Certified Public Accountant ( CPA ) is a qualified accounting title in various countries in the English-speaking world. In the United States, the CPA is a license to provide accounting services to the public. This is given by each of the 50 states to exercise in the state. In addition, almost every country (49 out of 50) has passed the mobility laws to allow CPAs from other countries to practice in their country. The state licensing requirements vary, but the minimum standard requirements include passing the Uniform Certified Public Accountant Exam, 150 units of college education semester, and one year accounting related experience.
Ongoing professional education (CPE) is also required to maintain the license. Individuals who have been awarded the CPA but have fallen in the required CPE fulfillment or have requested to be converted to an inactive status in many countries are permitted to use "Inactive CPA" designations or equivalent phrases. In most U.S. states, only CPAs can legally provide public validation opinions (including audits) of financial statements. Many CPAs are members of the American Institute of Certified Public Accountants and their country CPA communities.
State laws vary widely on whether non-CPAs are even allowed to use title accountants. To illustrate, Texas prohibits the use of "accountant" and "auditor" designations by someone not certified as a Texas CPA, unless the person is a CPA in another state, is not a resident of Texas, and if it is not eligible for practice in Texas by the company and CPA practitioners outside the state.
Many other countries also use CPA titles to appoint local public accountants.
Video Certified Public Accountant
Services provided
The main functions undertaken by the CPA relate to the warranty service. The most frequent guarantee services are financial audit services where the CPA proves the fairness of disclosure, freedom from material misstatement, and compliance with generally accepted accounting principles (GAAP) in the financial statements. CPAs can also be used in companies (called "private sector") in financial or operating positions such as financial analysts, financial managers, controllers, chief financial officers (CFOs) or chief executive officers. This CPA does not provide direct services to the public.
Although some CPA companies serve as business consultants, the role of consultants has been under scrutiny following the Enron scandal in which Arthur Andersen simultaneously provides audit and consultancy services that affect their ability to maintain independence in their audit tasks. This incident led many accounting firms to divest in their consulting division, but this trend has reversed. In audit engagements, CPAs are (and always are) required by Federal and State professional and statutory standards to maintain independence (both in reality and in appearance) of the entity for which they are engaged (audit and review) engagement. Although most CPAs who work as consultants do not work as auditors, if the CPA company audits the same company that the company also conducts consultations for employment, there is a conflict of interest that cancels the CPA's corporate independence for a variety of reasons including: (1) will audit their own work or work they advise and (2) CPA companies may be pressured to excessively provide a positive (unmodified) audit opinion in order not to jeopardize the consulting revenue received by the company from clients.
The CPA also has a niche in the industry for the preparation of income tax returns. Many small to medium sized companies have tax and audit departments. Together with lawyers and Registered Agents, the CPA may represent taxpayers in the matter prior to the Internal Revenue Service. Although the IRS regulates the practice of tax representation, the IRS has no authority to regulate tax builders.
Although the CPA is a public accounting license, many states also allow unlicensed accountants to work as public accountants. For example, California allows unlicensed accountants to work as public accountants if they work under the control and supervision of the CPA. However, the California Board of Accounting itself has determined that the terms "accountant" and "accounting" mislead community members, many of whom believe that people who use this provision must have licenses. As part of the California Poll, survey research shows that 55 percent of Californians believe that someone who advertises as an "accountant" should be licensed, 26 percent do not believe licenses are required, and 19 percent do not know.
Whether providing services directly to the public or employed by a company or association, the CPA may operate in almost all areas of finance including:
- Warranty and attestation services
- Corporate financing (mergers and acquisitions, initial public offerings, shares and debt issues)
- Corporate governance
- Land planning
- Financial accounting
- Government accounting
- Financial analysis
- Financial planning
- Forensic accounting (preventing, detecting and investigating financial fraud)
- Income tax
- Information technology, especially those applied to accounting and auditing
- Management consulting and performance management
- Preparation and tax planning
- Business capital
- Financial reporting
- Regulatory compliance
Maps Certified Public Accountant
CPA exam
To become a CPA in the United States, candidates must sit and pass the Certified Public Accountant's Uniform Examination (CPA Uniform Test), set by the American Institute of Certified Public Accountants (AICPA) and administered by the National Association of State. Boards of Accountancy (NASBA). The establishment of the CPA was first established in the state of New York on April 17, 1896.
Eligibility for a Uniform CPA Exam is determined by each state accountant board. Many countries have adopted what is known as the "150-hour rule" (150 units of college semester or equivalent), which usually takes an additional year of education through a regular 4 year bachelor's degree, or a master's degree. Some universities offer a combined 5-year degree/master degree program, which allows a student to earn both degrees while receiving the 150 hours required for appraisal.
The Uniform CPA exam tests the general principles of state law such as contract law and agency (questions that are not adapted to the variance of a particular country) and some federal laws as well.
