Certified Public Accountant (CPA)
What is a Certified Public Accountant (CPA)?
A Certified Public Accountant (CPA) is an accounting and tax professional who has passed the Uniform CPA examination and has also met additional state certification and experience requirements. A CPA may independently serve the public (individuals or businesses) in accounting- and tax-related matters, or serve businesses internally or through a specialized accounting firm.
How Does a Certified Public Accountant (CPA) Work?
The CPA designation is granted by the American Institute of Certified Public Accountants in order to maintain industry-wide, professional standards.
To become a CPA, a person must: A) obtain a Bachelor's degree from an accredited university or college, B) take an additional 30 college semester hours of high-level accounting and ethics courses (potentially more if you did not major in Accounting), C) pass the Uniform CPA Examination, and D) obtain experience working full-time under a licensed CPA (up to 2 years, depending on your state).
Once a person becomes a CPA, they can specialize in one specific area of finance or a wide range of services, including:
- Corporate Finance
- Corporate Business
- Financial Accounting
- Financial Analysis
- Financial Planning
- Forensic Accounting
- Income Tax
- Information Technology
- Management Consulting
- Performance Management
- Tax Preparation and Planning
- Venture Capital
CPAs are required to complete a minimum number of continuing professional education (CPE) courses in order to retain the CPA designation.
Other countries have different designations for the CPA qualification. The Canadian equivalent to a CPA is a Chartered(CA).
Why Does a Certified Public Accountant (CPA) Matter?
The CPA examination is developed and graded by the American Institute of Certified Public Accountants. The exam has four sections: auditing and attestation, financial accounting and reporting, regulation, and business environment and concepts.
Nearly 14 hours long in total, the CPA examination also includes a writing skills exercise, multiple choice questions and case studies.
What Can a CPA do that an Accountant Can't?
For example, when a corporation releases its quarterly and annual financial statements (10-K statements) to investors and the public, the corporation is required by the SEC to have a licensed CPA review and audit the financial information to ensure its accuracy and analyze if the corporation is in stable financial condition.
If the company is facing liquidity problems (or nearing bankpruptcy), a CPA may report in the 10-K that the corporation is operating as a "going concern" with an explanation of how the company plans to continue operating.
While accountants may contribute to and prepare a company's financial reports, only a CPA can audit the company's financial statement for release to the public.
Why We Use CPAs to Verify Our Content
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