Do You Need A CPA? (Hiring The Right Accountant Part 3)

Some Summit Investor Coach clients have been confused about the meaning of the certified public accountant (CPA) designation. Business owners and high net worth individuals sometimes wonder if they need to hire a CPA when they need an accountant. Let me try to shed some light.

A CPA has a minimum level of education and experience and has taken tests to prove competency. Many situations, like an audit or business loan application, demand a CPA’s involvement. But other tasks like bookkeeping, preparation of tax returns or write-up work can be handled efficiently by a general accountant who doesn’t have the CPA designation.

Be careful here. The CPA title is only awarded to people who have passed a rigorous a two-day, nationally standardized test. Most states require CPAs to have at least a college degree or its equivalent. Several states also require post-graduate work. Some businesses and individuals will only work with a CPA. When in doubt, choose an accountant who holds the CPA designation.
On the Connecticut Certified Public Accountant Society website you’ll find lots of useful information. One helpful page includes a section on who needs a CPA. Here’s a summary of that section:

A CPA (Certified Public Accountant) is a personal financial planner, a management consultant, a management information specialist, a business consultant, and more.

CPAs act as advisers to individuals, businesses, financial institutions, nonprofit organizations, and government agencies on a wide range of financial matters. Today, many individuals turn to CPAs for help with both their tax preparation and personal financial planning.

Increasingly, people rely on CPAs for assistance in building college funds, planning for retirement, and creating estate plans.

Business owners and managers of various for-profit and nonprofit organizations have traditionally depended on CPAs for auditing services and advice on developing effective accounting systems, maximizing operating results, and resolving various management problems.

CPAs also serve in management at companies of all sizes. As corporate managers, they perform many of the same services that outside CPAs do. They also bring special expertise and insight to management issues, helping to reengineer company finance functions, structure transactions for the capital markets, manage employee benefit plans, and prepare and analyze financial and operational information for management decision-making.

Expertise In More Than Crunching Numbers
Do you own a company? Then look for an accountant who brings not only expertise in number crunching, but consulting and business planning. Potentially, the right accountant can be your company’s financial partner for life, with intimate knowledge of not only how you’re going to finance your next forklift, for instance, but also how you’re going to finance your daughter’s college education.

Hiring an accountant is a little like choosing a good friend. Take your time. Be thorough. Make sure you are a good match.  You’ll be sharing some confidential and critical information so you want an accountant you trust and respect. You can call me for more information at 203.453.1017.

In my next post we’ll discuss some of the many interview questions you can use when choosing among accountants. Please comment on this post below. What was helpful? What other questions do you have about hiring the right accountant?  Feel free to visit my website http://www.summitinvestorcoach.com or my blog. Or call me, Gene Offredi, CFP, RFC, your Summit Investor Coach, at 203.453.1017.