Other licensing and certification requirements
Although the CPA exam is a uniform, licensing and certification requirement imposed separately by each state law and therefore varies from state to state.
The state requirements for CPA qualification can be summarized as Three Es - Education, Exam and Experience. Educational requirements should normally be met as part of the eligibility criteria for the Uniform CPA Exam. The checking component is the Uniform CPA Test itself. Some countries have a two-tier system where the first individual will get certified - usually by giving a Uniform CPA Test. The individual will then be entitled to be licensed after a certain amount of work experience has been achieved. Other countries have a one-tier system whereby a person will be certified and licensed at the same time when both CPA exams are authorized and work experience requirements have been met.
Two-tiered countries include Alabama, Florida, Illinois, Montana, and Nebraska. The trend is a two-tiered condition to gradually move towards a one-tier system. Since 2002, the state accountant councils in Washington and South Dakota have ceased issuing the CPA "certificate" and instead issued the "license" CPA. Illinois plans to follow suit in 2012.
Some countries have two levels, but require work experience for CPA certificates, such as Ohio.
Working experience requirements
The components of experience vary from one state to another:
- Two-tier conditions generally do not require individuals to have work experience to receive a CPA certificate. (Work experience is required, however, to receive a license to practice.)
- Some states, such as Massachusetts, override the terms of work experience for those with a higher academic qualification than the state requirements to perform for Uniform CPA.
- The majority of states still need work experience to be natural public accounting , which is two years of audit or tax experience, or a combination of both. Increases in the number of countries, however, including Oregon, Virginia, Georgia and Kentucky, received more general experience in accounting. In Texas, only one year of experience in accounting under CPA supervision is required; Such an experience does not have to be in a public accountant. This allows people to get CPA designation while working for corporate finance functions.
- The majority of countries require applicant work experience to be verified by someone who has been licensed as a CPA. This requirement may cause difficulties for applicants based outside of the United States. However, some countries such as Colorado and Oregon also receive work experience certified by Chartered Accountant.
Ethics
More than 40 state councils now require applicants to CPA status to complete ethics-specific exams, which are effectively the fifth test in terms of requirements for becoming a CPA. Most of them receive independent AICPA CPE Professionals for CPA CPE courses or other courses in general professional ethics. Many countries, however, require that ethics courses include the review of country-specific rules for professional practice.
Continuing professional education
Like other professionals, CPAs are required to take continuing education courses towards continuing professional development (continuing professional education [CPE]) to renew their licenses. Terms vary by state (Wisconsin does not require CPE for CPAs) but most require an average of 40 CPE hours each year with a minimum of 20 hours per calendar year. Requirements can be met through attending live seminars, webcast seminars, or through self-study (textbooks, videos, online courses, all of which require tests to receive credit). In general, the state council receives direct internet-based credit groups and groups for all credit terms, while some countries limit the amount of credit earned through self-learning format. All CPAs are encouraged to periodically review their country requirements. As part of the CPE requirements, most countries require their CPA to take an ethics course at a certain frequency (such as any or any other renewal period). Ethical requirements vary by country and courses range from 2-8 hours. The AICPA guide (adopted by many state councils) provides a 1 hour CPE credit license for every 50 minutes of instruction.
Lost license
CPA licenses may be suspended or revoked for various reasons. Common reasons include this:
- Failure to pay state license fee
- Failure to complete continuing education requirements
- "Discriminable Measures", which may include 1) failure to comply with applicable standards (such as auditing standards when checking financial statements, or tax codes when preparing tax returns) or 2) violation of criminal or severe crimes legislation (which may or may not be related to accounting practice, a well-known example of a CPA whose license is revoked for related non-financial criminal law is John Battaglia, convicted of murder of his children.
Other accounting appointments are sometimes confused with CPA
Many countries have (though some still do) second-level accountant qualifications in addition to CPAs, usually titled "Public Accountants" or "Licensed Public Accountants" (with "PA" or "LPA"), although other titles include " Registered Public Accountant "(RPA)," Accounting Practitioner "(AP), and" Registered Accounting Practitioner "(RAP). Such an assignment serves to help regulate the practice of public accountants in the state by embarrassing through a non-CPA accountant accountant who has practiced a public accountant before the state accounting laws governing it apply. The majority of countries have closed the appointment of "Public Accountants" (PA) to newcomers, with only five countries continue to offer appointments. Many PAs belong to the National Association of Accountants.
Many states prohibit the use of the term "Public Accountant" or "Licensed Public Accountant" (or "PA" or "LPA" abbreviation) by someone not certified as a PA in that state.
In Australia, the appointment of a "Public Accountant" is used by members of the Australian Institute of Certified Public Accountants.
Mobility training
An accountant is required to meet the legal requirements of each country where the accountant wants to practice.
