Why Use a CPA
Some people think that CPA is a fancy name for a bookkeeper, but CPAs have a much broader and deeper scope.
You can choose anyone to be your accountant. You can even do it yourself, as many people choose to do. After all, an accountant is simply someone who keeps, audits, and inspects the financial records of individuals or businesses and prepares their financial and tax reports.
So, what is a certified public accountant (CPA)? What makes a CPA better than an accountant who’s not certified? And why should you use a CPA to help manage your personal and business finances? We answer those questions here:
What Is a CPA?
A CPA is an accountant who has passed all parts of the CPA exam administered by the American Institute of Certified Public Accountants (AICPA) and fulfilled the education requirements of their state accounting regulatory agencies. In California, the CPA designation is reserved for accountants who have met the following requirements:
Completed 150 hours of college education, including a bachelor’s degree with a concentration in accounting. (We take a deeper dive into education requirements following this list.)
Passed the Uniform CPA Exam.
Licensed by the State Board of Accountancy.
Completed as many as 120 hours of continuing education over a three-year period.
Committed to following a strict code of professional ethics.
Peer reviewed for higher level work, such as audits.
In California, the educational requirements for obtaining a license to practice as a CPA include the following:
- 24 Semester units in accounting subjects: Accounting, Auditing, Financial Reporting, Financial Statement Analysis, External & Internal Reporting, and Taxation
- 24 Semester units in business-related subjects: Business Administration, Management, Communications, and Law; Economics; Finance; Marketing; Statistics; Mathematics; and Computer Science & Information Systems
- 20 Semester units in accounting study (or a Master of Accounting, Taxation, or Laws in Taxation degree): Additional accounting and business-related courses (including independent study); skills-based courses (for example, English, Communications, and Science); foreign language and cultural and ethnic studies; and industry-specific courses (such as Real Estate or Engineering)
- 10 Semester units in ethics study: Accounting Ethics, Professional Responsibilities, Business Leadership, Corporate Governance, Human Resource Management, Organizational Behavior, Corporate Social Responsibility, Fraud, and Business, Government & Society, including up to three semester units in general Philosophy, Religion, or Theology
Why Is a CPA the Better Choice?
Five factors make CPAs the better choice:
- Education/training
- Certification by the AICPA
- Oversight by the AICPA and the State Board of Accountancy
- Experience serving a variety of clients
- Commitment to ethical accounting and business practices
A CPA has a higher level of education and expertise in accounting and business and is held to much higher standards than non-certified accounting professionals such as bookkeepers and IRS-registered tax-preparers.
Why Use a CPA for Your Personal and Business Finances?
Some people think that CPA is a fancy name for a bookkeeper, but CPAs have a much broader and deeper scope. When you hire a CPA, you’re getting a highly knowledgeable and skilled financial and business advisor who has your back.
A CPA can help you manage your finances holistically. For example, instead of merely preparing your annual tax returns and telling you how much you owe, your CPA can help with tax planning — analyzing your financial situation to ensure that all elements of it work together in order to minimize your taxes, protect your assets, and build wealth for you, your family, and your heirs.
