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What is a CERTIFIED PUBLIC ACCOUNTANT?
What is a Certified Public Accountant (CPA)?
CPAs are often known as:
• Problem solvers
• Communicators
• Advisors
• Educators
• Technology specialists
A CPA -- Certified Public Accountant -- is a financial professional who speaks the language of business, who is generally a member of a professional body of high standing, such as the American Institute of Certified Public Accountants (AICPA) or New Jersey Society of Certified Public Accountants (NJSCPA).
A CPA is a true professional who has acquired excellent professional training and a qualification that inspires immense respect and confidence. CPA training has long been recognized as an excellent foundation for a career. The analytical and business skills which CPAs develop, their experience and knowledge of different businesses, and the ability to assess the financial implications give them a leading edge in the complex business world.
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 an accounting 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 record keeping and reporting matters for the public. However, the term CPA, in sum, means to most people much more than these parts of certified 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.
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.
CPAs do many things for businesses and individuals. Basically they analyze how money is used by businesses, non-profit organizations, governments and individuals. If it's about money it starts with accounting.
CPAs are valued professionals who are running major corporations, starting exciting entrepreneurial endeavors and developing their own practices that handle much more than tax returns.
Where do CPAs work?
CPAs work in public accounting, business & industry, government and education. Within these areas, CPAs generally specialize in what they do.
CPAs are many things. They are chief financial officers for Fortune 500 companies and advisors to small neighborhood businesses. They work for public accounting firms, both small and large. They are well-respected strategic business advisors and decision-makers. They act as consultants on many issues, including taxes and accounting.
In order to become a CPA, there are several requirements you need to fulfill.
As a CPA, you may find yourself
• Working for a large public accounting firm in a major metropolitan city
• Teaching accounting courses at your local college or university
• Operating your own CPA practice from your home
• Providing consulting work for businesses such as large corporations like Coca-Cola® to small businesses like your local computer store
• Showing a nonprofit organization like the Red Cross how to run efficiently
• Working as an FBI agent investigating fraud
What do CPAs do?
Certified Public Accountants (CPAs) hold titles such as "Managing Partner," "Chief Executive Officer" and "Controller." They are outgoing, creative and analytical. They are male, female and come from every ethnic and cultural background. You can choose to work in large or small firms or in any type of business imaginable. You can also work for government agencies like the FBI, in non-profit organizations like the Red Cross, or you could even own your own company. You may be found in a client's office, on business trips, at lunch meetings and at charitable functions.
The reason for this diversity is simple:
CPAs are the trusted professionals who enable people and organizations to shape their future. Combining insight with integrity, CPAs deliver value by:
• Communicating the total picture with clarity and objectivity;
• Translating complex information into critical knowledge;
• Anticipating and creating opportunities;
• Designing pathways that transform vision into reality.
If you think accountants and other business advisors are alike, think again. Those who are able to call themselves "CPAs" have met stringent education and experience requirements, must perform their work in accordance with high-quality technical and professional standards and adhere to a strict code of professional ethics. Individuals work hard to obtain the "CPA" designation, and they are committed to working even harder to deliver the value that it conveys.
CPA vs. Accountant
The CPA Credential: Not All Accountants Are CPAs
While most people use the terms accountant and CPA interchangeably, there is a big difference. The CPA credential carries enormous weight in business and financial circles. CPAs are considered some of business' most trusted advisers, according to a recent survey conducted by the American Institute of CPAs. Specifically, when small business owners were asked how often they rely on outside business counsel, half said that they rely on their CPA "always" or "often" ranking just slightly behind one's spouse or family member.
This trust is not surprising considering the strict requirements to enter and stay in the profession. Achieving CPA status takes intelligence, ethics, integrity and lifelong commitment. First, candidates must make it through some of the toughest business courses at their college or university and then pass the CPA exam.
The CPA exam was developed in the early 1900s to ensure the competence of CPAs entering the field, much as the bar exam evaluates lawyers and the medical boards test doctors. Today, it maintains that goal and is continually revised to meet the changing demands of the profession. For example, candidates are now being tested on their writing skills. The significant change was made because the marketplace is demanding much more of CPAs in today's complex business environment.
The exam is not the only requirement to be a CPA. CPAs also are required to follow a strict code of ethics as well as perform within the high standards of the profession. Every three years they must complete 120 hours of continuing professional education to keep up with the new rules and regulations in the financial, accounting and business world.
As the profession has evolved, so have the services CPAs provide.
CPAs are no longer simply number crunchers and tax preparers, but business and financial strategists who help chart the paths of individuals and businesses. Individuals turn to their CPAs for tax and financial planning services, investment advice, estate planning and more. Businesses are tapping CPAs to not only manage finances and taxes, but also to determine profitable new product lines, seek creative financing opportunities, help diversify investments and provide a variety of other consulting and business services. As technological advances, globalization, new laws and regulations and marketplace competition continue to complicate financial and business decisions, CPAs will be called upon to analyze information, determine effective financial and business strategies and help individuals and businesses achieve profitability.
What are the requirements to become a CPA?
To become a CPA, you need to meet the requirements of the state or jurisdiction in which you wish to practice. These requirements, which vary from state to state, are established by law and administered by the state boards of accountancy.
To qualify for certification, you must:
Complete a program of study in accounting at a college/university (the AICPA recommends at least 150 semester hours of college to study to obtain the common body of knowledge for becoming a CPA.)
Pass the Uniform CPA Examination, which is developed and graded by the AICPA; and
Have a certain amount of professional work experience in public accounting (not all states require this).
The Computer-based Uniform CPA Examination is offered the first two months of each calendar quarter. The exam consists of four sections: Auditing and Attestation; Business Environment and Concepts; Financial Accounting and Reporting; and Regulation.
Once you have become a CPA, most states require you to take specified amounts of continuing professional education courses annually to retain your professional license to practice.
ACCOUNTANCY CONSULTANTS of New Jersey, LLC
Send E-Mail to: acnj.njcpa@verizon.net
Copyright © 2009 Joseph J. Gawalis Jr., MBA, CPA-NJ. All Rights Reserved