A Certified Public Accountant (CPA) is a licensed professional who performs a wide range of accounting, auditing, tax, and consulting services. CPA is highly trained in finances and accounting and plays a crucial role in the business world as well as for individual clients.
But what exactly does a CPA do on a daily basis? Here we will unpack the main responsibilities and day-to-day tasks of a CPA.
Education and Licensing Requirements
Becoming a certified public accountant in Chicago takes significant education and licensure. CPAs must complete at least a bachelor’s degree, often with a major in accounting or finance.
Additionally, most states require 150 credit hours of education, which equates to 30 hours beyond a typical 4-year degree. Aspiring CPAs must pass the Uniform CPA Exam, which is known as one of the most challenging professional exams.
Finally, licensing requirements vary by state but generally involve 1-2 years of qualified accounting experience and meeting ethical standards. Overall, the intense education, examination, and licensing process produces highly skilled accounting professionals ready to take on the CPA designation. Only those with persistence and proficiency earn the right to practice as certified public accountants.
Main Service Areas for CPAs
Certified public accountants offer professional services across four primary areas: tax, audit, advisory, and accounting services. Tax services involve assisting clients with tax compliance and preparation as well as proactively planning to minimize tax liabilities.
CPAs advise individuals on minimizing personal income tax obligations through strategies like maximizing deductions.
For businesses, CPA estate taxes may handle corporate tax returns, sales and payroll taxes, and tax planning to reduce tax burdens. Auditing services entail methodically evaluating the accuracy and compliance of a company or organization’s financial statements and internal controls.
As auditors, CPAs examine financial records, operations, functions, and disclosures to ensure reporting is reliable and follows regulations. Advisory services include risk assessment, budget analysis, mergers and acquisition consultation, and overall financial planning guidance aimed at improving an organization’s operations and decisions.
Lastly, general accounting services encompass tasks like bookkeeping, payroll processing, financial statement preparation, and management account reporting. Many CPAs choose to specialize in one of these main practice areas to gain expertise.
However, larger CPA firms require accountants to be well-versed across disciplines. In any area, CPAs provide customized guidance backed by their professional credentials.
Common Day-to-Day Tasks and Responsibilities
The typical day-to-day duties of a certified public accountant are diverse and complex, involving critical financial tasks across multiple disciplines. On any given day, a CPA may prepare, analyze, and verify essential financial statements, reports, and disclosures for an organization. These documents may include balance sheets, income statements, statements of cash flows, and other reports to provide insight into a company’s financial health and operations.
CPAs also regularly utilize data to conduct deep analysis to guide organizations in making optimal business decisions about issues like expansion, investments, and budgeting.
Ensuring legal and regulatory compliance is another central responsibility, as CPAs keep up-to-date with the latest accounting rules and tax codes. Advising clients on major financial decisions is also a daily task, whether individuals on personal finance or executives on corporate strategy.
Tax preparation and planning services also occupy a significant portion of a CPA’s routine, especially during tax season. Detecting signs of fraud through forensic accounting techniques also falls under the purview of many CPAs. On a technical level, CPAs rely heavily on accounting, auditing, and tax software to execute much of their daily work efficiently.
Face-to-face meetings with clients are another key part of the job to understand specific needs and provide financial guidance. The diverse set of critical financial tasks performed daily makes CPAs essential professionals.
Career Advancement Possibilities
The career of a CPA can progress in many directions. Many work for public accounting firms and aspire to make partners. Others work in private, government, or CPA for nonprofits. More experienced CPAs often move into top management and executive positions as their expertise expands.
Some CPAs who gain ample experience and industry connections choose to open their own independent firms. Geographic mobility can significantly benefit career development for ambitious CPAs, as relocating to larger markets provides access to more clients and prominent firms to gain knowledge.
Overall, the multi-faceted CPA license offers flexible career progression, from public accounting upward mobility to lucrative private sector corporate roles, to partner track positions, to entrepreneurship owning a firm. With versatility, hard work, and continued education, CPAs have promising career prospects.
Salary and Job Outlook
Certified Public Accountants earn competitive compensation packages, especially as they gain proficiency and seniority in the field. According to the Bureau of Labor Statistics, the median annual salary for CPAs in the United States is approximately $73,000.
Those with extensive experience, specialized expertise, and roles in major metropolitan markets can earn well into the six figures, exceeding $100,000 annually. The job outlook for CPAs is very strong, as demand for accounting services is expected to expand with economic growth.
Employment for CPAs is projected to grow by 7% between 2016 and 2026 according to government estimates. This rate of job growth is faster than the average across all occupations, signaling the advantage a CPA certification carries in the job market. As businesses and individuals require more assistance with tasks like financial reporting, tax planning, audits, and advisory services, CPAs will continue to see their skills in high demand.
Those considering the significant educational and licensure requirements to become a CPA can feel confident about entering a well-compensated, steadily growing profession. With sound long-term job prospects and competitive salaries, the accounting field offers financial and career stability.
In summary, Certified Public Accountants play a critical role in the functioning of businesses and financial markets. Although much of a CPA’s work involves number-crunching and detail-oriented tasks, their analysis and advice guide important decisions and ensure ethical accounting practices. The CPA license represents high standards of expertise, qualification, and service.