“Behind every good business is a great accountant.” – Anonymous Accountants are the backbone of financial management in businesses and organizations. Practical accounting leads to superior financial statement turnouts. Without these fine folks, companies would drown in the ever-growing sea of their unaccounted financial transactions. Have you ever thought about how much you’d like to work with numbers? It might sound weird to the less mathematically inclined, but being a certified public accountant may be the very thing you are cut out for. No, let’s go a step further – the item you were born for! If this hit home for you, read on and discover the pathway to your dream.
Certified public accountant (CPA) is the title given to an accountant who has become qualified for the position after taking a licensure examination administered by a regulations board or an authorized institution.
Certified public accountants don’t automatically retain that title forever, though. They must maintain their qualifications to keep their licenses to work as professional accountants. Being a CPA, however, is not equivalent to being an accounting professional of every shade. An accountant can’t merely jump between being a consultant, financial advisor, auditor, etc. All of these titles require specific steps, certain experience, and, most importantly, certain training and/or study.
Many certified public accountants are busy at work in public accounting in different firms. While others never really enter public accounting, some have found their way into various industries, such as government agencies, education, manufacturingб and business companies, among others. In a nutshell, a CPA is an accountant, but not all accountants are CPAs.
What CPAs do
Generally, licensed accountants are what you might expect – they are responsible for keeping financial matters smooth and up-to-date. They are usually responsible for the accuracy of an organization’s financial health.
In public accounting, a public accountant can perform a variety of roles. Some of these roles include:
Auditing – public accountants conduct an official financial examination or audit of a company’s financial accounts and use the information to determine whether everything is accurate and following the standard principles and rules accounting requires.
Financial Planning – a balance sheet, income statement, and cash flow statement are some types of financial plans that CPAs prepare and plan.
Forensic Accounting – this service is provided by CPAs who can offer expert evidence of financial mismanagement/malversation that caused litigation within an organization or across other companies.
Tax Planning and Preparation – CPAs prepare taxes, predominantly the businesses’ income tax returns
CPAs in the industry, or those in different fields outside public accounting, also perform various services. To describe it another way, they can take crucial and precious roles in corporations or business entities. As it is often said that accounting is the language of business, accountants must have an excellent comprehension of sufficient financial flow and resource management.
CPA or Accountant?
As mentioned earlier in this very article, not all accountants are CPAs. Given this fact, there are some roles that accountants cannot perform, but that CPAs can.
Accountants (generally considered as those who practice accounting but are not certified) are not permitted to audit the financial reports of public institutions, and cannot even legally provide expert advice to companies. They are not approved to do so, and neither avoid it.
They also do not have the authority to sign and attest to income tax returns, which CPAs, on the other hand, are entitled to practice.
Regardless of whether the individual is an account or a CPA, accounting remains one of the most taxing jobs you could ever undertake (pun intended).
How to Become a CPA
While it’s music to our ears to hear someone’s name preceding the title, “Certified Public Accountant,” the journey to becoming a CPA, and even maintaining the title afterward, is not a walk in the park.
The first of many things you have to consider as an aspiring certified public accountant is studying a bachelor’s degree in accounting (finishing it is another story, however). The CPA exam is not limited to accounting-degree holders, though. But you do need to be qualified or deemed eligible to take the CPA examination.
Now, let’s get to the real meat. After earning your accounting degree, or any related degree for that matter, you will need to take the licensure examination for CPAs. In the United States, the American Institute of CPAs (AICPA) is the body that both administers and grades the exam. Out of a total score of 100, you need to get a minimum grade of 75 in all of the four components of the test.
Again, taking the exam sounds perfectly doable, but passing it is a whole other story. But if you successfully pass, you only need to comply with specific requirements and, in some cases, have a certain amount of experience as an accountant, and you’re good to go as a certified public accountant.
Money, time, and effort. These are the most significant prerequisites of earning that coveted title. The greatest of these is time. You have to invest time to review your lessons, retain concepts, and apply your knowledge to real-world tasks to make yourself a champion of an accountant.
But wait, there’s more! The story doesn’t end after getting certified as an accountant. You will have to undergo continuing professional education and other related endeavors to hold onto that title, as the regulations commission is committed to their mission of producing and retaining professionals with the utmost professionalism, competence, and adherence to the ever-changing accounting rules.
CPA (Concluding Part, Alright?)
Regarded as the protectors of public interest, CPAs play a crucial role in maintaining the integrity and reliability of financial reporting in all industries, as well as the public accounting realm. They are and will remain some of the most invaluable and intangible assets an institution can ever wish for when it comes to successful financial management.
Accountants should always remain loyal to their sworn professional and moral obligations as they continue providing their public service, or if found guilty of any violation or negligence, they will quickly find themselves losing their license to practice accounting.
Nonetheless, accountants continue to do this taxing job without losing their balance (double pun intended!).