A certified public accountant (CPA) is a professional who has met state licensing requirements for CPA designation. This designation pertains to accounting and finance.
This business professional can perform many advanced duties pertaining to finances. A CPA is a trusted advisor who assists businesses, individuals, and organizations strategize and reach their financial goals.
All CPAs are accountants, but not all accountants are CPAs. Certified public accountants are educated as accountants, then advance their training by preparing for the CPA exam.
Once an accountant has passed the certification exam they will need to complete a certain number of continuing education hours each year to ensure that they remain current with all new advancements in the accounting profession.
Each state has different requirements for CPA certification. Most require individuals to obtain a bachelor’s degree in accounting or a related field prior to sitting for the Universal CPA exam. Most states also require an additional year of accounting-focused education to become licensed. This is referred to as the “150-Hour Rule,” which means the individual needs five years of full-time equivalent study. Some states may also have a residency or citizenship requirement.
Each state or jurisdiction has its own board of accountancy or equivalent governing body that determines eligibility and issues licenses. Completing 1 to 2 years of relevant work experience may also be necessary.
After passing the Universal CPA exam and completing all licensing requirements, certified public accountants must complete a certain number of continuing education hours each year. In many states and jurisdictions, this is approximately 40 hours annually.
Certified public accountants have more flexibility in the tasks they are able to perform because of advanced training. These may include:
Duties may vary depending on the needs of the client or business.
As a business owner, it’s crucial you ensure that your company maintains accurate financial records. Depending on the size of your business and the complexity of accounting needs, you may or may not choose to hire a certified public accountant.
A CPA can be a great asset whether you are an established legal entity or a startup. These professionals can do much more than just your taxes. A certified public accountant can prepare your financial statements, offer bookkeeping services, and help you set up an accounting system that works for your business.
Another important certified public accountant advantage is their ability to help your company budget and forecast cash flow. This information allows you to make better decisions about the direction of your business and where to invest for growth. A CPA can also handle your payroll services.
There is really no disadvantage to having a trained financial professional on your staff. If you have a small business with very simple accounting needs, you may not have enough work to need a CPA just yet and can opt to save costs in payroll by outsourcing your bookkeeping or taxes.
The certified public accountant definition pertains to a professional delegation of certification in the area of accounting and finance.
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Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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