Certified Public Accountant (CPA) in many English-speaking countries is the name for professional accountants. The CPA in the U.S. is a credential to provide the state with accounting services. It is granted to work in that state by each of the 50 states. However, nearly every state (49 out of 50) has passed laws on mobility to allow CPAs from other states to practice in their state. State licensing requirements vary, but the minimum standard requirements include completing the Uniform Certified Public Accountant Test, 150 university semester units, and one year of accounting-related experience.
It is also necessary to maintain a license to continue professional education (CPE). Individuals who have been awarded the CPA but have not fulfilled the required CPE or have requested a conversion to inactive status may use the designation "CPA Inactive" or an equivalent phrase in many states. In most U.S. states, only CPAs are legally able to provide financial statement attestation (including auditing) opinions. The American Institute of Certified Public Accountants and their national CPA societies are affiliates of many CPAs.
State laws vary widely regarding whether a non-CPA is even allowed to use the title "accountant." For example, Texas prohibits the use of the designations "accountant" and "auditor" by a person not certified as a Texas CPA, unless that person is a CPA in another state, is a non-resident of Texas, and otherwise meets the requirements for practice in Texas by out-of-state CPA firms and practitioners.
CPAs perform an important function related to insurance services. Financial audit services are the most commonly performed insurance services where CPAs testify to the reasonableness of reporting, the protection from material errors, and conformity to the relevant generally accepted accounting principles (GAAP) in financial statements.
CPAs can also be employed within corporations (termed "the private sector" or "industry") in finance or operations positions such as financial analyst, finance manager, controller, chief financial officer (CFO), or chief executive officer (CEO). These CPAs do not provide services directly to the public.
CPAs also have a place in the preparation of income tax returns. Most small to medium-sized businesses have a tax department as well as an audit department. CPAs may represent taxpayers in matters before the Internal Revenue Service (IRS) together with attorneys and registered agents. While the IRS regulates tax representation practice, it does not have the authority to regulate tax return preparers.
The licensing requirements for certified public accountants fall within the board's authority in the state where a CPA is practicing. Only the state-regulating agency which issues the license of a CPA may take disciplinary action that affects the license of the applicant to practice. A CPA can lose his license if he is convicted of a crime or faces a formal complaint of ethics violation, gross negligence or fraud.
The Board for Accountancy of each state sets the standards to become a CPA. Although the qualifications for state licensing differ, you usually have to complete a four-year degree in an accounting program at an accredited college or university, pass the Uniform CPA test, and have licensed public accounting experience. After CPAs are licensed, the regulatory agency of each state governs conduct in accordance with the rules and laws defined by the state and expects CPAs to comply.
Violating common accounting practices is a serious offense and a CPA found guilty by the State Board for Accountancy of professional malpractice or a breach of ethics risks losing its license to practice. A CPA can lose his license if he fails to file an income tax return, files a fraudulent return or is convicted of a felony offense that is punishable by at least one year in prison. CPAs employed by agencies of the federal government may face disciplinary actions imposed by the Securities and Exchange Commission and other agencies of government. Federal law gives these agencies the right to discipline their practicing CPAs.