Define: Certified Public Accountant

A Certified Public Accountant (CPA) is a professional accountant who has met the education, experience, and examination requirements set by the state board of accountancy. CPAs are licenced to provide a wide range of accounting services, including financial statement audits, tax preparation, and consulting.

To become a CPA, you typically need to complete a bachelor’s degree in accounting or a related field, meet the specific educational requirements set by your state board of accountancy, gain relevant work experience, and pass the Uniform CPA Examination. Each state has its own requirements, so it’s important to check with your state board for specific details.

CPAs can provide a variety of services, including financial statement audits, tax planning and preparation, forensic accounting, management consulting, and financial planning. They can also assist with business valuations, estate planning, and risk management.

While it is not mandatory to hire a CPA to file your taxes, many individuals and businesses choose to do so because of the complex nature of tax laws and regulations. A CPA can help ensure that your tax returns are accurate, maximise your deductions, and minimise your tax liability.

The cost of hiring a CPA can vary depending on factors such as the complexity of the services required, the size of the firm, and the location. Some CPAs charge an hourly rate, while others may offer fixed fees for specific services. It’s best to discuss the fees upfront with your CPA to avoid any surprises.

Yes, CPAs are authorised to represent clients in IRS audits and other tax-related matters. They can communicate with the IRS on your behalf, help gather the necessary documentation, and provide guidance throughout the audit process.

Yes, CPAs can provide valuable assistance with financial planning. They can help you develop a budget, set financial goals, analyse investment options, and create a comprehensive financial plan to achieve your objectives. CPAs can also provide advice on retirement planning, college savings, and estate planning.

While all CPAs are accountants, not all accountants are CPAs. The main difference is that CPAs have met specific education, experience, and examination requirements set by the state board of accountancy to obtain their licence. CPAs also have a broader scope of practice and can provide additional services, such as financial statement audits and representing clients in IRS matters.

Yes, CPAs can provide valuable assistance when starting a business. They can help with entity selection, business plan development, financial projections, and obtaining necessary licences and permits. CPAs can also provide ongoing accounting and tax services to ensure your business remains compliant and financially healthy.

The frequency of consulting with a CPA depends on your specific needs and circumstances. Some individuals and businesses prefer to meet with their CPA on a quarterly or annual basis for tax planning and financial reviews. Others may require more frequent consultations for ongoing accounting and business advisory services. It’s best to discuss your needs with a CPA to determine the appropriate frequency of consultations.