CPA FAQ

Not quite. While all CPAs are accountants, not all accountants are CPAs. An accountant is anyone who manages financial records, including non-licensed bookkeepers and tax preparers. A CPA, however, has earned a state-issued license by passing the Uniform CPA Examination, completing required education (typically 150 college credit hours), and gaining supervised professional experience. CPAs are also held to a strict code of ethics and must complete continuing education to maintain their license.

CPAs hold exclusive legal authority for certain critical services that non-licensed accountants cannot perform:

• IRS Representation: Only CPAs (and Enrolled Agents) can represent clients before the IRS during audits, appeals, or collection issues.
• External Audits: Non-CPAs can perform internal audits, but only a licensed CPA or CPA firm can conduct external audits and audits of publicly traded companies.
• SOC Audits: Service Organization Control audits, which assess a company's internal controls, require a CPA.
• SEC Filings: All publicly traded companies must have their financial statements certified by a CPA before filing with the Securities and Exchange Commission.

Basic bookkeeping is manageable on your own, but a CPA brings specialized knowledge in tax law, financial planning, and business strategy that typically saves you far more than their fee. A good CPA will:

• Identify deductions and credits you would likely miss on your own
• Develop proactive strategies to minimize your tax liability year-round
• Represent you if the IRS raises questions about your return
• Serve as a trusted advisor for major financial decisions, from buying a business to planning for retirement

CPAs work with clients throughout the entire year. While tax preparation is one of the most visible services, some of the most valuable work happens outside of tax season: planning strategies to reduce next year's tax bill, advising on major purchases or business transactions, reviewing financial statements, and helping clients adapt to life changes that have financial implications. A great CPA relationship is ongoing, not seasonal.

Before selecting a CPA, consider the following:

• Is the individual a licensed CPA in your state?
• Are they a member of professional organizations such as the AICPA or their state CPA society, and are they active in those organizations?
• Does their area of expertise match your specific needs, whether that's personal tax, business advisory, estate planning, or something else?
• Is their communication style and personality a good fit for you?

Don't underestimate the importance of personal compatibility. A long-term working relationship with the right CPA can make all the difference in achieving your financial goals consistently over time.

CPA fees vary based on the type of services needed, the complexity of your situation, your location, and the CPA's level of experience. There is no universal fee schedule across the profession. Most CPAs bill by the hour, though some offer flat-rate packages for specific services such as individual tax returns. The best approach is to have an open conversation with your CPA about fees before work begins. Ask how work is billed, who on the team will perform it, and what you can expect to pay.

Personal referrals are one of the best ways to find a CPA. Ask friends, family, or business associates, especially those in a similar financial situation, for recommendations. You can also ask your banker, attorney, or local chamber of commerce. Once you have a few names, verify that each CPA is licensed in your state and take time for an initial conversation to make sure their expertise aligns with your needs.

The more your CPA understands about you and your goals, the better they can serve you. Here's how to make the most of the relationship:

• Be open about your financial goals and any major decisions you're considering
• Keep organized records to minimize time spent on routine tasks
• Notify your CPA of significant life changes like marriage, divorce, a new child, a career shift, or a large bonus, as these all have tax and financial planning implications
• Ask questions freely; a good CPA welcomes the conversation

A CPA relationship grows more valuable with time. As your CPA comes to deeply understand your finances, both personal and business, their advice becomes increasingly tailored and proactive. Over years, a trusted CPA can help you structure a business acquisition, navigate a major life transition, plan your estate, and build lasting wealth. Think of it not as a transaction, but as a long-term financial partnership built on trust.