What is a Certified Public Accountant (CPA)? 2021

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Certified Public Accountant (CPA) Definition

A certified public accountant (CPA) is a designation given by the American Institute of Certified Public Accountants (AICPA) to people who pass the Uniform CPA Examination and meet the education and experience prerequisites. The CPA designation assists apply professional standards. Other nations have certificates equal to the CPA designation, especially, the chartered accountant (CA) designation.

What is a Certified Public Accountant (CPA)?
What is a Certified Public Accountant (CPA)?

KEY TAKEAWAYS

  • A certified public accountant (CPA) must fulfill education, job, and evaluation requirements--such as holding a bachelor's degree in business management, finance, or accounting, and completing 150 hours of instruction.
  • Other prerequisites for the CPA designation include having two or three years of public accounting experience and passing the Uniform CPA Exam administered by the American Institute of Certified Public Accountants (AICPA).
  • CPAs normally hold different positions in corporate and public accounting, in addition to executive positions, like the control of chief financial officer (CFO).

Knowing Certified Public Accountants (CPA)

Obtaining the certified public accountant (CPA) designation requires a bachelor's degree in business management, finance, or accounting. Also, have no fewer than 2 decades of accounting experience and People are needed to complete 150 hours of instruction. CPAs should pass. Maintaining the CPA designation requires completing a particular amount of continuing education hours.

CPAs have a vast selection of livelihood possibilities available, either incorporate or public accounting. People with the CPA designation may also move to executive positions such as controls or chief financial officers (CFOs). CPAs are famous for their function in income tax planning but can concentrate in some locations, such as forensic accounting, accounting, auditing, managerial accounting, and information technology.

Certified public accountants are subject to some code of integrity. The Enron scandal is a good illustration of CPAs not sticking to such a code. CPAs and Arthur Andersen business executives were charged with unethical and illegal accounting practices. State and federal legislation require CPAs to keep freedom when performing reviews and audits. While consulting Enron, Arthur Andersen CPAs performed auditing solutions and consulting services, that violates the CPA code of integrity and didn't maintain liberty.

What is a Certified Public Accountant (CPA)?
What is a Certified Public Accountant (CPA)?

The APCIA demands that CPA designation holders adhere to the Code of Professional Conduct, which sets out to.

Kinds of CPAs

CPAs normally become an accountant of some kind. In other words, they keep set together and review financial statements and trades for businesses. Returns or tax forms file for companies and individuals. CPAs sign off on audits and can do.

The CPA designation is not required to operate in corporate bookkeeping or to get private businesses. But, public accountants -- that are people working for a company, for example, Ernst & Young or Deloitte, that offers tax-related and bookkeeping solutions need to hold a CPA designation.

History of Certified Public Accountant (CPA)

Back in 1887, 31 colleagues created the American Association of Public Accountants (AAPA) to specify moral criteria for the accounting business and U.S. auditing criteria for the state, local, and national authorities, private businesses, and nonprofits. Renamed many times through the years, the company was called the American Institute of Certified Public Accountants (AICPA) because 1957 and gives CPA certification examinations. Permits were received by the CPAs.

In 1934 the Securities and Exchange Commission (SEC) required all publicly traded companies to file periodic financial reports supported by members of the accounting market. The AICPA established accounting criteria until 1973 when the Financial Accounting Standards Board (FASB) was started to establish standards for private businesses.

The accounting business thrived due to accounting firms from the 1990s. The Enron scandal in 2001 resulted in changes including the fact that one of the country's leading accounting firms, Arthur Andersen, went out of business. Underneath the Sarbanes-Oxley Act, that was passed in 2002, accountants were subject to more demanding restrictions in their consulting duties.

What is a Certified Public Accountant (CPA)?
What is a Certified Public Accountant (CPA)?

Related Terms

American Institute of Certified Public Accountants (AICPA) Definition

American Institute of Certified Public Accountants (AICPA) is a U.S. non-profit professional company of certified public accountants.

Certified Fraud Examiner (CFE)

A certified fraud examiner is an expert certificate accessible to examiners. The world organization issues it.

International Federation Of Accountants (IFAC) Definition

The International Federation of Accountants (IFAC) is a worldwide company representing the accounting profession.

Accountant

An accountant is a certified financial professional who performs acts like audits or financial statement evaluation based on prescribed methods.

Metcalf Report

The Metcalfe report was a critical report on the U.S. accounting profession published in 1976 by Senator Lee Metcalf.

Auditing Standards Board (ASB)

The Auditing Standards Board (ASB), a portion of the AICPA, problem guidelines, and principle pronouncements which CPAs must stick to in Tests and attestations.

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