What Does a CPA Do?

Ever wondered what a CPA really does?

You’re not alone.

As a Certified Public Accountant myself, I can tell you firsthand that the role is far more dynamic than just crunching numbers. Did you know that the employment of accountants and auditors is projected to grow 6% from 2023 to 2033, faster than the average for all occupations?

Intrigued?

Let’s dive into the diverse roles and responsibilities that CPAs hold and why this career might be the perfect fit for you.

Key Takeaways

• Diverse Roles: CPAs work in public accounting, management accounting, government accounting, and forensic accounting, handling tasks like auditing, tax preparation, financial analysis, and fraud investigation.
• Rigorous Requirements: Becoming a CPA involves earning a bachelor’s degree, passing the Uniform CPA Exam, gaining practical experience, and completing ongoing education.
• Specialization Options: CPAs can specialize in areas like IT accounting, environmental accounting, forensic accounting, personal financial planning, international accounting, nonprofit accounting, healthcare accounting, and real estate accounting.

Educational Requirements for CPAs

To become a CPA, you’ll need a solid educational foundation. Most candidates pursue a bachelor’s degree in accounting or a related field. The journey often starts with completing relevant accounting courses, including financial accounting, auditing, and tax law. An accounting degree not only provides the necessary knowledge but also prepares you for the rigorous CPA exam. It’s also recommended to study with the best CPA prep course that meets your preferences to pass on your first try.

1. Pass the CPA Exam

The CPA exam is the cornerstone of the certification process. It’s divided into four rigorous sections, each designed to test distinct aspects of accounting knowledge:

• Auditing and Attestation (AUD): Covers the audit process, ethics, and professional responsibilities. Expect questions on risk assessment, internal controls, and reporting.
• Financial Accounting and Reporting (FAR): Focuses on financial reporting standards for various entities, including for-profit, governmental, and not-for-profit organizations. It delves into financial statements, balance sheets, cash flow, and governmental accounting practices.
• Regulation (REG): Tests knowledge in federal taxation, business law, and ethical responsibilities related to tax practice. Topics include individual and corporate taxation, regulatory compliance, and professional conduct.
• Discipline Section (Select One): You’ll choose one of three specialized sections based on career goals:
  • Business Analysis and Reporting (BAR): Focused on financial analysis, budgets, and reporting.
  • Information Systems and Controls (ISC): Emphasizes IT audit controls, cybersecurity, and data management.
  • Tax Compliance and Planning (TCP): Geared toward in-depth tax knowledge, including planning and compliance strategies.

Each section of the CPA exam is four hours long, and a score of at least 75 is needed to pass. Once you pass the first section, you have 30 months to complete the remaining three sections.

2. Gain Relevant Experience

After passing the exam, most states require candidates to complete a specific amount of accounting experience under the supervision of a licensed CPA. Typically, this means 1-2 years of supervised experience, where you’ll apply accounting principles in a real-world setting. Whether in public accounting, corporate finance, government, or non-profit sectors, this step provides essential hands-on knowledge in financial reporting, audits, and regulatory compliance.

3. Complete the Ethics Exam (if Required)

An ethics exam, such as the AICPA’s Professional Ethics Exam, is often a requirement to ensure a firm grasp of ethical practices in the field. Some states mandate this open-book, multiple-choice test, which covers ethical standards and scenarios relevant to professional conduct. It reinforces the values and integrity that are central to the CPA role.

4. Apply for Your CPA License

After passing all exams and completing the required experience, you’ll submit your application for CPA licensure. Each state’s requirements vary, so you’ll need to check with your state’s Board of Accountancy to understand specific steps. Many states require additional documentation, such as transcripts, proof of experience, and completion of any state-required exams.

5. Meet Continuing Education Requirements

To keep your CPA license active, you’ll need to complete Continuing Professional Education (CPE) hours regularly. The exact requirements differ by state, but most require 40 hours of CPE per year or 80 hours biannually, with ethics training required every renewal period. Topics may range from updates in tax law to changes in financial reporting standards, helping CPAs stay current and maintain expertise.

By successfully completing these steps, you not only earn the CPA designation but also demonstrate a commitment to excellence, professionalism, and ongoing learning. This process equips you with skills that will serve as the foundation for a rewarding career in accounting, auditing, tax, and finance.

Certified Public Accountant Roles and Responsibilities

Public Accounting

One of the most common roles for CPAs is in public accounting. Public accountants work for public accounting firms and provide a variety of services, including:

• Auditing Services: CPAs conduct thorough examinations of financial records and statements to ensure accuracy and compliance with accounting standards. This involves reviewing balance sheets, income statements, and cash flow statements to verify that they present a true and fair view of the company’s financial position. Auditors also test internal controls and make recommendations for improvements.
• Tax Preparation: Helping clients prepare tax returns and plan for future tax liabilities, ensuring compliance with tax laws. This includes understanding current tax regulations, identifying eligible deductions and credits, and advising clients on tax strategies that minimize liabilities and maximize refunds.

