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What does a CPA do?

Becoming a Certified Public Accountant (CPA) gives an accountant higher standing in the eyes of business contacts, professional peers, regulators, and clients alike. This is because a CPA has met minimum education requirements, passed a rigorous four-part exam, and agreed to abide by a code of ethics.

The CPA designation is the most highly-sought after and versatile credential for accountants, according to the 2013 Robert Half Report on Accounting and Finance.

Public Accounting – What Can A CPA Do That Other Accountants Cannot?

Public accounting encompasses a wide range of accounting, auditing, tax, and consulting tasks for corporations, small businesses, non-profit organizations, governments, and individuals. Any qualified public accountant can do most of these tasks; however, a CPA can do two things that an accountant without a CPA license cannot:

  1. Prepare audited or reviewed financial statements and file a report with the Securities and Exchange Commission (SEC). All public companies must file audited financial statements with the SEC.
  2. Represent clients in front of the Internal Revenue Service. (However, a non-CPA who is an attorney, enrolled agent, enrolled retirement plan agent, or enrolled actuary can also represent clients.)

Also, most states limit non-CPA ownership of CPA firms to 49 percent; although a few states (New York and Delaware are notable examples) require that CPA firms be 100 percent CPA-owned.

CPA Firms – What Does a CPA do When Working for an Accounting Firm?

CPAs at CPA firms typically work in one of three areas:

  1. Tax services: These services include preparing and filing federal, state, and local tax returns and working with organizations and individuals during the year to minimize their tax obligations. In case of an IRS audit or questions by state and local tax authorities, a CPA firm can represent their clients.
  2. Audit/assurance services: Assurance services are independent professional services that improve the quality or context of both financial and nonfinancial information for decision makers. Auditing is an objective evaluation of financial and economic information to make sure it is correct and meets criteria such as generally accepted accounting principles (GAAP).
  3. Management services: These services provide assistance with supervising and managing an organization’s or individual’s day-to-day activities and providing strategic and long-range planning. Such services may include cash management, budgeting, and financial planning; preparing financial statements; insurance coordination and risk management; investment guidance; and estate planning.
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CPAs in Other Career Settings

Many businesses, especially large corporations, also look for CPAs to fill accounting positions, especially higher level and management positions. CPAs may work in areas such as financial accounting and reporting, management accounting, tax accounting, and internal auditing.

CPAs also work for government agencies, performing financial, performance, and compliance audits of government agencies and of companies who do business with the government. Another role for CPAs is with law enforcement agencies, helping to investigate financial crimes or other crimes that leave a financial trail.

CPAs may also follow career paths in non-profit organizations or academia, or they may start their own business.