Certified Public Accounting firms provide accounting, auditing, financial and consulting services to nonprofit, private and public businesses as well as government agencies. Each firm must have at least one state-licensed certified public accountant from the state in which the business operates. Individual states establish the licensing and certification requirements of the CPA, which can differ by state.
CPA Firm Duties
CPA firms offer a variety of financial and consulting services, depending upon the needs of the business or agency that hired them and their individual mission and focus. Services include assurance and auditing, information technology, forensic and environmental accounting, international accounting, business and management consulting, tax and individual financial planning. Within these designations, a CPA firm may have on or off-site accountants to handle daily accounting needs, review monthly reports for accounting integrity or prepare the quarterly, semiannual or yearly tax forms needed for the business to operate.
CPA Firm Structure
Most CPA firms have at least one, if not several certified public accountants as partners or heads of the company, depending on the size of the firm. Staff members may include auditors, tax accountants, senior, staff or junior accountants, accounts payable or receivables technicians, software or information technology professionals, project accountants, cost accountants or other specialized accountants based on the firm's clientele list. The firm's CPA partners usually manage the high-end clients and all new account activity.
Forensic and valuation services offered by CPA firms help companies recreate accounting records, develop an inventory management system or make accurate asset valuations. Along with improved information technology financial systems, CPA firms might also help a company improve its internal and external fraud detection and protection, offer personal financial planning, as well as management and other financial consulting services to businesses or individuals. After a review of a company's policies and procedures, financial and record-keeping practices, for example, a CPA firm makes recommendations to the company for improvements.
For CPA companies that audit public company financial statements, the firms must register with the Congress-established Public Accounting Oversight Board under the Sarbanes–Oxley Act of 2002. Federal securities laws require public companies to provide financial statements that are truthful, complete and accurate under federally established Generally Accepted Accounting Principles that have been reviewed and audited by an independent firm. But CPA firms also complete audits of a company's internal systems and controls to ensure financial reporting functions appropriately and operates efficiently. After a system audit, the CPA firm makes recommendations for improvements and changes.
As each sets the requirements for CPA licensing and certification, educational requirements may differ. Most states require at least a bachelor's degree in a specific field such as accounting, business or economics with at least 150 semester hours. Some states use the one-tier system that allows you to sit for the licensing and certification exam once you fulfill the experience requirements. States with a two-tier system allow you to take the CPA test once you have the education, but you do not receive certification until you complete the experience requirement.
- PICPA: What Does a CPA Do?
- American Institute of CPAs: CPA Career Paths
- Public Company Accounting Oversight Board: Sabranes-Oxley Act of 2002
- American Institute of CPAs: CPA Licensure
- American Institute of CPAs: 150 Hour Requirement for Obtaining CPA Certification
- American Institute of CPAs: Join the AICPA