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Certified Public Accountants:
Certified public accountants are college graduates who have also passed a comprehensive accounting exam. These exams, administered by the states, are based on a uniform national exam. CPAs are required to take a certain number of continuing education courses each year to be allowed to continue practicing accounting. CPAs also can represent clients before the IRS. CPAs work on three levels:
- audit, in which they simply use whatever information you provide to fill out forms;
- review, in which they perform a limited number of checks and make a few suggestions; and
- compilation, is a complete and thorough examination of financial records.
The services of a CPA are particularly useful if you are self-employed, if you own a small business, if your financial situation is changing, or if you make a lot of money. An accountant should also be consulted if you are planning to approach a bank for a loan Most banks want to see personal financial statements before agreeing to lend money.
Your bank, in fact, is a good resource when you begin to look for a CPA Bankers lawyers and owners of businesses in the community can all provide names of respected accountants (But you should double-check by calling the State Board of Accountancy to see whether any complaints have been filed against any of the CPAS on your list.)
Increasingly, CPAS are specializing, particularly in the areas of tax compliance, audit, management services, and financial planning. So, in your initial call to a prospective accountant, you should describe your needs and concerns and ask about the CPA's experience in dealing with your kind of problems.
This first contact will also help you determine how well the accountant communicates. A CPA who cannot translate accounting tech talk into lay terms is not going to be a useful team member.
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