Updated on August 19, 2021
CPA – The Basics
A CPA (Certified Public Accountant) is an accountancy professional legally authorized and credentialed by a particular state or province to provide accounting services to the public for tax preparation. CPAs are often awarded the legal right to represent the general public before the courts. Their goal is to assist clients in understanding the complicated financial questions that may arise when filing for state and federal tax returns. To be a CPA, an individual must obtain an undergraduate degree from a four-year university or college specializing in accounting and a four-year pass from an exam known as the CPA exam.
CPA performs several duties on behalf of its clients. CPAs prepare client financial statements, conduct interviews of individuals for self-certification, review and sign government forms, prepare income tax reports and assist clients in filing tax returns. CPAs also write articles, perform research (for clients), and work as independent contractors. Many CPAs also act as CPAs for companies, helping them in their tax return preparation. CPAs perform these tasks in a variety of settings, depending on the requirements of their clients. Here are some of the typical work settings for CPAs.
You are hiring an accountant. When hiring a CPA to provide accounting services for your organization, it is essential to understand what your needs are. You may need an individual with knowledge of state and local taxation laws. You may also need someone knowledgeable about healthcare and retirement planning. If you have special needs for your CPA, such as disabilities, they must be trained to perform those services. It would help if you asked your potential CPA to provide a complete list of the services they offer.
Businesses. Many small businesses, as well as large corporations, hire accountants to help them with accounting services. CPAs can provide advice on investing, contract services, and payroll. They can also offer local tax advice to help business owners comply with their local tax laws. CPAs may also work as financial consultants to law firms, consulting clients on asset protection, retirement plans, and estate planning.
Public accounting. Certified public accountants (CPAs) are employed by government agencies such as the IRS, Medicare, Medicaid, and others to provide financial planning and audit services to federal, state, and local governments. They are required to meet a variety of licensing requirements to practice. CPAs can also work in specialty areas such as forensic accounting, insurance, and auditing.
Forensic accounting. This type of accountancy falls between traditional accountancy and forensic accounting. While the latter involves investigating crimes, the former refers to examining the activities of an institution or business in its entirety, usually looking for clues regarding the money laundering or fraudulent actions of that business. CPAs who specialize in forensic accounting can use software to create databases, track cell phone activity, and monitor bank transactions.
Certified public accountants (CPA). These accountants are required to take a test that covers general business knowledge, along with specific accounting knowledge and proficiency in computer software used to track data. CPAs with an accounting degree are preferred over CPAs without a degree, because CPAs have more training and can save the small businesses money by providing a more thorough service. Many small businesses are unaware of all the steps that CPAs need to follow in order to comply with the tax code, and hiring a professional CPA can help small businesses retain their accountant and save the company thousands of dollars in tax credits and payments every year.