What is CPA?
The acronym “CPA” stands for Certified Public Accountant. A CPA is a designation for accounting professionals who have passed the Uniform Certified Public Accountant Examination and have met additional state education and experience requirements for certification. The CPA designation is highly respected in the field of accounting and finance, and it signifies that the individual possesses expertise in a range of accounting and financial practices, including but not limited to auditing, taxation, financial reporting, and consultancy. In the United States, CPAs are licensed and regulated by state boards of accountancy.
Being a CPA often allows an individual to perform functions that a non-certified accountant may not be permitted to do, such as filing a report with the Securities and Exchange Commission (SEC). CPAs are also held to a code of ethics and are required to complete continuing education to maintain their certification.
CPA (Certified Public Accountant) Job Description
Main Duties
- Financial Auditing: Conduct financial audits to ensure compliance with accounting standards and regulations.
- Tax Planning and Filing: Provide tax planning services and prepare federal and state tax returns for individuals and businesses.
- Consulting: Offer consulting services in areas like business planning, risk management, and financial forecasting.
- Financial Reporting: Prepare financial statements, such as balance sheets and income statements, for organizations and businesses.
- Regulatory Compliance: Ensure that financial practices are in line with all statutory legislation and regulations.
- Management Accounting: Assist businesses in interpreting and using accounting data for managerial decisions.
- Forensic Accounting: Investigate financial discrepancies and fraud.
- Budgeting and Planning: Assist businesses in planning future budgets and financial planning.
- Internal Controls: Assess and improve internal financial systems and controls within organizations.
- Payroll Services: Manage or advise on employee compensation and benefits systems.
- Investment Advice: Provide financial and investment planning services, often as a consultant.
Education and Qualifications Needed
- Bachelor’s Degree: In accounting or a related field.
- CPA Examination: Must pass the Uniform Certified Public Accountant Examination.
- State License: State licensure is also required, which often includes meeting additional experience requirements and sometimes an ethics exam.
- Continuing Education: CPAs are often required to complete a certain number of continuing education hours per year.
- Optional: Master’s degree in accounting or finance for specialized roles or career advancement.
Experience Needed
- Internship: An accounting internship during college is often beneficial.
- Entry-level Positions: Some firms require 1-2 years of experience in a related role for junior positions.
- Senior Roles: Multiple years (often 5+) of specialized experience required for senior or managerial roles.
Place in the Organization
- Junior CPAs often report to senior CPAs or accounting managers.
- May work in specialized departments like auditing, tax, or consulting.
- Senior CPAs may take on managerial roles, supervising junior staff and reporting to top executives or business owners.
Average Salary Expected
The average salary for a CPA can vary widely depending on experience, location, and the nature of the employer. As of my last update in 2021, in the United States:
- Entry-level CPA: $50,000 – $60,000 per year
- Mid-career CPA: $65,000 – $90,000 per year
- Senior CPA/Managerial roles: $100,000 – $150,000 per year
- Partners in accounting firms: $150,000 – $500,000+ per year
Please note that these are general figures and can change based on various factors.