Certified Public Accountant (CPA)

Definition

A Certified Public Accountant (CPA) is a professional designation given to accountants who have passed the CPA exam and met additional state certification and experience requirements. CPAs are qualified to perform a variety of accounting tasks, including auditing, tax preparation, and financial consulting.

5 Must Know Facts For Your Next Test

1. CPAs must pass a rigorous four-part exam covering auditing, business concepts, financial accounting, and regulation.
2. In addition to passing the exam, CPAs must meet specific education and experience requirements set by their state.
3. CPAs are legally allowed to sign audit reports and represent clients before the IRS.
4. Ethics and continuing education are crucial components of maintaining CPA licensure.
5. Managerial accountants with a CPA designation can provide more credibility in financial reporting and strategic decision-making within organizations.

Review Questions

• What are the primary qualifications required to become a Certified Public Accountant (CPA)?
• Why might managerial accountants pursue CPA certification?
• What unique capabilities does a CPA have compared to non-certified accountants?

Related terms

Auditing: The process of examining financial statements to ensure accuracy and compliance with regulations.

Tax Preparation: The act of preparing tax returns for individuals or businesses.

Financial Consulting: Advisory services aimed at optimizing an organization's financial performance.