In recent years, the mobility practice for CPA has been a major business concern for CPAs and their clients. Train mobility for a CPA is the general ability of reputable licensees from states that are substantially equivalent to obtaining privileged practice outside their home country without obtaining additional licenses in the state where the CPA will serve clients or employers. In today's digital age, many organizations that require CPA professional services do business interstate and internationally and have compliance responsibilities in various jurisdictions. As a result, CPA practices often extend across state and international borders.
Different requirements for CPA certification, reciprocity, temporary practices and other aspects of state accounting laws in 55 US licensing jurisdictions (50 states, Puerto Rico, District of Columbia, US Virgin Islands, Guam and Commonwealth of the Northern Mariana Islands) interstate and CPA mobility is more complicated. By removing restrictions for practice in the US, CPAs can better serve individuals and businesses that require their expertise. At the same time, the state board's accounting capacity for discipline is enhanced by being based on CPA and CPA company service performance (whether physically, electronically or within a country), rather than based on whether a state license is held.
The American Institute of Certified Public Accountants (AICPA) and the National Association of State Board of Accountancy (NASBA) have analyzed the current system for privileged cross border practice and have authorized a unified mobility system. This model approach is detailed through the provision of substantial equality (Section 23) of the Uniform Accountancy Act (UAA). UAA is a "green" model license law that is jointly developed, maintained, reviewed and updated by AICPA and NASBA. This model provides a uniform approach to setting up the accounting profession.
According to Section 23 of the UAA, a CPA with a reputable license from a jurisdiction with a CPA licensing requirement that is essentially equivalent to that described in the UAA is considered "substantially equivalent," or a licensee who individually meets the requirements:
- Earn 150 credit hours (150 units of college semester or equivalent) with a bachelor's degree
- A minimum of one year CPA experience
- Passed Uniform CPA Exam
The uniform application of equivalent UAA substitution equivalence creates a system similar to the driver's driver's license program by providing CPAs with mobility while maintaining and strengthening the ability of state councils to protect the public interest. This system allows consumers to receive timely services from the CPA that are best suited for the job, regardless of location, and without unnecessary submission barriers, forms and increases in fees that do not protect the public interest.
As of October 2012, a total of 49 of the 50 states and the District of Columbia have passed mobility laws and are now in the implementation and navigation phase. Only the Commonwealth of the Northern Mariana Islands, Virgin Islands, Hawaii, Puerto Rico and Guam have not passed mobility laws. On September 20, California Governor Jerry Brown signed a law allowing cross-border mobility for the CPA. The law came into force on 1 July 2013. The District of Columbia passed a mobility law which came into effect on October 1, 2012.
Membership of AICPA
The CPA assignment is awarded by each state council, not the American Institute of Certified Public Accountants (AICPA). Membership in AICPA is not mandatory for CPAs, although some CPAs do join. To become a full member of AICPA, the applicant must hold a valid CPA certificate or license from at least one of the fifty-five US state/territory accountant boards; some additional terms apply.
AICPA members agree to the proposed amendments to the law to get eligible persons to vote for membership that previously holds a CPA certificate or license or has met all requirements for CPA certification in accordance with the Uniform Accounting Act (UAA). AICPA announces its plan to accept applications from individuals who meet this criteria, starting no later than January 1, 2011.
Membership of the CPA Country association
The CPA may also choose to become a member of an association or local country community (also optional). The membership benefits in CPA associations range from major discounts on seminars that qualify for continuing education credits to protect public and professional interests by tracking and lobbying legislative issues affecting local state taxes and financial planning issues.
CPAs that maintain CPA country membership are required to follow the community's professional code of conduct (other than any code enforced by the state regulatory authority), further assuring the client that the CPA is an ethical business professional doing legitimate business that can be trusted to handle personal and business finances secret. The state CPA association also serves the community by providing information and resources about the CPA profession and receiving inquiries from students, business professionals, and the wider community.
CPAs are usually not limited to membership in state CPA societies where they reside or hold licenses or certificates. Many CPAs living near state borders or who hold CPA status in more than one country can join more than one CPA country.
Association of Countries
- The Missouri Society of Certified Public Accountants (MOCPA)
- California Society of Certified Public Accountants (CalCPA)
- Florida Institute of Certified Public Accountants (FICPA)
- Indiana CPA Institute (INCPAS)
- Maryland Pawnshop Association (MACPA)
- Minnesota Society Certified Public Accountants (MNCPA)
- The Wisconsin Institute for Certified Public Accountants (WICPA)
See also
- Accountant
- A Chartered Professional Accountant (Canada)
- CPA Magazine
- Institute of Certified Public Accountants in Ireland (CPA Ireland)
- Certified Management Accountant by Institute of Management Accountants
- Certified National Accountant (Nigeria)
- Institute of Certified Public Accountants
- Certified Practicing Accountant (Australia)
- Chartered Certified Accountant (ACCA)
- Registered Global Accountant Accountant
- Legal responsibilities of certified public accountants
References
External links
- Country CPA Membership Directory
Source of the article : Wikipedia
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