Many businesses that are required to have a financial statement audit or review will need a CPA to perform these services and issue the required reports. The required years of experience you need to take the CPA Exam vary from state to state, but most call for at least two years working in public accounting. Some states will accept other experiences, such as working in government or industry, but you will generally need more years of such experience. The AICPA requires that all CPA designation holders adhere to the Code of Professional Conduct, which lays out the ethical standards CPAs must adhere to. CPAs can work with individuals and businesses alike, and can complete a wide variety of financial and tax tasks.
As an individual, you need a CPA for complicated tax returns and to help and represent you if the IRS is auditing you. In general, you must have 150 extra hours of either undergraduate or graduate education. You have to have from six months to two years of experience working in public accounting, depending on the state you live in. After that you sit for a four-part exam, each part requiring four hours to complete. The four parts of the CPA exam are attestation and auditing, financial accounting and reporting, regulation and business environment and concepts. CPAs also have to complete 40 hours of continuing education requirements each year and conform to strict ethics requirements as stated by the AICPA.
Taxes and Regulations
To become a CPA, you’ll need a bachelor’s degree in accounting, which typically encompasses four years of coursework. You will also need to complete a college course for chartered professional accountants and gain the required professional experience before becoming certified as a CPA. Depending on the region where you plan to become certified, this could take two years or 30 months. cpa vs accountant A CPA is a certified public accountant who has met specific state and education licensing requirements and passed the CPA exam; as such, it’s a highly sought-after accounting designation. Bureau of Labor Statistics (BLS), Accountants and Auditors as of May 2021, retrieved on May 16, 2023. Due to COVID-19, data from 2020 and 2021 may be atypical compared to prior years.
Be advised, however, that when you’re using accounting software alone, you won’t get the input of advice from a trained CPA. Licensed CPAs can help the business plan tax strategies to comply with tax laws and save money where possible. They can also advise clients regarding money management, taxes and investments, as well as the proper preparation of business documentation, such as profit-and-loss statements.
Chartered Accountant vs. CPA: Overlap and Differences
A business owner can technically do the accounting steps by themselves, but this may take more time than it is worth, taking attention away from other, higher-level tasks. If you’re not sure if now is the right time to invest, we recommend considering the value of your time and the cost of a CPA before making a final decision. Having a CPA may be more cost-effective and will help with tax savings and business planning.
