Certified Public Accountants, or CPAs, are highly trained professionals who work with a business's finances, whether as a public or a corporate accountant. CPAs are licensed professionals required to pass the AICPA exam, which sets standards for CPAs industry-wide.
What Does A CPA Do?
CPAs cover various roles and responsibilities, from advising, accounting, and auditing. They advise a business's board and committees about internal and external controls on money, plan budgets, and draft financial statements. They help oversee a business's accounting departments, helping minimize tax liabilities and keep an accurate entries ledger. They help audit a business's financial statements, ensuring they are truthful and accurate.
What are the CPA Requirements?
The AICPA (American Insitute of Certified Public Accountants) is the regulatory body in charge of issuing the CPA certification. The CPA exam includes the following:
- Financial Accounting and Reporting: This section covers how to publish financial statements for different types of businesses and abide by standards like GAAP (Generally Accepted Accounting Principles)
- Regulation: This section covers the ethics and responsibilities that CPAs should have when dealing with auditing, accounting, and financial reporting so they follow federal and state laws.
- Business Environment and Concepts: This section covers a business's structure, how they operate, how the surroundings affect its operations, and economic and financial management concepts.
In addition to the exam, the AICPA requires applicants to have at least 150 semester hours of education, whether at the undergraduate or graduate level. Lastly, states may have different requirements on citizenship, residency, social security numbers, and international students.
Difference Between a CPA and an Accountant
An accountant is not necessarily a CPA, but a CPA is an accountant. CPAs have a higher clearance than other accountants and are certified to audit financial statements reported to the Securities and Exchange Commission (SEC). In addition, CPAs represent clients when dealing with the Internal Revenue Service (IRS), advising clients, and helping submit financial documents to the IRS.
Conclusion
CPA’s are professionals who have to undergo the AICPA tests and requirements to obtain their certification as Certified Public Accountant. Once they gain this certification, they have certain privileges over the normal accountant, allowing them to do more important jobs such as auditing, management and advising that require a higher clearance.
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