A CPA is a Certified Public Accountant. This designation is given to accountants who have met specific educational and experience requirements as defined by The American Institute of Certified Public Accountants (AICPA).
While all CPAs are accountants, not all accountants will have a CPA certification. So what exactly do CPAs do and what are they responsible for?
Prepare and Audit Financial Statements
When a business needs a professional to review their financial statements, CPAs play an instrumental role in preparing and auditing such statements. In auditing this financial information, CPAs provide lenders or investors in a business with the assurance they need to move forward.
If you want to ensure your spending habits are line with your business goals, an audit of your financial statements by a CPA can assist with this. CPAs can also detect problems or inconsistencies in financial statements that could be the result of fraud.
Help with Business Decisions
CPAs tend to be more experienced than regular accountants when it comes to working with businesses and providing financial guidance. For many people, CPAs are a vital part of not only running a business, but starting and selling one as well.
These certified professionals can assist with making sound decisions and save business owners time and money in financial errors. They can help set up and maintain a business by assisting with choosing the appropriate business entity, setting up accounting software, providing tax services, and even advice on loan options.
Assist with Tax Services
One of the services that comes to mind most when people think about CPAs is taxes. CPAs can help with taxes, especially for people who have more complicated tax returns or those who need a CPA to file taxes for their business.
CPAs can prepare tax returns and even advise clients on how to minimize the amount of taxes they owe every year. They can also organize financial information and statements in preparation for taxes and assist with extensions for filing taxes.
Provide Consulting for Individuals and Companies
CPAs also provide consulting services for both individuals and businesses. CPAs are required to have a certain amount of education and experience in order to be certified, making them more adept than a regular accountant to assist with decision making.
They can help make decisions when it comes to taxes, recommend ways an organization can increase its profits, and advise individuals about wise investments or economic trends that might be relevant to them.
CPAs can also analyze your financial statements to determine the cost-efficiency of your business practices. Some CPAs even specialize in specific areas such as financial planning and acquisitions and mergers.
Of course, CPAs can also conduct general accounting services including bookkeeping and payroll for companies who want the assurance of a certified professional instead of a regular accountant for their accounting needs.
Should You Hire a CPA?
Hiring a CPA is a decision that’s based on a variety of factors, such as what you need one for and how useful their skills and experience would be to your individual needs or your business goals. For many, a CPA provides the peace of mind a traditional accountant can’t.