Certified Public Accountants (CPA): Roles, Responsibilities, and How to Become One

If you are exploring career options in finance and accounting, you have likely come across the term “Certified Public Accountant” or CPA. But what exactly is a CPA, and why is this qualification so sought-after? In this article, we will explore the roles and responsibilities of CPAs, highlight the steps involved in becoming one, and discuss how it differs from other accounting qualifications. Whether you are considering this career path or simply want to understand its benefits, read on to find out how CPAs contribute to the world of finance and accounting.

CPAs are more than just accountants—they are trusted financial experts who can represent clients before the IRS, provide audit services, and offer strategic financial advice. Their expertise makes them highly valued in various industries. In India, finance professionals also benefit from additional financial tools like Bajaj Finserv Chartered Accountant Loan, which helps CPAs and CAs grow their practices.

What is a Certified Public Accountant (CPA)?

A Certified Public Accountant (CPA) is a qualified financial professional recognised for their expertise in accounting, tax, and auditing. CPAs are licensed by state regulatory agencies and must meet specific education, examination, and experience requirements. The CPA designation is a hallmark of credibility and competence in the accounting world. CPAs can perform various services, including auditing financial statements, tax preparation, and financial consulting. Their ability to represent clients before tax authorities, like the IRS, sets them apart from non-certified accountants. Obtaining a CPA designation requires passing a rigorous four-part exam, making it one of the most respected certifications in finance.

Examples of a Certified Public Accountant

CPAs work in diverse industries and hold various roles. Some examples include:

• Tax Advisors: Specialise in helping individuals and businesses comply with tax laws, optimise their tax liabilities, and plan for the future.
• Auditors: Examine financial statements to ensure accuracy and compliance with regulations. Auditors play a vital role in ensuring transparency and accountability.
• Forensic Accountants: Investigate financial fraud, embezzlement, and other financial crimes.
• Financial Consultants: Provide strategic financial advice to businesses on growth, restructuring, or budgeting.

Each of these roles highlights the wide range of expertise and value that CPAs bring to the table.

What are the Key Roles and Responsibilities of a CPA?

A CPA wears many hats in the finance world. Here are some of their key responsibilities:

• Auditing: CPAs ensure that financial statements are accurate and comply with accounting standards.
• Tax Planning and Preparation: CPAs help clients minimise tax liabilities and prepare annual tax filings.
• Consultation: Provide financial advice on business decisions, mergers, and investments.
• Compliance: Ensure that businesses and individuals meet financial regulations and reporting standards.
• Forensic Accounting: Investigate fraud and financial misconduct.

These roles make CPAs essential to the functioning of both small businesses and large corporations.

Required skills for CPA

CPAs must keep themselves informed about the latest tax updates, regulatory changes, and developments introduced by the Financial Accounting Standards Board (FASB). Beyond accounting expertise, a successful CPA should also demonstrate the following key skills:

• Leadership
• Critical thinking
• Written communication
• Technical proficiency, including expertise in Excel and business intelligence tools

Difference Between CPA and Accountant

A CPA holds more legal authority and is often considered more prestigious than a general accountant due to their ability to perform audits and represent clients in legal tax matters.

How to Become a CPA?

Becoming a CPA involves several steps. Here is an overview:

• Educational Requirement: Obtain a bachelor's degree in accounting or a related field.
• Pass the CPA Exam: The CPA exam is divided into four sections: Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).
• Gain Experience: Complete 1-2 years of work experience under the supervision of a licensed CPA.
• Obtain CPA License: Once the exam and experience are completed, apply for the licence in your state.

CPA Exam

The CPA exam is known for its rigour and includes the following four sections:

• Auditing and Attestation (AUD)
• Business Environment and Concepts (BEC)
• Financial Accounting and Reporting (FAR)
• Regulation (REG)

Candidates must pass all four sections within 18 months, which add to the challenge of obtaining this certification.

CPA Career Paths

CPAs have a wide range of career options, including:

• Public Accounting: Auditing and tax services.
• Corporate Accounting: Managing the finances of companies.
• Government Accounting: Ensuring public funds are used effectively.
• Forensic Accounting: Investigating financial crimes.

CPA Ethics

CPAs are bound by strict ethical guidelines, ensuring their commitment to transparency and honesty. Ethical issues like the Enron scandal have highlighted the importance of maintaining integrity in financial reporting.

Benefits of a CPA license

Obtaining a CPA licence offers numerous advantages, including job security, career opportunities, job satisfaction, and higher earning potential. In India, as global businesses increasingly seek qualified professionals, CPAs are in high demand. The profession faces a significant talent shortage, with fewer students pursuing accounting and even fewer opting for CPA qualifications. Compounding this issue, many members of the American Institute of Certified Public Accountants (AICPA) are nearing retirement, creating even greater demand for skilled CPAs. This shortage ensures exceptional job security and opens doors to various opportunities across industries.

A CPA licence allows you to explore diverse roles in financial accounting, auditing, and taxation, with greater freedom to work independently. It also makes you a preferred candidate for top organisations, including multinational firms, government bodies, and private companies. Additionally, CPAs can establish their own businesses, offering services to individuals, companies, and non-profits. Licensed CPAs are often considered for senior-level positions such as CFO, reflecting their expertise and qualifications.

A CPA licence also enables you to perform specialised tasks, offering more meaningful and fulfilling work. If you enjoy client interactions, you can assist with financial planning or represent clients in tax matters. For those with a passion for strategy, the role offers opportunities to delve into financial analysis and planning.

Moreover, CPAs typically earn significantly more than non-licensed accountants. In 2023, the average CPA salary was ₹96,752, with a range between ₹60,874 and ₹150,612, while non-CPAs earned between ₹47,138 and ₹82,167. Factors such as experience, location, and role also influence salary, so these should be considered when evaluating earning potential. With growing global demand and lucrative prospects, a CPA licence is a valuable asset for aspiring accountants in India.

MBA vs. CPA: Which is the Better Path?

While a CPA focuses on the specifics of accounting and tax law, an MBA offers broader business management skills. Your choice depends on your career goals—whether you want to specialise in accounting or aim for a more general management role.

Conclusion

Becoming a CPA is a rewarding career choice with a variety of paths to follow. Whether you aim to specialise in tax, auditing, or consulting, the CPA designation opens doors to numerous opportunities. For finance professionals in India, securing a CA Loan through Bajaj Finance can help you grow your practice and achieve greater success.