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What Is a CPA Accountant and Why You Might Need One

  • Writer: DM Monticello
    DM Monticello
  • Jun 10
  • 7 min read

When you ask for a CPA accountant, you're referring to someone who holds the Certified Public Accountant (CPA) credential—among the highest in the accounting profession. Understanding what it means and why it matters can help you choose the right financial professional.



What Is a CPA?

A Certified Public Accountant is a licensed professional who has met strict education, examination, and experience criteria set by a U.S. state board of accountancy found.com+1msllc.com+1investopedia.com. Candidates typically need:

Notably, only CPAs can sign audited financial statements or represent clients before the IRS in tax matters franklin.edu+11becker.com+11en.wikipedia.org+11.



CPA vs. Regular Accountant

All CPAs are accountants, but not all accountants are CPAs adp.com+4becker.com+4coursera.org+4. While bookkeepers and general accountants handle basic finance tasks, CPAs are qualified to:

This credential reflects a higher level of authority, expertise, and ethical responsibility investopedia.com.



What CPAs Do: Core Responsibilities

CPAs perform a wide range of services for individuals, businesses, and organizations:

1. Tax Preparation and Planning

They handle individual, business, and corporate tax filings, identify deductions and credits, structure legal entities, and address state and federal obligations .

2. Audits and Attest Services

CPAs conduct external audits and provide opinions on financial statement accuracy and compliance with GAAP .

3. Advisory and Consulting

From cost analysis and budgeting to financial forecasting, CPAs offer strategic guidance to support business decisions msllc.com+15bls.gov+15becker.com+15.

4. Financial Reporting

They prepare statements that satisfy stakeholders such as investors, boards, or lenders investopedia.com+1becker.com+1.

5. Compliance and Risk Management

CPAs help ensure ongoing adherence to tax, regulatory, and accounting standards—helping to avoid penalties and fraud .



Why Hiring a CPA Matters

Credibility and Trust

Each CPA must adhere to standards set by organizations like the AICPA and state boards . This ensures your financial information is accurate and ethically handled.

Limitless Representation

Only CPAs can officially represent clients before the IRS during audits or disputes proadvisorcpa.combecker.com+1en.wikipedia.org+1.

Access to Specialized Services

For financial audits, corporate tax planning, or structured debt, only CPAs provide the legal and professional depth required .

Long-Term Value

CPAs not only file your taxes but also help you build financial strategies that optimize cash flow, reduce taxes, and manage risk.



Signs You Should Hire a CPA

  • You own a business, own rental property, or earn freelance income

  • You need help preparing audited or reviewed financial statements

  • Your tax situation involves multiple states or international income

  • You’ve received an IRS audit notice or expect one

  • You seek expert advice on business structure, financing, or investments



8 Fast Questions to Vet a CPA

These targeted questions can help you assess a CPA's relevance and competence:

  1. Are you licensed in [your state]? (Verify via state board)

  2. What are your primary service areas (tax, audit, advisory)?

  3. Do you have experience with clients like me (e.g., small business, real estate)?

  4. Can you represent me before the IRS or state authorities?

  5. What is your fee model—hourly, project-based, or retainer?

  6. What accounting software and tech tools do you use?

  7. How do you communicate updates and maintain deadlines? investopedia.comadp.com+2btkcpa.com+2bulgercpa.com+2

  8. Are there any additional certifications—CMA, CFF, CGMA—that enhance your expertise? charcap.com



When You Don’t Need a CPA

Consider lighter options if your finances are straightforward:

  • Enrolled Agents (EAs)—federally licensed tax preparers who can represent clients in IRS matters becker.com+15marketwatch.com+15found.com+15

  • Bookkeeping software or basic accountants—suitable for routine tasks like simple business bookkeeping or filing basic returns

However, for higher complexity or audits, a licensed CPA adds unmatched assurance and authority en.wikipedia.org.



The Rise of AI in CPA Firms

Modern CPA firms, including the Big Four, are integrating AI to enhance services businessinsider.com. EY’s new AI initiative helps automate data entry and compliance, allowing CPAs to focus on analysis and advisory work—a sign that the profession is evolving .




How Much Does a CPA Accountant Cost?

CPA fees vary based on complexity, specialization, and location. Here’s a breakdown of what you might expect:

1. Personal Tax Returns

Service

Average Fee

Basic 1040 with W-2s

$200–$400

1040 with Schedule A (itemized)

$400–$600

1040 with Schedule C (business income)

$500–$900

State returns (CA, NY, etc.)

