What is CPA? What does a Certified Public Accountant do?

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What is CPA? What does a Certified Public Accountant do?

Introduction

What is CPA? You might come across this question many times. Everyone has a vague idea of what the certification is all about. But we don’t know entirely what the Certified Public Accountant job is. Well, if you are aspiring to become a CPA, then this article is for you. Here, we will cover in detail what a CPA is, the role of a CPA, and the critical differences between CPAs of different countries and states!

Before applying for any CPA course, one must understand it and what is included in it. In layman’s language, CPAs or Certified Public Accountants are professionals with expertise in accounting and finance. A Certified public accountant has more credibility and expertise than a non-certified one. A candidate must pass the CPA exam to be licensed as a CPA. 

But before applying for the exam, specific requirements must be fulfilled. A candidate must have a bachelor’s degree and complete 150 credit hours of general higher education to sit for the exam. Unlike accountants, CPAs perform audits for different companies. They also prepare tax returns for various businesses after reviewing the companies’ financial statements. 

The US CPA certification is accredited by the official body called AICPA (American Institute of CPAs). It is the world’s largest body of accountancy based in the USA. 

If you wonder why an accountant and a CPA have the same duties, this is not the case. The critical difference between an accountant and a CPA is that the latter can write audited financial statements like income statements or balance sheets. An accountant cannot do so. 

Now, you must be wondering what does a CPA do? Well, this is the next valid question after knowing what CPA is! So, here are some duties of a CPA.

Duties of a Certified Public Accountant (CPA)

A Certified Public Accountant has the following duties:

1- Examining Financial Records 

CPA analyzes the financial records, prepares tax returns, creates budget plans, and conducts client audits. The CPAs ensure that the financial records and statements comply with local, state, and federal laws. They provide that they abide by the rules and regulations of the government. 

2- Calculating Tax Returns 

Certified Public Accountants calculate tax returns and help the business in the long run. They calculate the total taxes owed and file forms to claim deductions, ensuring that clients make complete and on-time payments. 

3- Preparing Financial Documents

Another aspect to “What does a CPA do?” is that they are responsible for preparing various financial documents like tax returns, financial statements, budget reports, etc. By the looks of it, they create quarterly earnings to keep the business and accounting records to track specific expenses made by the company. Certified Professional Accountants ensure that the financial documents follow the procedures and standards. 

4- Conducting Forensic Examinations

One of the significant advantages of being a CPA is that they specialize in forensic accounting. They conduct audits and investigations to uncover monetary fraud, money laundering, and other crimes. These professionals analyze the financial documents of the company and find criminal activity. 

5- Making Financial Decisions

Many CPAs also provide financial advice to businesses as well as individuals. CPAs take on the job of analyzing financial statements, thereby making recommendations for improving operations and reducing tax liabilities. Also, a Certified Public Accountant may help the client plan their long-term financial goal, such as earning more, retirement, etc. 

6- Managing the Financial Information 

CPAs also manage financial information for the company and clients. They review the accounts and identify issues with the company. The CPAs also provide tax management services for individuals and corporations.  

So, these are the duties of the CPA and answer to “What does a CPA do?”. The job of a CPA is hectic as compared to bookkeepers or accountants. Let us look at what CPA is and its critical skills.    

Hard Skills possessed by a CPA

What is CPA? Knowing the skills possessed by a CPA is one way of knowing what a CPA is! Here are some skills required by a CPA. Have a look!

1- Analytical Skills

CPAs are required to have strong analytical and critical thinking skills that help in the evaluation of financial data and documents. With these skills, the CPAs can identify the issues and provide solutions. 

2- Computer Skills

Another skill is the computer skill, which is possessed by a CPA. This skill includes daily computer use and proficiency in specialized software like Excel, QuickBook, Sage, etc. 

3- Mathematical Skills

A CPA is an expert in mathematics; they leverage mathematics to interpret data and financial figures. This skill helps in calculating averages, percentages, mark-up changes, etc. Analyzing data also comes under mathematical skills. 

4- Business Knowledge

A CPA possesses knowledge of how the business operates. They advise employers and clients to make them earn profits, resulting in business growth. 

Soft Skills possessed by a CPA

Upon knowing the hard skills, let us look at some soft skills to understand what CPA is. Have a look!  

1- Communication Skills 

CPAs are good at communication skills. They act as a link between top management and the team. A CPA is responsible for listening to clients, managers, coworkers, etc., and resolving their issues.  

2- Organizational Skills

CPAs work with many clients and many kinds of companies under strict deadlines. For this, they require organizational skills that help them to keep track of their work and safeguard the confidential information of the client/ company. 

3- Problem-Solving Skills 

CPAs can experience many issues that exist in the company. To resolve these problems, they have strong problem-solving skills. With these skills, they identify the issues and offer valuable opinions and possible solutions. 

To know what a Certified Public Accountant is, one needs to know the skills and duties of a CPA. A CPA has many duties and responsibilities to fulfil. 

What is CPA License?

A Certified Public Accountant license is the highest document that a CPA can get. Upon getting a CPA license, a candidate can provide several services to people. Gaining a CPA license is an essential career step for professionals who want to leverage their reputation and services. A CPA license depicts that a person possesses the necessary skills to serve the people.

A CPA license is a solid foundation that helps in rapid career advancement. A candidate should verify the eligibility criteria and sit for the CPA exam to get a CPA license. After one passes the exam and receives the certification, they are eligible to get the CPA license. Thus, a person must take that difficult CPA exam to acquire a CPA license. However, you can always join the CPA course from top institutes like NorthStar Academy to ease the difficulty and crack the CPA exam in one go.

What is CPA Exam?

