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About Certified Public Accountant (CPA)
All U.S citizens must file their tax returns every year. Similarly, even all companies and businesses need to file their annual taxes. If you are a working individual, you may choose to file your taxes with IRS.
However, you can also use professional help to file your annual taxes through a certified public accountant.
In this post, we will understand what is a certified public accountant and what are their roles and responsibilities.
What Does CPA Stand For? What Is CPA?
CPA stands for a certified public accountant that is licensed by the State Board of Accountancy.
To earn the prestige associated with a certified public accountant license, you must display ability and knowledge by meeting high educational standards by passing the exam for certified public accountant and gaining a certain amount of general accounting experience.
There are two prime characteristics required to become a certified public accountant, passing the Uniform CPA exam, and getting the state-required licensing based on the state that you are planning to practice in.
Apart from passing the exam and getting the state-required licensing, earning the Certified Public Accountant designation also requires a bachelor’s degree in finance, accounting, or business administration.
To complete the certification, the individuals are also required to complete 150 hours of education and have at least two years of experience in public accounting.
In addition, retaining the designation of a certified public accountant also requires completing a certain number of hours of continuing education each year.
What Are The Roles And Responsibilities Of A CPA?
Certified public accountants play important roles in planning and researching goals for individuals and businesses. Below are a few key responsibilities for a certified public accountant.
- Analyze transactions and prepare reports.
- Manage lead approvals and manage payables/receivables.
- Participate in budget processes.
- Regularly review accounting activities.
- Organize and update financial records (both digital and physical) as needed.
- Always keep senior managers informed of the company’s financial situation.
- Keep company financial information confidential.
- Keep up with industry developments and regulatory changes.
- Forecast revenue and analyze profit margins.
- Conduct regular detailed audits to ensure accuracy of financial, expenditure, and investment documents.
- Establish accounting policies and procedures.
- Contacts with tax accountants to monitor tax payments and returns.
What Is The Difference Between CPA and Accountant?
All certified public accountants are accountants, but not all accountants are certified, public accountants.
An accountant is any person who keeps and interprets financial records. However, certified public accountants are not limited to one industry or even one job function.
In addition to maintaining and interpreting financial records, CPAs may provide additional services as a result of knowledge gained through exam preparation and continuing professional education (CPE) requirements.
According to the American Institute of Certified Public Accountants, those who earn the CPA designation have five basic expert services.
- Advice on legal disputes
- Audit and review
- Financial planning
- Consulting services
- Tax preparation and consulting
Acquiring the Certified Public Accountant license would require proper planning, a lot of patience, and a significant amount of time.
Becoming a Certified Public Accountant also requires a commitment to continuing education even after you acquire your certification.
Certified Public Accountants are often required to complete 40 hours of continuing professional education (CPE) each year based on state government requirements.
As passing this exam and the commitment to continuing education could be tough, many in the finance and accounting fields consider this license to be one of the most popular designations available to accounting professionals.
Conclusion
Having a Certified Public Accountant title is one of the most prestigious designations a professional can earn.
As Certified Public Accountants earn more than accountants as they provide many services that an accountant may not be able to provide.
Hence many companies and businesses hire a Certified Public Accountant for their financial assistance.
