A Certified Public Accountant or CPA is a special type of accountant. Officially, it is the title of someone in the United States who has passed the Uniform Certified Public Accounting Examination and has met some additional state education and experience requirements to earn this certification. This test is grueling and requires more than 150 hours of special education.

But what does this mean for you as a small business owner? Do you need a CPA or a regular accountant or even a bookkeeper will be enough for your business?

Most people use the term CPA and accountant interchangeably, but there is a big difference. The CPA designation carries a lot of weight within the financial community and certainly within the accounting profession.

Services provided by certified public accountants

In public accounting, accounting services provided to a company for contract, a CPA certifies and warrants that the financial statements are fair and accurate and adhere to generally accepted accounting principles (GAAP). They also attest to the reasonableness of the disclosures and that the statements are free of “material misstatements.”

As an auditor, CPAs are required by professional standards and federal and state laws to maintain the independence of the entity for which they are performing an audit and review, often referred to as attestation.

A CPA may also work as a consultant, advising companies on acceptable business practices and making financial management recommendations. Typically, these consultants do not work as auditors for a company at the same time that they act as consultants.

As part of certification, a CPA must complete 40 hours of continuing professional education (CPE) each year to keep up with new rules and regulations in the world of finance, accounting, and business. This is proof of the high level of expectations of the accounting profession for a Certified Public Accountant.

Typically, a Certified Public Accountant will belong to a state association with the goal of keeping up with the accounting community and taking continuing education classes. Of course, tax laws change frequently, and any good CPA will spend time keeping abreast of changes in the financial areas. As a member of a local association, they have access to the latest ideas and rules in the area of ​​accounting.

Why you need a CPA

Even if it is for no other reason than tax planning, it is good to have the advice of an accountant. And in terms of business management and financial advice, access to a good accountant is highly desirable.

But does that mean you need a CPA?

In general, you can assume that anyone who has taken the time to become certified as a CPA and maintain that certification is in the higher levels of an accountant’s skill set. It’s a clear credibility booster to be a CPA. If your business can afford the best a CPA is worth the money.

But that means they’re better than a typical accountant. Of course not. But it does indicate a level of commitment worth considering. Certainly, if legal proceedings are required, the assurance of a CPA will carry more weight than a typical accountant. Again, a lot depends on the CPA’s reputation in the community as well. Certainly, an audit conducted by a CPA has an implicit level of credibility.

And CPAs do a lot more than audit these days. They provide general financial planning and consulting not only for small and large businesses, but also for estate planning, investments, and strategic planning.

So if you want to run your business at the highest level, you’ll certainly want to consider hiring a certified public accountant like those at Clearwater Accountants.