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History of CPA Designation 

The CPA license, which stands for Certified Public Accountant, is a prestigious certification that is given by the Board of Accountancy by each state. In 1887, a group of skilled accountants took the initiative to create the American Association of Public Accountants (AAPA) with a clear objective to define and establish ethical standards for the accounting industry. This company has undergone multiple name changes over the years and now has the name of American Institution of Certified Public Accountants (AICPA) since 1957. In 1896, the first licensed CPA were granted their license, marking a milestone in the history of accounting. The responsibility of CPAs to attest to the accuracy of financial statements grew in the 1930s as federal regulation increased after the 1929 Stock Market Crash. 

By the 1990s, the accounting industry thrived as large accounting firms began to offer consulting services of different kinds. However, things drastically changed in 2001, due to the Enron Scandal of 2001. The regulation of accounting firm went through various changes, and Arthur Andersen, one of the top accounting firms, went out of business. CPAs who audit publicly-held companies are now subject to federal regulation and monitoring. 

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CPA licenses are regulated by the states. Each state specifies the exact requirements for licenses in an Accountancy Act. Each state has a which monitors the licensed CPAs to make sure they complete the required continuing education and follow the rules of conduct and ethics requirements. As part of this responsibility, state boards conduct investigations of complaints about the services provided by CPAs and make sure that no one is practicing as a CPA without a valid, current license.  

Exam 

Auditing and Attestation (AUD)

78 Multiple-Choice Questions 

7 Task-based simulations 

Business Analysis and Reporting (BAR) 

50 Multiple-Choice Questions

7 Task-based Simulations

Financial Accounting and Reporting (FAR)

50 Multiple-Choice Questions 

7 Task-based Simulations

Information Systems and Controls (ISC)

82 Multiple-Choice Questions

6 Task-based Simulations 

Taxation and Regulations (REG) 

72 Multiple-Choice Questions

8 Task-based Simulations

Tax Compliance and Planning (TCP)

68 Multiple-Choice Questions

7 Task-based Simulations 

Main Roles of CPA 

CPAs can work in a variety of settings and perform numerous job duties. The specifics of their job responsibilities change depending on the company they work for and their company’s goals and objectives. Common job duties for CPAs, regardless of the specific of their position include:

  • Tax oversight: CPAs prepare and file companies taxes. They may also represent the company in interaction with the IRS (Internal Revenue Service) if needed. 

  • Record keeping: CPAs manage financial record keeping independently or on a team of other financial professionals

  • Reports: Most CPAs serve as both financial experts and a liaison to the company’s upper management team. CPAs often create financial reports and present them to company leaders. 

  • Audits: CPAs also perform internal audits of the company’s finances to ensure all the record keeping is accurate and that they account for all the money that comes into the business and leaves the business. 

  • Forecasts: Some CPAs also assist their company’s leadership with financial forecasting. They may provide potential quarterly or annual profit projections for help with investing capital. 

  • Compliance: CPAs help businesses ensure regulatory compliance. They also update any processes and procedures in the accounting department to reflect regulatory changes.

Benefits of a CPA  

Hiring a CPA rather than a traditional accountant or bookkeeper provides your company with a number of advantages. Consider to top benefits of hiring a CPA:

  • Tax understanding: In order to pass their certification exam, CPAs must have a thorough and deep understanding of tax law. CPAs are perfectly positioned to not only prepare and file you business’s taxes but also stay aware of any changes in tax law and filing regulations, and keep your company in compliance. 

  • Debt reduction: CPAs can help your company reduce debt by creating effective budgets and managing financial oversight. Since CPAs are financial experts, they can help you make a budget that maintains your business’s efficiency but also pays down any outstanding debts to help your organization make a profit. 

  • Investment advising: CPAs are also capable of managing capital investments to increase your business’s financial stability. They can determine how much money your company can realistically spend on investing and manage those investments as needed. 

  • Decision making: Many CPAs create financial reports designed to help you and your leadership team make complex business decisions. Your CPA can create potential profit forecasts based on a number of financial scenarios to help you make informed choices regarding company growth and directions. 

  • Cost reduction: A CPA can also help you reduce unnecessary costs in your organization. When reviewing your organization’s budget, your CPA can identify areas where you can reduce waste and where you could increase spending to improve production numbers and, eventually, profits. 

  • General financial oversight: Overall, a CPA can help you understand all aspects of your company’s financial health, from taxes to forecasting. Having a dedicated financial professional on staff ensuring you're working towards your financial goals while still maintaining regulatory compliance and paying off any debts can positively benefit your bottom line

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