What Is a CPA (Certified Public Accountant)? Should I Hire One?

(June 2024)

What Is a CPA (Certified Public Accountant)? Should I Hire One?

In This Article

Are you looking for a professional who can handle your accounting and financial needs? If yes, you may have heard of the term CPA. But what exactly is a CPA and what do they do? How can you become a CPA or hire one? These are the questions you can anticipate their answers while reading this article. Read on to have a better understanding of the CPA profession and how it can help you or your business.

  1. What Is a  CPA?
  2. What Are the Requirements for Becoming a CPA?
  3. What Functions Does CPA Perform?
  4. What Are the Benefits of Hiring a CPA?
  5. When Do You Need to Hire One? 

1. What Is a  CPA?

Understand that a CPA (Certified Public Accountant) is a licensed accounting professional who has met the education, exam, and experience requirements that the State Board of Accountancy sets. If you are a CPA or hire one, your problem with accounting, auditing, tax, and consulting services to individuals, businesses, governments, and non-profit organizations becomes easy. Note that a CPA has to follow a code of ethics and professional standards that ensure the quality and integrity of his/her work.

2. What Are the Requirements for Becoming a CPA?

Do you wish to become a CPA? Be aware that becoming a CPA is not easy. You need a lot of dedication, hard work, and knowledge. Here are the requirements you need to meet to become.

 

  • Education: Have a bachelor’s degree or higher in accounting or a related field from an accredited college or university. You also need to complete a minimum number of credit hours in accounting and business courses, usually 150 hours.
  • Exam: Pass the Uniform CPA Examination, which is a four-part, computer-based test that covers the topics of auditing and attestation, business environment and concepts, financial accounting and reporting, and regulation. The American Institute of Certified Public Accountants (AICPA) and the National Association of State Boards of Accountancy (NASBA) are the bodies that conduct the exam. Keep in mind that the exam is very challenging and has a low pass rate, so you need to study hard and prepare well.
  • Experience: You need to have a minimum amount of work experience in accounting, auditing, tax, or consulting under the supervision of a licensed CPA. The amount and type of required experience depend on the state, but usually, it ranges from one to two years.

3. What Functions Does a CPA Perform?

Can you imagine that a CPA can perform many functions that can help you or your business with your accounting and financial needs? Some of the functions that a CPA can perform are:

 

  • Accounting: A CPA can help you record, analyze, and report your financial transactions and information. A CPA can also help you prepare and maintain your financial statements, such as income statements, balance sheets, and cash flow statements.
  • Auditing: You can verify and attest to the accuracy and reliability of your financial statements and information with the help of a CPA. You can even identify and correct any errors, fraud, or misstatements that may affect your financial performance and position. A CPA can also help you improve your internal controls and processes that ensure the quality and security of your financial data.
  • Tax: With the help of a CPA, you can plan, prepare, and file your tax returns and payments. Also, you can minimize your tax liability and maximize your tax benefits.
  • Consulting: A CPA can help you with various business-related matters, such as business formation, valuation, merger, acquisition, dissolution, restructuring, financing, budgeting, forecasting, analysis, strategy, management, and more.

4. What Are the Benefits of Hiring a CPA?

Hiring a CPA can bring you many benefits, such as:

  • Expertise: You get access to the knowledge, skills, and experience to handle your accounting and financial needs. You can stay updated with the latest developments and changes in the accounting and financial fields, which in turn equips you to make an informed decision.
  • Quality: A CPA helps you to deal with your financial challenges more professionally. You can access high-quality services that meet your expectations and needs.
  • Value: A CPA can add value to you or your business by helping you save time, money, and resources.

5. When Do You Need to Hire One?

You may need to hire a CPA in various situations and scenarios, such as:

  • Personal Tax Issues: If you have a complex or unusual tax situation, such as having multiple sources of income, owning a business, having foreign assets or income, having a large estate or inheritance, or being involved in a divorce or lawsuit, you may need to hire a CPA to help you with your tax planning, preparation, and filing.
  • Business Tax Issues: If you own or operate a business, you may need to hire a CPA to help you with your business tax matters, such as choosing the best business structure, filing the appropriate tax forms and schedules, claiming the applicable tax deductions and credits, paying the required tax estimates and withholdings, and reporting the correct tax information to the tax authorities.
  • Financial Transactions: Check if you involve yourself in any significant financial transactions, such as buying or selling a property, starting or closing a business, merging or acquiring another business, issuing or receiving a loan, or making or receiving a large donation, you may need to hire a CPA to help you with the accounting and tax implications of these transactions.
  • Legal Matters: If you have any legal matters, such as filing a lawsuit, defending a lawsuit, settling a dispute, or executing a contract, you may need to hire a CPA to help you with the financial aspects of these matters.

Recap

Remember that a CPA is a licensed accounting professional who can provide a wide range of accounting, auditing, tax, and consulting services to individuals, businesses, governments, and non-profit organizations. You may need to hire a CPA in various situations and scenarios, such as personal and business tax issues, financial transactions, and legal matters. If you are looking for a professional who can handle your accounting and financial needs, consider hiring a CPA. A CPA can be your trusted advisor and partner in your financial journey.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. . For comprehensive tax, legal or financial advice, always contact a qualified professional in your area. S’witty Kiwi assumes no liability for actions taken in reliance upon the information contained herein.

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