A certified public accountant, commonly referred to as a CPA, is a professional accountant who has passed the CPA exam in one or more U.S. states. CPAs must also meet requirements related to education and work experience to become licensed by a state board.
The basic requirements of any state involve academics, an examination, and experience. The New York CPA requirements are:
- Academics: In New York, the requirement is 150 semester hours of academic credit from:
- An accounting program registered or accepted by the State Education Department (a Master’s degree in accounting from such a program will be deemed as meeting New York’s 150 semester hour education requirements), OR
- 15 years of public accounting experience acceptable to the State Board for Public Accountancy.
- Exam: You must pass all four parts of a CPA exam with a minimum score of 75.
- Experience: One year of work experience.
CPA licenses are similar to attorney licenses. CPAs are usually only licensed in one state, but they can become licensed in additional states depending on reciprocity regulations between states.
In the world of accounting, the CPA designation is the most sought after credential. The CPA designation signals that the accountant is high-caliber and has a great deal of real-world experience and education.
There are many professional roles a CPA can perform with varying responsibilities and duties. Most CPA roles fall under one of two categories: public accounting and industry (private) accounting.
CPAs can hold several vital roles in a public accounting firm.
Auditing and Review
Perhaps the most commonly recognized CPA role is auditing. CPAs audit client financial statements and deliver their professional opinion of the material they review. Auditors serve as unbiased third parties who are trusted to make truthful observations. Often, auditors decide whether the organization in question has misrepresented or mishandled funds, especially when there are shareholders at stake.
The Security and Exchange Commission (SEC) requires all public companies to hire a CPA firm to audit their financial statements before issuing the statements to shareholders and the public.
Tax Preparation Services
Tax preparation is an enormous industry that supports millions of taxpayers. CPAs involved with tax preparation work prepare a wide variety of client tax forms, including income taxes, payroll taxes, and sales taxes.
Tax accountants also advise clients on tactics and strategies for structuring their assets and operations to minimize tax burdens.
Financial planners advise clients about their business dealings and investment strategies. Often, these professionals help people plan their estates and retirements. They also assist organizations with substantial assets to determine how best to diversify and invest earnings.
Forensic Accounting Services
Forensic accounting is a specialized field that focuses on investigative accounting. When an employee or business owner is suspected of embezzlement, for example, a forensic accountant can unravel the evidence.
These accountants dig through thousands of pages of financial records to identify and track down missing money. Forensic accountants play a significant role in court proceedings related to financial crimes by providing testimony about their discoveries and professional opinions.
CPAs are often hired by attorneys to provide expert testimony in the courtroom. CPAs testify in divorce proceedings, bankruptcies, and business mergers and acquisitions.
CPAs provide consulting services to help individuals and organizations identify issues and increase efficiency in their operations. A CPA consultant might evaluate things like internal controls and offer their professional opinion on potential operational improvements.
Industry (private) accountants work outside the scope of public accounting.
Company Management and Executives
CPAs often take on management roles that draw on their expertise in finance, operations, and improving profitability. CPAs commonly serve as CEOs, CFOs, and COOs.
Colleges and universities hire CPAs for academic and administrative roles.
The government employs CPAs in many different roles. Government entities like the IRS, FBI, U.S. military branches, and Congress all use CPAs in various capacities. CPAs can perform functions throughout local, state, and federal governments.
Non-profit organizations benefit from hiring CPAs for leadership and financial management who can advise and guide the organization in its use of funds. The board of a non-profit often appoints CPAs to help manage day-to-day operations.
Can a CPA Do More than an Accountant?
CPAs have several additional powers versus a non-certified accountant. CPAs can:
- Audit public companies
- Issue opinion letters
- Review public company financial statements for the SEC
- Sign a client’s tax return as a paid preparer
- Represent clients in front of the IRS (as can enrolled agents and attorneys)
Learn more about CPA requirements in New York.