to an accountant who is not
a CPA. CPAs are better qualified than accountants who
are not CPAs because of the requirements for the CPA
examination, experience, and continuing education. On
the other hand, certain accounting, reporting, review,
and auditing services can only provided by CPAs.
A CPA compared to a professional advisor. CPAs, in
general, are bred to be independent and objective, and
have intense training and experience with certain decision-making
skills including careful research and analysis. The
CPA can provide a client with a perspective that is
more balanced and measured, and seeing many angles can
lead to creative breakthroughs.
How is a CPA different from an accountant?
A CPA is different from an accountant who is not a CPA
in many important respects:
Higher level of knowledge and experience with serving
clients.
Greater experience with issues involving independence
and objectivity.
Deeper understanding of matters which are not traditionally
in the domain of accounting, such as personal financial
planning and information technology consulting, but
which are related to accounting and serving clients
Credentials.
More experience working with other professionals such
as attorneys, brokers, agents, etc.
A CPA compared to doing it yourself.
In many matters, you simply cannot do it yourself. It
would take too long to acquire the necessary level of
knowledge and skills. But in many matters, you might
be able to do it alone - whether it is accounting and
recordkeeping, or preparing income tax returns, or developing
internal controls and procedures, or establishing a
valuation, or starting or restructuring a business,
or setting out personal financial plans or making financial
decisions, or a thousand other money-related matters.
But operating on your own, without guidance, is like
putting an addition on your house without the help of
an architect, or carpenter, or electrician, or plumber,
or painter. You could learn to do the tasks, but probably
not with as much skill as the experts, and the years
necessary to acquire the knowledge and experience would
make anticlimactic the completion of the task. Even
if you could finish the house addition within enough
time to enjoy it, it might not be built well enough
to stand up over time. Also, two heads are always, well
almost always, better than one. If you are a smart independent
self-starter, try this approach - do all the research,
lay the plans, assemble the team if others could be
involved, and then call in the CPA to be quarterback,
or at least your guide
If you are an individual or a business and you need
to choose a CPA, there are many guidelines which might
be helpful. They fall into these categories:
1. Determine your needs and desires, immediate and
narrow, and longer-term and broader and make an assessment
of your own particular circumstances, quirks and preferences
2. Gather several candidates, using various methods
such as (a) referrals from close associates (b) directories
such as CPAdirectory.com (c) searches among information
sources such as industry publications, articles, internet
search engines, etc.
3. Match what you need and want from #1 with the candidates
from #2 for an initial short list of candidates to interview.
4. Conduct interviews and use the article Choosing
the Right CPA for guidance as to particular questions
and attributes to consider. 5. Narrow the list based
on subjective considerations such as chemistry, attitude,
impressions, etc., and return to step #1 if not fully
satisfied
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