Management Accounting

In management accounting, CPAs work within organizations to oversee internal financial management. Their responsibilities include:

• Financial Analysis: Analyzing financial data to support business decisions. This involves examining financial reports, performing variance analysis, and providing insights into financial performance. CPAs in this role help management understand the financial implications of business decisions and strategies.
• Budgeting and Forecasting: Preparing financial statements and budgets to guide the financial planning process. CPAs develop detailed budgets, forecast future financial performance, and monitor actual results against the budget. They identify variances and recommend corrective actions to ensure that financial goals are met.

Government Accounting

CPAs in government accounting ensure that government agencies manage public funds appropriately. They conduct audits, prepare financial reports, and ensure compliance with regulations. Government accountants also analyze financial data to improve efficiency and transparency in public spending, and they may be involved in financial planning and policy development.

Forensic Accounting

Forensic accounting is a specialized field where CPAs investigate financial discrepancies and fraud. They work closely with law enforcement and may even testify in court as expert witnesses. Forensic accountants analyze financial data to detect fraud, embezzlement, and other financial crimes. They compile evidence, prepare detailed reports, and often participate in legal proceedings to support criminal investigations and litigation.

Specializations within CPA

The CPA designation offers various specializations, allowing professionals to tailor their careers. Some niche areas include:

• IT Accounting: Focusing on financial systems and cybersecurity. CPAs in this field ensure that financial data is accurate, secure, and compliant with regulations. They may also implement and manage financial software systems and assess technology-related risks.
• Environmental Accounting: Addressing the financial impact of environmental regulations. CPAs in this specialization help organizations comply with environmental laws, measure the financial impact of sustainability initiatives, and report on environmental performance. They may also assist in developing strategies to reduce environmental costs and liabilities.
• Forensic Accounting: Investigating fraud and financial misconduct, providing litigation support, and acting as expert witnesses in court. Forensic accountants use their expertise to uncover hidden assets, trace illicit transactions, and provide detailed reports that can be used in legal proceedings.
• Personal Financial Planning: Assisting individuals with managing their finances, including investment strategies, retirement planning, and estate planning. CPAs in this field help clients develop comprehensive financial plans that align with their long-term goals and provide ongoing advice to ensure financial stability.
• International Accounting: Navigating the complexities of global financial regulations and standards, and helping multinational companies manage their finances. This specialization involves understanding different countries’ accounting practices and ensuring compliance with international financial reporting standards.
• Nonprofit Accounting: Managing the finances of nonprofit organizations, ensuring compliance with specific regulations, and helping these entities achieve their financial goals. CPAs in this area work with grant funding, donations, and endowments to ensure proper financial stewardship.
• Healthcare Accounting: Specializing in the financial management of healthcare organizations, including hospitals, clinics, and private practices. This involves managing billing, insurance reimbursements, and financial reporting in a highly regulated industry.
• Real Estate Accounting: Managing the financial aspects of real estate transactions, including property management, sales, and development. CPAs in this field handle everything from financial reporting for property portfolios to advising on tax implications for real estate investments.

Technical and Soft Skills

CPAs rely on advanced tools like Microsoft Excel, Oracle, and SAP for data analysis, reporting, and forecasting—critical skills in managing complex financial data efficiently. Proficiency in these platforms allows CPAs to streamline processes, interpret large datasets, and deliver valuable insights in today’s data-driven environment.

Equally important are strong communication, teamwork, and ethical judgment skills. CPAs often collaborate with diverse teams and need to convey complex information clearly while upholding high ethical standards. Trustworthiness, problem-solving, and strong interpersonal abilities are essential for building client relationships and effectively addressing financial challenges.

Career Prospects and Opportunities

Job Market Outlook

The job market for CPAs is robust, with a steady demand for their services. CPAs can expect competitive salaries and opportunities for bonuses and advancement. The increasing complexity of financial regulations and the need for transparency in financial reporting continue to drive demand for skilled accounting professionals.

Career Growth

CPAs have numerous paths for career advancement. They can move into senior management positions, such as Chief Financial Officer (CFO), or specialize further in areas like forensic accounting or financial consulting. Many CPAs also choose to start their own accounting firms, providing services to a diverse client base. The CPA designation opens doors to a wide range of opportunities, allowing professionals to shape their careers according to their interests and goals.

Is Becoming a CPA Right for You?

Deciding to become a CPA is a big commitment, but it offers meaningful rewards. Wondering if it’s the right fit? Consider these “if, then” scenarios to see if a CPA path aligns with your goals:

• If you’re passionate about finance and accounting—then becoming a CPA could open doors to a fulfilling career with diverse opportunities.
• If you’re ready to invest in education and professional certification—then the CPA credential can provide a significant return, enhancing both your career potential and earning power.
• If you have a knack for numbers and a keen eye for detail—then the rigorous CPA exam and accounting field could be a satisfying challenge, allowing you to leverage those strengths.
• If helping businesses succeed and ensuring financial integrity matters to you—then a CPA career might be the perfect match, as it plays a critical role in guiding and supporting organizations.

A CPA career might be your best fit if these align with your skills and aspirations. It’s not just a job; it’s a pathway to making a meaningful impact in the world of business and finance.

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