The Certified Public Accountant (CPA) designation is awarded to licensed accounting professionals who are dedicated to serving the public interest. The CPA license is issued by each state’s Board of Accountancy. The American Institute of Certified Public Accountants (AICPA) offers resources to anyone interested in becoming licensed public accountants.

Who is a certified public accountant?

There are some accountants that do not have the CPA designation. Those who have distinguished themselves by acquiring CPA certifications by demonstrating their dedication, experience, and expertise stand out from the rest of the crowd.

Accounting professionals need to have extensive coursework under their belts (at least 150 hours), pass a tough four-part exam, and meet experience requirements in order to get the CPA certificate.

The CPA test consists of three writing sections, 276 multiple-choice questions, and 28 simulations based on tasks. These can be broken down into four primary categories: auditing and attestation, financial accounting and reporting,  regulation, and business environment and concepts.

Candidates have a total of 16 hours to finish the exam, with each section allotting them a time limit of four hours. Candidates are given the freedom to select the order in which they want to take each individual section. Candidates have a time frame of 18 months to demonstrate that they have mastered all four parts of the examination. Different jurisdictions have different starting points for the 18-month time span.

What does a certified public accountant do

Depending on the specific role they perform in the profession, a CPA may be involved in one or more aspects of the accounting industry. CPAs have the option to focus on areas including taxation, forensic accounting, and personal financial planning.

CPAs are involved in accounting responsibilities such as creating reports that accurately reflect the business affairs of the individuals and companies that they assist.   Additionally, they are involved in the reporting and filing of tax returns for businesses as well as individual taxpayers. A CPA can provide people and businesses with guidance on the actions they should take to decrease their tax liability and enhance their profits.

CPAs offer businesses and other organizations all over the world tax, financial reporting, and advisory services in order to facilitate growth and success, as well as to aid in the formulation of strategic decisions. CPAs also provide these services in order to meet ethical and professional standards.

In addition to this, they are obligated to make a commitment to learning for the rest of their lives and to adhere to a demanding code of professional conduct that requires them to be competent, objective, honest, and independent. CPAs are also expected to uphold a high standard of ethics and comply with ongoing education obligations.

CPAs are highly sought after in a variety of fields because of the dependability, industry knowledge, and certifications that they possess. According to the American Institute of Certified Public Accountants (AICPA), the following five industries are among the most common ones for CPAs to find work in:

• Public accounting
• Business and industry
• Government
• Education
• Non-profit
• Self-employed

This is not, however, an exhaustive list. The CPA designation can open doors in virtually every sector of the economy.

Photo Credit: Accounting Blog

What are the duties of a certified public accountant?

Analyze Financial Records

In order to prepare tax returns, compile budget reports, and conduct audits for their clients, CPAs study their clients’ financial records. These accountants make sure that the laws and regulations governing the federal, state, and local levels are adhered to when it comes to financial records.

Calculate Tax Returns

Typically, public accountants will prepare tax returns for both businesses and individuals. They determine the entire amount of back taxes owing, complete the necessary paperwork to claim deductions, and monitor their clients’ payments to ensure that they are made in whole and on time.

Prepare Financial Documents

Accountants are responsible for putting together a wide variety of financial papers, such as tax returns, reports on budgets, and financial statements. In addition to this, they produce quarterly earnings reports for firms as well as accounting records to keep track of spending and profits. CPAs are responsible for ensuring compliance with reporting and procedural rules regarding financial documentation.

Conduct Forensic Examinations

Numerous CPAs offer guidance to people and companies on matters pertaining to financial management. CPAs may review financial papers in order to give suggestions for the enhancement of operations or the reduction of tax liabilities. Some certified public accountants offer their clients assistance in developing long-term financial strategies, such as those necessary for retirement.

Manage Financial Information

CPAs are required to successfully handle their clients’ financial information, which includes checking accounts to discover any inconsistencies that may exist. CPAs work with both individuals and businesses to handle their tax obligations.

What are the key hard skills for certified public accountants?

Analytical Skills

In order to assess financial data and paperwork, recognize problems, and offer solutions to clients and employers, CPAs need to have good critical thinking ability.

Computer Skills

Using a computer on a regular basis and being proficient in specialist software applications such as Excel, QuickBooks, and Sage are often required for the position of a CPA.

Mathematical Skills

Mathematical expertise is necessary for CPAs in order to interpret financial figures and data. Despite the fact that software frequently handles mathematical duties, public accountants are still need to have the ability to calculate averages, percentages, and changes in margin and mark-up.

Business Knowledge

CPAs are in a unique position to advise their clients and employers on strategic matters because they have a thorough understanding of how organizations function. CPAs who are also skilled in business may find themselves in a better position to succeed in their careers.

What are the key soft skills for certified public accountants?

Personal Skills

Since accounting is a service-oriented field, you will need to be able to collaborate well in groups as well as handle interactions with clients one-on-one. The capacity to effectively lead, motivate, and empower teams to achieve objectives that are obvious, specific, and measurable in a timely manner is essential to the success of any firm.

Communication Skills

Communication with customers, supervisors, and coworkers is required on a daily basis in CPA positions. These accountants need to have the ability to listen to the problems of their clients, provide technical information in a clear and straightforward manner, and discuss the results of their work in meetings and reports.

Organization Skills

CPAs deal with a large number of clients, a diverse range of financial paperwork, and stringent time constraints. These accountants have the ability to maintain track of their work and protect the sensitive information of their clients thanks to their strong organizational skills.

Problem-Solving Skills

Businesses and individual taxpayers alike are both susceptible to a wide variety of financial difficulties. CPAs that possess good problem-solving skills are able to recognize these challenges, provide insightful perspectives on them, and suggest potential solutions.

Attention to detail

Errors in bookkeeping and tax preparation can be extremely expensive for both customers and companies. Examining numbers, putting together data sets, and filling out financial paperwork all need a high level of attention to detail on the part of CPAs.

What is the Code of Ethics for certified public accountants?

CPAs are held to a very high standard of ethics in their professional conduct. It is a mandate of the American Institute of Certified Public Accountants (AICPA) that all individuals who have the CPA certification conform with the Code of Professional Conduct. This document specifies the ethical standards that CPAs are expected to uphold in their professional lives.

The Enron scandal is an example of how certified public accountants did not adhere to such a code, and it illustrates why such a code is necessary. It has been suggested that executives and CPAs working for the Arthur Andersen group participated in the use of accounting practices that violated both ethics and the law. CPAs are mandated by both federal and state laws to uphold their independence throughout the entirety of the auditing and reviewing processes they participate in. CPAs working for Arthur Andersen did not maintain their independence when providing consulting services for Enron. Instead, they provided both auditing and consulting services, which is a violation of the code of ethics for certified public accountants because it contradicts the nature of their profession.

The CPA certificate has gained prominence as a result of the Sarbanes-Oxley Act (SOX) of 2002, which was enacted in part in reaction to corporate financial scandals like the Enron scandal. 

Key Takeaways

• Certified public accountant (CPA) is a professional credential that can be earned by accountants who meet certain requirements.
• To become CPA, you are required to get a passing score on the challenging Uniform CPA Exam.
• A bachelor’s degree in business administration, finance, or accounting is required to become a CPA, in addition to the completion of 150 hours of required coursework.
• Having at least two years of experience working in public accounting is one of the other qualifications for the CPA designation.
• CPAs typically work in a variety of accounting roles, including those in public accounting and corporate accounting, as well as management roles such as controller and chief financial officer (CFO)

Would you prefer to listen to this article?