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What is a CPA?A CPA is much more than its definition of Certified Public Accountant. The term certified refers to the licensing to carry on business as a CPA and meeting the standards as promulgated by the American Institute of CPAs and the various state societies. To be initially licensed, an individual must pass a rigorous examination, which is uniform among the states, and then obtain a certain amount of experience working for a firm which performs examinations of financial statements and renders a report upon them. The term public accountant refers to the role as an accountant, who handles recordkeeping and reporting matters for the public. However, the term CPA, in sum, means to most people much more than these parts of certifed and public accountant. A CPA is a very trusted advisor of both individuals and of businesses. CPAs are relied upon so much because of not only their keen analytical and decision-making skills but also their objectivity, integrity and dedication to service. Many CPAs provide services well beyond accounting, auditing and reporting. Some are business and management consulting, information technology consulting, tax planning and preparation, personal financial planning, valuation services, elder care services, and compliance. The consumer often expects a CPA to be proficient at many specializations, even those just indirectly related to the traditional role of an accountant. The CPA's role has been quickly expanding, and one leading CPA proposed that the term CPA more appropriately stand for Certified Professional Advisor. The CPA profession is currently grappling with how best to define the CPA in today's world and whether to change the moniker CPA. One preliminary recommendation of the AICPA for a new term to encompass CPAs worldwide has met with much criticism within the industry. Stay tuned for further developments. One thing is clear - the CPA is a very valued and trusted advisor and a professional who has not only kept up with the quickly changing world around us, but who has helped shape it. Why is it a good idea to get the help of a Certified Public Accountant?The answer depends largely on with whom the CPA is being compared? A CPA compared to an accountant who is not a CPA. CPAs are better qualified than accountants who are not CPAs because of the requirements for the CPA examination, experience, and continuing education. On the other hand, certain accounting, reporting, review, and auditing services can only provided by CPAs. A CPA compared to a professional advisor. CPAs, in general, are bred to be independent and objective, and have intense training and experience with certain decision-making skills including careful research and analysis. The CPA can provide a client with a perspective that is more balanced and measured, and seeing many angles can lead to creative breakthroughs. How is a CPA different from an accountant?A CPA is different from an accountant who is not a CPA in many important respects:
A CPA compared to doing it yourself.In many matters, you simply cannot do it yourself. It would take too long to acquire the necessary level of knowledge and skills. But in many matters, you might be able to do it alone - whether it is accounting and recordkeeping, or preparing income tax returns, or developing internal controls and procedures, or establishing a valuation, or starting or restructuring a business, or setting out personal financial plans or making financial decisions, or a thousand other money-related matters. But operating on your own, without guidance, is like putting an addition on your house without the help of an architect, or carpenter, or electrician, or plumber, or painter. You could learn to do the tasks, but probably not with as much skill as the experts, and the years necessary to acquire the knowledge and experience would make anticlimactic the completion of the task. Even if you could finish the house addition within enough time to enjoy it, it might not be built well enough to stand up over time. Also, two heads are always, well almost always, better than one. If you are a smart independent self-starter, try this approach - do all the research, lay the plans, assemble the team if others could be involved, and then call in the CPA to be quarterback, or at least your guide If you are an individual or a business and you need to choose a CPA, there are many guidelines which might be helpful. They fall into these categories: 1. Determine your needs and desires, immediate and narrow, and longer-term and broader and make an assessment of your own particular circumstances, quirks and preferences 2. Gather several candidates, using various methods such as (a) referrals from close associates (b) directories such as CPAdirectory.com (c) searches among information sources such as industry publications, articles, internet search engines, etc. 3. Match what you need and want from #1 with the candidates from #2 for an initial short list of candidates to interview. 4. Conduct interviews and use the article Choosing the Right CPA for guidance as to particular questions and attributes to consider. 5. Narrow the list based on subjective considerations such as chemistry, attitude, impressions, etc., and return to step #1 if not fully satisfied |
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