What is CPA? This question has many layers to it. The CPA exam is administered by AICPA, an official body that expands as the American Institute of Certified Public Accountants. The CPA exam is a 16-hour exam that is divided into four sections. The sections are Auditing & Attestation (AUD), Business Environment & Concepts (BEC), Financial Accounting & Reporting (FAR), and Regulation (REG). Among these four sections, Financial Accounting & Reporting is considered the most challenging section.

All four exams consist of MCQs, Task-based simulations, and comprehensive writing. A minimum score of 75 is required to qualify for this exam. To sit for the CPA exam, the candidate must have a bachelor’s degree, and they must complete a credit score of 150.

Candidates are advised to fulfill the requirements and prepare well before giving the CPA exam. 

What is CPA Course? 

The CPA exam has a comprehensive course that covers various accounting topics like law, analytics, auditing, taxation, regulatory frameworks, ethics, financial planning, etc. A Certified Public Accountant should possess complete knowledge of accounts and finance, helping companies and clients resolve financial issues. 

A candidate with graduation or equivalent degree can apply for the CPA course. Many states in the US demand at least two years of work experience under a senior CPA. To apply for the CPA course, one needs to fulfill these requirements. 

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Now, several CPA institutes like NorthStar Academy provide their expertise in the field and assist candidates in cracking the exam with ease. NSA has a much higher success rate and includes guidance from the top mentors in its comprehensive and well-organized CPA course. Candidates need to choose wisely and get admitted to the leading institutions that will help them clear the exam on the first attempt! 

What is CPA Canada?

Chartered Professional Accountants of Canada is a national organization representing the Canadian accounting profession. CPA Canada conducts research on business issues and supports setting accounts, audits, and assurance standards as per non-profit organizations and governments. 

CPA Canada emphasizes improving financial literacy in Canada. It is essential to note that CPA is a globally accredited course. CPAs can work on all levels of the accountancy field in every part of the world. As far as Canada is concerned, they can be a part of CPA Canada upon fulfilling the requirements. Moreover, CPA USAs can earn CPA Canada without any additional exams. 

Difference between US CPA & CPA Canada    

Before knowing in detail what CPA is, it is essential to note that CPA India is nothing but the CPA USA certification provided in India by AICPA. CPA is a globally acknowledged course that differs a bit from CPA Canada. So, let us look at the differences between CPA USA and CPA Canada.

S.NO. Particulars CPA USA CPA Canada
1. What is CPA Definition CPA USA is defined as an approved public accounting license provided to the candidates who have completed the state-board education and have gained the experience requirements to sit for the CPA exam. CPA Canada is a Canada-approved professional accounting credential that is for candidates who have enrolled in CPA and have passed the necessary requirements of education and experience.
2. Administering body AICPA, NASBA, and the US state board of accountancy are the administrating bodies. CPA Canada and regional CPA bodies administer CPA Canada.
3. Eligibility Criteria To become a CPA USA, one needs a master’s degree, 1-2 years of work experience, and a 150 credit score. A candidate needs to enroll for CPA PEP and pass CF along with having professional experience.
4. Exam Structure CPA USA has four sections. CPA Canada includes only one exam, which is conducted over three days.
5. CPA Exam pattern CPA USA is in the form of MCQs, Task-based simulations & comprehensive section. CPA Canada includes case studies.
6. Requirement for Professional Education Not required Required to complete CPA PEP and must be a graduate.
7. Time Taken Pass all four sections in the time frame of 18 months. Finish CPA PEP in two years’ time and qualify for CFE.
8. Exam Fee $1000 $1500
9. Is it expensive? CPA USA is not very expensive compared to CPA Canada. CPA Canada is expensive, i.e., $1300 for every module of CPA PEP is paid by the candidate.
10. Average Annual Salary $120,000 $142,000

FAQ’s

1.  Is CPA a course or a degree? 

CPA is a course that stretches up to 18 months. One must have a bachelor’s degree to apply for the course and take the exam. 

2. What does CPA stand for?

CPA stands for Certified Public Accountant. It is a professional credential that is globally accredited. A candidate taking the CPA course can work globally, stabilizing their career growth and getting numerous career opportunities in the future.

3. How many years is a CPA course?

The CPA course ranges from 7 to 18 months. But if a candidate applies to NorthStar Academy, this time frame gets reduced to 6-10 months. Apply to the academy soon and access exclusive study material that will help you crack the exam in one go! 

4. Is CPA better than CA?

CPA is better than CA. The period to complete a CPA is less, and the salary is relatively high. A CPA earns 20% higher as compared to other people. So, yes! CPA is better than CA. 

5. Who is eligible for CPA? 

To become a CPA, one has to fulfill some requirements. The candidates must have a bachelor’s degree, and a credit score of 150 must also be completed. Moreover, at least 1-2 years of work experience is required.

Conclusion

Answering briefly “what is CPA?”, it is a high-level, professional degree that can help in boosting career growth and provide the candidate with numerous career opportunities. CPA certification courses help in efficient preparation for the CPA exam. Many candidates enroll in CPA Courses.

Now, if we talk about the CPA institutes, then nothing beats NorthStar Academy (NSA). We at NSA provide complete and updated study material, interactive sessions, and recorded classes that help the candidates prepare for the exam.

The academy will significantly help you as it is a budget-friendly certification course. The person using it is offered various bundle discounts as well! What’s more? Well, the academy provides updated and organized books and study resources.

There is no better time than now to apply for the CPA course and become a Certified Public Accountant. Apply to NorthStar Academy and make way for your career growth in the future. Feel free to contact us at +918147470707 for any queries; we would be happy to help you. 

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