$100–$300

2. Business and Corporate Tax Returns

Service

Average Fee

S-Corp/LLC filing (Form 1120S)

$800–$1,500

Partnership filing (Form 1065)

$700–$1,400

Corporation (Form 1120)

$900–$2,000

3. Advisory and Audit Services

  • Financial statements review: $1,000–$5,000 depending on company size

  • Audit (external): $5,000–$50,000

  • Hourly consulting: $150–$500/hour depending on experience

Some CPAs offer monthly retainers for startups or growing companies, typically between $500 and $2,500/month.



How to Choose the Right CPA Accountant

A good CPA isn’t just a tax preparer—they’re a strategic advisor. Use this process to evaluate your options:

Step 1: Check Licensure and Credentials

Verify active status using your state’s Board of Accountancy (e.g., California CBA). Ensure they hold the CPA title and are in good standing.

Step 2: Review Their Focus Area

Does the CPA work primarily with businesses? Real estate investors? Freelancers? Nonprofits? Choose someone aligned with your financial landscape.

Step 3: Ask About Tools and Communication

In today’s digital age, CPAs should use:

  • Secure portals (e.g., Canopy, Karbon, ShareFile)

  • Tax software like Lacerte, Drake, UltraTax

  • Cloud accounting tools (QuickBooks Online, Xero)

Check how they communicate—email, Slack, client dashboards, or Zoom check-ins—and how often they provide updates.

Step 4: Compare Pricing and Engagement Models

Ask for a proposal or engagement letter that outlines:

  • Services included

  • Timeline

  • Fee structure

  • Additional charges (e.g., for audit defense or amended returns)

Transparency is a sign of professionalism.



Red Flags to Avoid

Be cautious if a CPA:

  • Promises a large refund without reviewing your finances

  • Doesn’t provide a written engagement agreement

  • Refuses to sign the return with their PTIN

  • Charges fees based on your refund size

  • Lacks any digital system for secure data transfer

A high-quality CPA will act ethically, clearly explain your obligations, and prioritize compliance.



Sample Use Cases: When a CPA Delivers Value


Case 1: A Startup Founder

Nina launched an online consulting business with mixed income—retainers, affiliate commissions, and subcontractor payments. A CPA helped her:

  • Structure an S-Corp for tax savings

  • Create a quarterly payment plan to avoid penalties

  • Track deductible expenses via Xero

  • Prepare clean financials to secure a business credit line


Case 2: A Real Estate Investor

“Ron” owns six properties in two states. His CPA:

  • Filed multi-state returns

  • Helped track depreciation

  • Managed 1031 exchange documentation

  • Integrated income with his personal return

The CPA also flagged a passive activity loss limit issue that software would’ve missed.



Checklist for Hiring a CPA Accountant

Use this to ensure you’re choosing wisely:

  • CPA license verified with state board

  • Works with clients like you

  • Strong reviews or referrals

  • Uses modern tools and cloud systems

  • Offers written scope of services

  • Available year-round, not just in Q1

  • Has no ethical or disciplinary history



CPA Career Paths and Specializations

CPA accountants don’t all follow the same path. Many specialize in specific industries or financial functions. Understanding these career tracks helps you choose the right CPA based on your personal or business needs.


1. Public Accounting

Public CPAs work for firms that provide accounting services to a variety of clients. They may focus on:

  • Audit and assurance – verifying financial statements and ensuring compliance with accounting standards.

  • Tax services – preparing returns, tax planning, and representing clients in IRS matters.

  • Consulting – advising businesses on strategy, mergers, and financial systems.

These CPAs typically work for CPA firms, ranging from local practices to large networks like Deloitte, PwC, EY, and KPMG.


2. Corporate Accounting

Also known as private accountants, these CPAs work internally for a single company. They may serve as:

  • Controllers or CFOs

  • Internal auditors

  • Financial analysts or reporting managers

They help companies manage budgets, track performance, and make financial decisions. For growing businesses, hiring a CPA with a corporate background can improve internal systems.


3. Government and Nonprofit

CPAs can also work in public service or nonprofit organizations. They ensure funds are spent properly, support compliance with grant requirements, and prepare for public audits.


4. Forensic Accounting

This specialty involves investigating financial discrepancies, fraud, or litigation support. CPAs in this field often work with attorneys and insurance firms.


5. Education and Research

Some CPAs move into academia, teaching accounting and finance or contributing to regulatory policy and professional standards.

When selecting a CPA accountant, ask about their specific background to ensure they’re experienced in your industry or situation. Specialized knowledge can mean better insights and fewer errors.



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Continuing Education and Ethical Standards

CPA accountants are required to complete continuing professional education (CPE) annually to maintain their license. This ensures they stay current with tax law changes, new accounting standards, and ethical practices. Many states also require CPAs to take courses in ethics and fraud prevention. This commitment to ongoing learning distinguishes CPAs from unlicensed accountants and reflects their responsibility to uphold public trust. When hiring a CPA, you’re choosing a professional who’s held to rigorous standards year after year.



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