What Is a CPA? And What does a CPA do?

What Is a CPA? And What does a CPA do?

  18 Apr 2024  

Accounting plays a crucial role in managing a company. There are taxes to estimate each quarter, invoices to pay, and accounts receivable to collect.

 However, a Certified Public Accountant (CPA) can help businesses manage payroll, sales tax, insurance, and other accounting. Also, it ensures they are making a profit.

Read this blog at the end to learn precisely What is a CPA?and what does CPA do?

What is a CPA?

CPAs are tax experts who can file your company’s taxes. They also provide crucial financial advice and help your company save money. Despite having degrees in accounting, CPAs are different from regular accountants in terms of certification.

However, CPAs hold state licenses with ethical standards after passing the demanding Uniform CPA Exam. This exam measures one’s knowledge of tax law and standard accounting procedures. 

Moreover, They risk losing their license if found guilty of fraud, carelessness, or ethics infractions. To keep their license, they must enrol in professional education courses. Furthermore, CPAs have limitless rights to negotiate with the IRS on your behalf.

What does a CPA do?

Like most accountants, CPAs handle various accounting, auditing, tax, and consulting tasks for multiple entities, such as corporations, small businesses, non-profit organizations, governments, and individuals.

After earning your CPA license, you can file SEC reports and create financial statements for your clients. You must be a CPA to write and submit reports by SEC standards.

You will also represent clients before the IRS to help them resolve their tax issues. The IRS restricts direct client representation to CPAs, attorneys, enrolled agents, enrolled actuaries, and enrolled retirement plan agents.

As a certified public accountant, you can provide financial and tax advice to people and companies across various industries. One may opt to focus on a specific field, like taxation, forensic services, or employment in the medical field. 

Alternatively, you may concentrate on various accounting services based on your chosen professional path.

As an accountant, your job duties may vary based on business size, experience, and industry, but you’ll likely perform various tasks.

  • Financial Management Roles
  • Maintaining financial records and documents.
  • We are preparing tax returns for various entities.
  • I am consulting with management on financial matters.
  • We are identifying and improving internal processes.
  • We are conducting forensic audits.
  • We advise on financial risk in new projects, mergers, retirement planning, etc.

What’s the average cost of hiring a CPA?

The average hourly wage for CPAs is $40However; this may not cover specific fees for services and consultations. 

So, understanding your business needs before meeting with a CPA helps determine their billing and costs. 

Hence, Itemizing costs helps evaluate the CPA’s potential for your organization and the benefits of outsourcing certain services.

Estimating the exact cost of hiring a cpa can take time and effort. It’s crucial to be aware of the usual costs and fees. Before you meet with a CPA, review the following usual expenses:

  • Hourly rates
  • Paperwork fees
  • Other fees and services
  • Administrative fees