Definition
 

A Certified Public Accountant (CPA) is a professional accountant who has passed the CPA examination and met specific state licensing requirements, allowing them to provide a range of accounting services to the public.

Description

The audit is the greatest degree of assurance service that a CPA provides, and it is designed to provide the user confidence in the correctness of financial accounts.

The CPA follows methods to acquire "reasonable assurance" (high but not absolute) that the financial statements are free of substantial misrepresentation.

During an audit, a CPA must comprehend a company's internal controls and evaluate fraud risk. The CPA must also verify the financial statements' quantities and disclosures by acquiring audit evidence by inquiry, physical inspection, observation, third-party confirmations, examination, analytical methods, and other procedures.

When executing an audit engagement, the CPA must decide whether his or her independence has been compromised. If the CPA's independence is compromised, he or she cannot conduct the audit engagement.

The CPA will issue a formal report expressing an opinion on whether the financial statements are presented fairly in all material elements, in accordance with the appropriate financial reporting frameworks. In addition, the CPA must report any substantial or material deficiencies in the organisation's internal control system discovered during the audit. 

Importance of Certified Public Accountant-CPA Certification
 

Here are 5 pointers on the importance of a Certified Public Accountant (CPA) certification:

1. Increased Earning Potential & Job Security: CPAs are highly sought-after professionals who command substantial pay. On average, CPAs earn much more than non-CPAs [source: Indeed, Glassdoor]. The qualification also prepares you for professional growth and leadership positions in accounting firms or the corporate world.
2. Competitive Advantage in the Job Market:  The CPA designation sets you apart. It indicates your dedication to the profession, thorough understanding of accounting concepts and rules, and adherence to ethical norms. This can be a game changer when looking for work, especially in competitive areas.
3. Expanded Career Opportunities:  A CPA qualification opens access to various job opportunities. You may work in public accounting, corporate finance, internal audits, forensic accounting, or consultancy. It also allows you to specialise in taxation or financial analysis, broadening your job opportunities.
4. Global Recognition & Credibility:  The CPA designation is well-acknowledged around the world. If you ever consider working globally, a CPA certification will demonstrate your qualifications and make the transition easier. It also helps you build credibility with clients, employers, and financial professionals.
5. Commitment to Continuous Learning & Professional Development:  Keeping your CPA licence needs continual education. This keeps you current on the newest accounting standards, tax rules, and industry trends. This ongoing learning helps you maintain your abilities sharp and reflects your commitment to the field.

How to become a certified public accountant?

Here are the steps to become a CPA. It is the same as becoming a Chartered Account in India. 

Step 1: Earn a Bachelor's Degree

You must possess a bachelor's degree for CPA and 150 school credit hours. Although it is advised that you are not required to major in accounting or business, If you major in another topic, you must finish a certain number of accounting-related credits as determined by your state's accounting board.

Step 2: Consider Graduate School

A master's degree may improve your chances of passing the CPA exam. According to the CPA Journal, first-time exam takers with master's degrees had significantly greater pass percentages than those with only a bachelor's. In 2019, 58.3% of first-time graduate-level test takers received passing ratings. Meanwhile, bachelor's degree holders passed at only 48.8%.

Step 3: Pass the CPA Examination

All US jurisdictions require candidates to pass the American Institute of Certified Public Accountants (AICPA) CPA test. The test is divided into four parts. Most states allow test takers 18 months to complete the other three sections after passing the first.

Step 4: Obtain Your Licence

The post-examination process for gaining CPA licensing differs by state. Many jurisdictions require accountants who pass the CPA test to have at least one year of professional experience. Some state accounting boards may have specific competence areas, such as auditing.

Step 5: Renew and Maintain Licensure

Most states require CPAs to renew their licences every 1-2 years. Continuing education is generally part of the renewal criteria. Many jurisdictions require continuing education programs to include a specific percentage of professional ethics curriculum.

Trends that can affect the Certified Public Accountant

Some of the trends that can affect the Certified Public Accountant:

• Technological Advancements: Integrating automation, artificial intelligence, and data analytics into accounting operations may alter the skills and services required by CPAs, affecting demand for traditional services.
• Regulatory Changes: Evolving regulatory frameworks, including tax laws, financial reporting standards, and compliance requirements, may increase demand for CPAs with particular knowledge of navigating complicated regulatory environments.
• Globalisation: As business operations and cross-border transactions become more globalised, there may be a growing demand for CPAs with international accounting knowledge and experience in various regulatory regimes.
• Shift in Business Models: As business operations and cross-border transactions become more globalised, there may be a growing demand for CPAs with international accounting knowledge and experience in various regulatory regimes.

Example
 

A Certified Public Accountant (CPA), like Sarah, offers complete financial services to businesses and individuals. For example, Sarah helps small businesses manage their tax requirements, prepare financial statements, and provide strategic financial guidance to encourage growth. 

She also assists clients with navigating complex tax regulations, maximising deductions, and planning for their financial futures. Sarah uses her experience and qualifications to assure her clients' financial well-being and regulatory compliance.

FAQ
 

What does it mean to be CPA-qualified?

Being CPA-qualified indicates that you have completed the necessary educational curriculum and passed the Uniform CPA Examination. To become completely qualified, they must also complete any additional experience and licensing requirements set by their jurisdiction.

What are the CPA certification requirements?

CPA certification requirements vary by jurisdiction, but often involve earning a bachelor's degree in accounting or a related discipline, passing the Uniform CPA Examination, and completing a specified number of professional work experience hours under the supervision of a certified CPA. In order to keep their certification, applicants may also be required to complete continuing education courses.

How does CPA certification benefit accountants?

CPA certification increases an accountant's credibility, opens up new job prospects, and enables them to provide a broader range of services to clients. It also indicates dedication to expertise and quality in accounting and finance.