Certified Public Accountant Definition
Define CPA in Simple Terms
A Certified Public Accountant or “CPA” is the designation for public accountants who are licensed to practice in the United States.
A public accountant is an individual who performs accounting-related work on behalf of external clients, often for regulatory purposes.
The interests and standards of the profession are centrally guided by the American Institute of Certified Public Accountants or “AICPA.”
Subscribe to the Finance Strategists YouTube Channel ↗
How Do CPAs Work?
CPA’s play an important role in giving confidence to investors to trust the financial statements they are analyzing.
CPA License Requirements
Each state has their own CPA board which determines the requirements of obtaining licensure, but typically, CPAs must have the following:
- 120-150 school credit hours
- One-full year of experience with an established CPA firm
- Pass four standardized tests in the areas of Financial Accounting, Taxation, Auditing, and Business Concepts
Sarbanes Oxley Act of 2002
The independence of CPA’s in relation to the clients they serve is one of the most important foundations of the profession.
In 2002, independence was compromised as a “Big Five” firm, Arthur Andersen, willfully destroyed documentation which proved Enron’s accounting fraud and became one of the largest accounting frauds in history.
In response, regulators passed the Sarbanes Oxley Act of 2002 which largely shapes the CPA-client relationships and auditing standards of today.
Careers for CPAs
Because of their knowledge of financial accounting and critical thinking skills, common career paths for CPAs include CPA Firm Partner, Controller, Chief Financial Officer, Consultant, Financial Analyst, and Forensic Accountant.
Connect with Licensed Financial Advisors
Finance Strategists collaborates with first class financial firms across the country to guarantee that you are connected only to the best financial advisors in the arena. Click on the link to connect to a financial advisor in West Hartford, CT. If you live outside the area, please check out our financial advisor page instead.
Certified Public Accountant Definition FAQs
About the Author
True Tamplin, BSc, CEPF®
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True contributes to his own finance dictionary, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.