Certified public accountants (CPAs) provide a broad range of financial services to small businesses. These services include preparation of financial statements and tax returns, providing advice on various aspects of business (operations, management, etc.), and assisting in the development and installation of effective accounting systems.
Unlike large corporate enterprises, small business owners may not need continuous accounting services. Still, small business owners need to ensure that their enterprise operates in accordance with the complexities of modern finance, and that they have an informed understanding of the business's financial health in order to ensure that they can make sound business decisions. Many entrepreneurs and business owners turn to CPAs for help in these areas. For a small business, financial mismanagement can spell failure, so choosing and using the services of a CPA are critical to business success.
The CPA has a comprehensive educational background. Each candidate must attend a four-year program in accounting at an accredited institution. A CPA must also pass a standard test for competency in the field. The CPA exam covers four main areas: Law and Professional Responsibility; Auditing Procedures; Accounting and Reporting (taxation and accounting); and Financial Accounting and Reporting. This exam is administered in every state by a state board of accounting.
Individual state boards also set up state regulations for professional licensing standards. This often means that CPAs are required to have professional experience. Each state has requirements that are peculiar to the state, so small business owners should contact their state board of accounting if they have any question about a CPA's qualifications.
There are several organizations for CPAs which also provide information and educate the public on the role of the CPA. The major national organization is the American Institute of Certified Public Accountants (AICPA). Its goals are to provide members with resources and information and to promote public awareness about the CPA profession. The AICPA sets a code of professional standards which serve as guidelines for CPAs in conduct and professional responsibility.
CPAs provide financial services to the general public—which can encompass both private citizens and business enterprises—rather than to one single company. They can act individually or as members of a public accounting firm. A CPA may provide service in one or more areas in which they have been trained, including the following:
CPAs often specialize in specific areas of the accounting practice, such as auditing and accounting, tax law, or management advisory. They may also specialize in certain industry areas, such as retail, health care, or restaurant businesses.
Entrepreneurs seeking a CPA should look for the following:
Once a CPA has been selected, entrepreneurs should prepare to do some footwork to make the relationship a valuable one. The business owner should be prepared to keep accurate records, including invoices, payments, and amounts spent on business-related expenses. A little bookkeeping goes a long way to improving the service a CPA can provide.
Murray, Thomas J. "Choosing Your Accountant." LI Business News. May 12, 2000.
"Net Not Always the Best for Choosing Advisors." LI Business News. October 23, 1998.
Shapiro, Leslie. "Future Services of Accountants—an AICPA Perspective." National Public Accountant . January/February 1997.