What is a Certified Public Accountant and What Does a CPA Do?
Certified public accountants have access to several different career paths and opportunities. This is what makes this certificate so famous. The other two career paths, however, include public accounting and accounting for the business.
Let’s look at both:
What Does a CPA Do in a Public Accounting Firm?
There are a variety of different jobs that a CPA performs at a CPA firm in the public accounting industry. Here are a few.
Auditing and Review
One of the main jobs in public accounting that a certified public accountant does is auditing company financial statements and giving an opinion on the accounts. Basically, the auditor is recognized as an unbiased third party who reviews and evaluates the management's prepared financial statements. Depending on the report, the CPA provides a Financial Statements opinion stating whether any material misstatements have been detected.
In the end, all public companies are required by the SEC to have their financial statements audited by a CPA firm before being issued to shareholders and the public.
Tax Preparation and Services
In the tax preparation industry, one of the most popular and well-known career paths for a CPA is. It involves handling all kinds of tax forms for customers, from property taxes to income taxes. This also involves counseling clients on how to arrange their affairs to reduce tax burdens on tactics and strategies.
CPAs are involved in many different types of consulting services to help their clients recognize business problems and more effectively run their operations. Many workshops include reviewing internal controls and identifying potential changes to the operations.
Forensic Accounting Services
All too often the employees or owners embezzle the company's money. Most of the time after the initial event embezzlement schemes are not caught until some time after. Uncovering a complex embezzlement scheme may take months or even years.
CPAs are often hired to search through financial records, determine whether money has been stolen, and disclose any suspected fraudulent activities.
Financial Planning and Business Valuation
CPAs are often involved in counseling clients about the best time to sell a company and how to move it to someone else. Companies also advise their customers during the evaluation process and planning phases of the tax implications of selling or moving a company. This is common in the planning of estates and successions.
While CPAs are not qualified to practice law, lawyers often use them as expert witnesses in court to identify and prove facts. This is usual in divorce proceedings, bankruptcies and mergers/acquisitions/splits between businesses.
What Can a CPA Do that an Accountant Can’t Do?
There are a bunch of different things that CPAs are legally allowed to do that a non-certified accountant is unable to do. Here are a few examples.
Non-certified accountants are not permitted to audit public companies, issue audit reports or letters of opinion or review the SEC's financial statements for public companies.
The IRS grants special privileges to certified public accountants that uncertified accountants do not obtain. A CPA is allowed to sign a customer's tax return as a paid preparer and represent the client before the IRS. Such privileges are also bestowed on licensed agents and lawyers.
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