What does a CPA do?

TABLE OF CONTENTS

1. The CPAs and what they do
2. CPAs Main Roles and Duties
3. 8 CPA Skills You need to have
4. How to Become a Certified Public Accountant
5. CPAs and the CPA exam—other facts
6. Career Opportunities for Certified Public Accountants
7. Salary Outlook
8. Conclusion
9. FAQs

THE CPA’S AND WHAT THEY DO

The old joke: What does a CPA do? Solve a problem you didn’t know you had and don’t understand. If you’re majoring in accounting and even considering other courses related to the field, you probably have been told that you have the potential to have a CPA license. Why a license?

A CPA is different from an accountant. Anyone, who performs any kind of accounting function, even those without degrees can call themselves an accountant. Being a CPA, however, is a professional designation you earn through education, experience, and licensing. A professional has exceptional CPA skills that make them thoroughly knowledgeable in everything, from financial statements to tax preparation, and so on.

Furthermore, while a certified public accountant is an accountant, not all accountants are CPAs. Certified public accountants can work in different settings and perform various job duties. The job specifics change depending on the organization they work for as well as the organization’s objectives and goals.

CPA’s Main Roles and Duties

Regardless of the specifics of their position, the common job duties for certified public accountants include the following:

• Record Keeping. Certified public accountants, armed with impressive accounting skills, manage financial record keeping either independently or on a team of other professionals.
• Reports. Most CPAs serve as a financial expert and a liaison to the upper management team of an organization. Often, CPAs create financial reports and present them to company leaders and stakeholders.
• Tax Oversight. Numerous certified public accountants prepare and file taxes for the company they work for. Moreover, they may also represent it in interactions with the IRS if required. The IRS only allows lawyers, enrolled agents, and CPAs to directly represent clients.
• Forecasts. Some certified public accountants assist the organization’s leadership with financial forecasting. They could provide quarterly or yearly profit projections or help with capital investments.
• Audits. CPA skills also enable CPAs to do internal audits of the firm’s finances to ensure accurate record keeping and that all the money that comes into the business and leaves it is accounted for.
• Compliance. Certified public accountants help organizations ensure regulatory compliance. Moreover, they’re also updated on the processes and procedures in the accounting department to reflect regulatory changes. They should also stay updated with industry rules, regulations, and trends.

8 CPA SKILLS YOU NEED TO HAVE

Certain skills are common among successful certified public accountants.

1. Technical Skills
Certified public accountants should have immeasurable technical knowledge to do their jobs effectively. The technical skills could include accounting software, like tax preparation software such as Drake Tax software and TurboTax, and QuickBooks among others. New technical skills like statistical analysis, Python and R programming, data mining, and regression are also important for modern accountants to have.

2. Organizational Skills
Aside from accounting skills, a CPA should also possess good organizational skills to organize documents, prepare accurate reports, and keep tabs on deadlines important for audits, tax returns, and many more. Often, CPAs have several projects at once, thus having organizational skills is a must.

3. Critical Thinking
The great part of being a CPA is being able to see the big picture and think critically. Furthermore, certified public accountants should be able to analyze and evaluate data, and put it into context to provide reliable and meaningful advice.

4. Problem Solving
Another important part of being a certified public accountant is to resolve problems and/or bottlenecks. CPAs are responsible for finding solutions to problems and developing strategies to address the hurdles that clients may have with their business practices and taxes.

5. Attention to Detail
CPA skills include having a keen attention to detail. Precision and accuracy should always be maintained in your work. Keep in mind that every part of your job has financial consequences for the client, thus, accuracy is paramount. Consider for instance, the company could lose money without realizing it if the accountant adds up incorrect figures on the balance sheet. Incorrect reporting could also lead to having to pay fines.

6. Good Communication Skills
CPAs should clearly and effectively communicate with others, both verbally and in writing. This is an essential skill for any CPA working with colleagues, dealing with clients directly, or managing employees.

7. Good Business Sense
Understanding how a business operates is critical when working as a CPA in any industry vertical. A certified public accountant should comprehend the basic business principles and strategies to advise management on how their decisions could impact the financial status of the organization.

8. Analytical Thinking
When it pertains to analyzing data and finding patterns, some people are naturally good. This particular skill of a CPA could be very beneficial and help spot issues with financial processes or records faster than just reading the books line-by-line.

HOW TO BECOME A CERTIFIED PUBLIC ACCOUNTANT

Earning a degree is the first path to becoming a certified public accountant. You also need to pass the CPA licensure exam and accomplish continuing education. The education requirements could vary from one state to another. In general, 150 semester hours of college credit is required to be eligible to tax the exam.

You have to take 30 additional hours of coursework more than your bachelor’s degree. This could mean taking additional college classes, a double major, or earning a master’s degree. Furthermore, there are undergraduate and graduate programs in accounting that provide the basic foundation to meet the requirements for licensure.

These programs are introduction to financial accounting, taxation, and auditing topics at individual and corporate levels. Additionally, they provide an opportunity to gain experience using industry-standard software and computer applications. Another option is an online accounting degree program that offers flexibility and convenience, especially when working full-time while still studying.

