What Is a CPA? What does a Certified Public Accountant Do?

Accounting is often regarded as the "language of business" as it entails analyzing, decoding and communicating information about a business enterprise's finances and operations to stakeholders or interested parties.

What is a CPA in Accounting?


The title CPA or Certified Public Accountant is earned by qualified accountants who meet a set of rigorous requirements. Apart from completing a degree in accounting, and securing professional work experience in public accounting in an accountancy firm, a CPA candidate also must write and pass the Uniform CPA Examination conducted by the professional body. The exam is developed and graded by the American Institute of CPAs (AICPA). However, certification is done by state, district and county Boards of Accountancy.

Accounting is very important to any business because the financial information, as prepared by CPAs, allows business owners to make informed business decisions. These decisions assist companies become very successful. After the candidate has been granted practicing license, that is the only time the person can use the designation and address himself as a CPA.

What Do I Have To Do To Become A CPA?


The requirements for licensing include education, examination and experience. Before you start the process, you must have completed a degree program in accounting at a college/university.

Becoming a Certified Public Accountant (CPA) gives an accountant more standing before his business associates, fellow professionals, regulators, and clients. This is because a CPA has met minimum education requirements, passed a rigid four-part exam, and accepted to obey the code of ethics guiding the accounting profession.

After passing the CPA Exam, an accountant becomes CPA certified. However, this is not a license to practice. There are other educational and professional work experience requirements to get a license to practice, although it vary from state to state. As soon as you get your CPA license to practice as a public accountant, you will need to take part in annual continuing professional education courses to keep your license.

According to the 2013 Robert Half Report on Accounting and Finance, the CPA qualification is the most highly sought after and adaptable credential for accountants in the U.S.

Are CPAs And Accountants The Same Thing?


The answer can be yes and no at the same time. All CPAs professionals are accountants, but not all accountants are Certified Public Accountants (CPAs). The main differences between a regular accountant and CPA are education, experience, and opportunity. Becoming a CPA is a demanding task, but very reachable. To become a Certified Public Accountant, there are education and experience requirements you need to complete, and a general CPA Examination that you must sit for and pass. Receiving your CPA certification distinguishes you from other professionals – the benefits include increased trust, more opportunities, and greater financial reward.

As a matter of fact, anyone who does any type of accounting function - even without a degree in accountancy - can call themselves an accountant. However, a CPA is an accountant who has earned a professional qualification through education, work experience and certifications.

Public Accounting – What Can A CPA Do That Other Accountants Can't?


Public accounting features a variety of accounting, auditing, tax, and consulting functions for agencies, small businesses, non-profit corporations, governments, and people. Any qualified public accountant can carry out most of those duties; however, there are two things a CPA can do that an non-CPA licensed accountant can't do:

  1. Prepare audited or reviewed financial statements and document a report with the Securities and Exchange Commission (SEC). All public organizations should report audited financial statements with the SEC.
  2. Represent customers before the Internal Revenue Service. (But, a non-CPA who's a lawyer, enrolled agent, enrolled retirement plan agent, or enrolled actuary can also constitute customers.)

Furthermore, most states limit non-CPA ownership of CPA companies to forty-nine percent; even though some states (New York and Delaware are popular examples) require that CPA companies be 100 percent CPA-owned.

What Does A CPA Do Exactly?


CPAs typically do the following functions:

1. Tax services


These services encompass preparing and filing federal, state, and local tax returns and running with agencies and people in the course of the year to limit their tax duties. In the event of an IRS audit or questions by state and local tax authorities, a CPA company can represent their customers.

2. Audit/assurance services


Assurance services are independent expert offerings that enhance the quality or context of both financial and non-financial information for decision makers. Auditing is a goal assessment of financial and monetary information to ensure it's miles accurate and meets criteria like Generally Accepted Accounting Principles (GAAP).

3. Management services


Management services offer help with supervising and managing a company’s or individual’s daily activities and providing strategic and long-term planning. Such services can include cash management, budgeting and financial planning; preparing financial statements; insurance coordination and risk management; investment guidance; and estate planning.

Career Opportunities Available To CPAs


From the smallest enterprise to the biggest government enterprise, every business needs the offerings of a CPA. Their credentials are exceedingly rated. To a potential employer, this indicates a high moral standards in addition to measurable experience, training, and skills. CPAs work mainly in public accounting, agencies and enterprise (company accounting), government, non-profit making groups, and educational sector. Other include;
  1. Tax Accountant
  2. Financial Consultant
  3. Controller
  4. Auditor
  5. Senior Manager of Finance
  6. Chief Financial Officer (CFO)

Conclusion


It is one thing to become an accountant, it's another to become a certified public accountant (CPA). As an ordinary accountant, there are limits to what you can achieve in your career. 

This is why I encourage that you register, sit for the examination and pass your papers. There are many rewards for becoming a CPA. As a matter of fact, according to the Bureau of Labor Statistics, getting certification in a specific accounting field, such as the CPA, greatly improves your chances of securing a job.