How to Choose
& Hire a CPA:
Questions and Answers for Business Owners,
Taxpayers and the General Public
Who needs a CPA?
How do I find a CPA?
What qualifications should I look for?
What do CPAs charge?
How can you get the most value from a CPA's services?
What services can a CPA offer?
Who needs a CPA?
If you believe that only the rich and famous need the services of a
certified public accountant (CPA), think again.
CPAs act as advisers to individuals, businesses, financial
institutions, nonprofit organizations, and government agencies on a wide range of
financial matters. Today, many individuals turn to CPAs for help with both their tax
preparation and personal financial planning. Increasingly, people rely on CPAs for
assistance in building college funds, planning for retirement, and creating estate plans.
Business owners and managers of various for-profit and
not-for-profit organizations have traditionally depended on CPAs for auditing services and
advice on developing effective accounting systems, maximizing operating results, and
resolving various management problems. In addition, CPAs assist businesses in designing
and installing data processing and management information systems.
If you are interested in the services that CPAs provide, this short
guide can offer you some basic tips on how to choose and use a CPA.
How do I find a CPA?
Referrals from friends, neighbors, and co-workers are one of the
best ways of locating a CPA. Business people, especially those in your field, can also be
of help. So can lawyers or bankers. CPAs are, of course, listed in phone directories. And
the Idaho Society of CPAs offers its on-line listing of member firms to assist you in
locating a CPA.
What qualifications should I look for?
Before you select a tax, accounting, or personal financial adviser,
make sure you consider the following questions:
-
Is the individual a certified public accountant?
-
Is the CPA licensed to practice in your state?
-
To what professional organizations does the CPA belong, and how
active is he or she in those organizations?
-
Are your needs compatible with the CPA’s personality and expertise?
Don’t underestimate the importance of the CPA designation.
Remember, those three letters are awarded only to those individuals who have passed a
rigorous two-day uniform national examination.
In addition, CPAs are distinguished from other accountants by
stringent state licensing requirements. Most states require CPAs to have at least a
college degree or its equivalent, but several also require post-graduate work.
Membership in professional organizations is also an important
qualification. For example, more than 350,000 CPAs belong to the American Institute of
Certified Public Accountants (AICPA). The Idaho Society of CPAs has more than
1,400
members. All AICPA and ISCPA members are governed by a code of professional ethics that is
among the most exacting of any profession. What’s more, their firms must undergo a
review of their accounting and auditing practice once every three years.
AICPA members must also satisfy extensive continuing education
requirements. And starting in the year 2000, new members are required to have
completed 150 semester-hours of higher education prior to joining the Institute.
Compatibility, the last qualification to look for in a CPA, is
harder to define but is just as important as technical proficiency. Make sure that the
CPA’s personality and expertise match your needs.
Keep in mind that a long-term working relationship between you and
your CPA can help you take an informed, consistent approach to personal financial and
business problems – and may help you meet your financial goals.
What do CPAs charge?
CPAs normally base their fees on the time required to perform the
services you request. There are no "fee schedules" common to the profession.
Fees depend on the type of services you require, the prevailing costs in the community,
the CPA’s level of expertise, and the complexity of your work.
Talk frankly with your CPA about fees. Find out how much you will
pay to have work performed by a staff accountant who is under the supervision of a CPA, a
higher-level employee such as a supervisor, or perhaps even a partner of the firm.
How can you get the most value from a CPA’s
services?
Although all CPAs meet substantially the same education, training
and licensing requirements, they do not all provide the same range of services. Therefore,
when looking for a CPA, you should analyze your current and future financial needs and
select someone who can address your particular concerns.
CPAs themselves have some suggestions on how you can make the best
use of accounting services and get the most value for your fee. Here are just a few of
them:
-
Be prepared to discuss your plans and objectives. CPAs are in the
best position to advise you and serve your interests when they understand the goals you
have set.
-
Gather information about business or personal financial decisions
under consideration so you can ask the CPA specific questions.
-
Clearly explain what you expect from the CPA’s services.
-
Save yourself unnecessary fees by keeping good records and not using
professional time for routine work.
-
Keep your CPA informed of changes in your personal and professional
life. A recent marriage or divorce, the birth of a child, a career change, or an
especially generous bonus all can have a significant impact on your tax liability and
personal financial goals.
Here are just a
few of the services a CPA may be able to offer you:
Services for business owners:
-
Setting up accounting systems
-
Helping you secure financing
-
Analyzing operating results
-
Providing management consulting services on such subjects as data
processing systems
-
Developing budgets and business forecasts
-
Preparing tax returns
-
Auditing, reviewing, or compiling financial statements
-
Assessing benefit and compensation plans
Services for taxpayers:
Services for the general public:
-
Developing a personal financial plan
-
Creating a family budget
-
Planning for retirement
-
Developing an estate plan
-
Assessing insurance needs
-
Advising you on divorce settlements
-
Helping you build college funds
This information was compiled by the
Communications Division of the American Institute of Certified Public Accountants, 1211
Avenue of the Americas, New York, NY 10036-8775.
Locate a CPA