Pass the Certified Public Accountant Exam

Each state has its specific requirements for eligibility to take the CPA Exam. Most states require a bachelor’s degree as well as 150 hours of post-high school education. Some states require candidates to be at least 18-21 years old, while some may require a candidate to be a US citizen or a permanent resident.

Acquire Experience

To take the CPA exam, you need to have years of experience, which could differ from state to state. Nevertheless, most require at least two years working in public accounting. Some states accept other experience, which include working in an industry or government. Generally, however, you need more years of such experience.

Get Licensure

Certified public accountants are licensed by their state boards of accountancy. Check out the Board of Accountancy in your state to be clear on what you have to do. Nonetheless, for most states, you need:

• To meet the education requirements
• Pass the CPA exam
• Meet the experience requirements
• Complete the CPA ethics exam

Numerous states have passed the Uniform Accountancy Act (UAA) versions, which has helped in creating more consistency in licensing across the United States.

Continuous Education

As a CPA, you are generally required to complete a Continuing Professional Education (CPE) every two years. The two main CPE categories include:

• Programs: Formal Courses
• Self-Study: Taking an online course or reading journal articles

Keep in mind, however, that states have different CPE requirements and deadlines. Some have different number of hours requirements and accept different kinds of education.

CPA and the CPA Exam—Other Facts

• Taking all 4 parts of the computer-based exam could cost an average of $1,000.00.
• Self-study courses could range from $1,300 to $3,000.
• Most states require 150 semester hours before you can sit for the exam.
• Veterans may qualify for expense reimbursement.
• The certified public accountant exam dates as far back as April 1896.

CAREER OPPORTUNITIES FOR CERTIFIED PUBLIC ACCOUNTANTS

The diverse CPA skills and technical skills you gain as a professional open the door to numerous career options. Around 70 percent of certified public accountants work in private firms, with CPAs serving in many organizations big and small across various industry verticals, such as the following:

Big, International Accounting and Tax Firms
Often, these firms have offices all over the country and across the globe. Moreover, they provide different services, like financial consulting, tax advice, and auditing.

Big Four Accounting Firms
The four biggest professional services networks in the world are PricewaterhouseCoopers (PwC), Deloitte, KPMG, and Ernst & Young. These firms offer audit, taxation, management consulting, assurance actuarial, legal, and corporate finance services to businesses and organizations.

Medium Organizations
These organizations mostly are regional. They could have offices in several states or one area of the country. Moreover, they provide the same services as big firms, but they are typically smaller in scale and usually have smaller clients.

Smaller Firms
These smaller service providers are usually in local accounting and tend to focus on smaller businesses in their area. If a small company needs an audit or tax advice, they often seek the services of a small firm.

Industry and business accountant
A business and industry accountant are another career option for certified public accountants. Business and industry accountants work in organizations of all sizes in different areas, including management accounting, financial analysis, financial accounting and reporting, and treasury/cash management.
Certified public accountants also work in other sectors, such as:

• Non-profit organizations
• State, federal, and local government units
• The education field also offers a lot of opportunities in teaching and research

Salary Outlook
The Bureau of Labor Statistics projects a median annual wage for all accountants as well as auditors, including CPAs to be as much as $120,000 per annum. Furthermore, it’s projected to grow by 7 percent by 2030. According to the BLS data, CPAs with 1-2 years of experience could expect to earn around $60,000-$70,000 per year. 3-5 years are mid-level and could take home an average salary of $75,000 to $90,000 annually. Those with more than six years of practice receive around $90,000 to $120,000 or more, depending on factors, like industry, specialization, and location.

CONCLUSION

You can be an always be an accountant without being a certified public accountant. However, earning a certified public accountant license adds considerable value to your credentials. Furthermore, it opens doors to career advancement and the potential to reach the highest salary range possible in your profession.

FAQs

1.Do I need a Review Course?

Ans. Although not mandatory, most CPA aspirants find review courses a big help. The courses offer practice questions, structured learning, and simulations that closely resemble the actual CPA exam.

2.Is the CPA Exam very difficult?

Ans. The CPA exam is known to be very challenging. Candidates must demonstrate not only knowledge but the ability to apply it in the real-world as well. Study strategies and the right preparation make it manageable.

3.How long does the exam preparation take?

Ans. The preparation time varies depending on one’s study habits, background, and others. On average, one has to spend 300 to 400 hours studying for the entire exam. Some may spend more time on challenging sections, such as the FAR.

4.18-Month Rule—what is it?

Ans. This requires candidates to pass all the exam sections within 18 months. The clock begins to tick upon passing the first section. If you fail to pass the remaining sections within this time frame, the passing score of the first section will expire and you need to retake it.

5.What’s the best study strategy for the exam?

Ans. It’s essential to have a well-structured study plan. Divide the material into manageable chunks, review previous sections regularly, and focus on one section at a time. Other key components include time management and practice exams.

6.When will I receive my exam scores?

Ans. Release dates of the score are posted by the American Institute of CPAs or AICPA and usually occur in waves. Scored typically are released within a couple of weeks after the end of a testing window. However, this could vary depending on when you take the CPA exam.

7.What to do if I fail a section?

Ans. In case you fail a section, you can retake it in the next testing window. Make sure to review your performance and determine the areas for improvement before you attempt the section again. Don’t forget that the 18-month rule still applies.