In public accounting, the CPA serves many clients as an objective outsider or in an advisory capacity. Currently, there are over 46,000 public accounting firms in the United States ranging in size from a small local accounting practice to a large international CPA firm. Public accounting services include but are not limited to the areas listed below:
This is one of the hot growth areas for accountants in public accounting. The forensic accountant looks beyond the face value of accounting records to determine if fraud has been committed. Also known as an investigative accountant or fraud auditor, the forensic accountant searches for evidence of criminal conduct or assists in the determination of, or rebuttal of, claimed damages. Investigative accountants are also being called in to advise companies on whether to declare bankruptcy or take the necessary steps to remain solvent. In addition to investigative accounting, the forensic accountant may also be called upon in the legal field, assisting lawyers in the litigation process.
This is one of the hot growth areas for accountants in public accounting. As businesses take a greater interest in environmental issues, accountants have been getting involved in everything from environmental compliance audits and systems and procedures audits to handling claims and disputes. Utilities, manufacturers, and chemical companies are particularly affected by environmental issues. As a result, companies in these fields have increasingly turned to accountants to set up a preventive system to ensure compliance and avoid future claims or disputes, or to provide assistance once legal implications have arisen.
Personal Financial Planning
As personal financial planners, accountants provide assistance to individuals and companies in identifying financial objectives and counseling on the risk, liquidity, management and tax characteristics of investments. Personal financial planning services include helping clients better manage their money through debt reduction and expense control, developing investment strategies and asset allocation plans, tax consulting, insurance analysis and planning, retirement planning, and minimizing estate and gift tax burdens.
Information Technology Services
The growth in information technology has created many job opportunities for accountants with strong computer skills. There is a tremendous need for professionals who can design and implement advanced systems to fit a company's specialized needs. Accountants skilled in software research and development (including multimedia technology) are also highly valued.
Assurance services is defined as services provided by a CPA that improve the quality of information, or its context, for decision makers. Such information can be financial or non-financial, about past events or conditions or about on-going processes or systems. It can also be direct information about a product or indirect information about someone else's assertion about a product. Assurance services allows the CPA to use his/her analytical and information-processing expertise in a new way. Based on market research, everyone from business owners to ordinary consumers can find value from CPAs who provide these type of services. Electronic commerce, elder care, comprehensive risk assessment, entity performance measurement and information systems quality assessment are just a few examples of assurance services areas.
Tax Advisory Services
With the ever-changing tax laws and the growing complexity of business, tax professionals are involved in everything from preparing tax returns to reorganizing a multinational company's domestic and foreign operations in a manner that takes into consideration such factors as U.S. and foreign taxes, cash investments, dividends, and economic growth.
The tax specialist must deal with a variety of tax problems and opportunities in three primary areas of tax practice-tax consulting, tax compliance, and representation of clients before the Internal Revenue Service (IRS). In addition to supplying technical competence, the tax specialist must exercise good financial judgment and creativity in order to provide constructive solutions to complex tax problems. Therefore, a thorough understanding of the client's business, investments, and personal objectives is required, as well as a thorough understanding of the tax laws and their applications.
CPAs are often requested by individuals, businesses, financial institutions, not-for-profit organizations, and government agencies to offer objective advice and technical assistance about a variety of business situations. Some common consulting engagements might be computerizing a company's accounting and reporting function, projecting a company's growth using trend analysis techniques, implementing an internal control system, facilitating mergers and acquisitions, assisting with production and marketing techniques, and providing general suggestions on improving overall operating procedures. Other important growth areas of consulting CPAs are involved in include litigation support, business valuation, strategic planning, succession planning for family- owned businesses, compensation and benefit plan design. Consulting services provided by CPAs may range from brief discussions with clients in the form of consultations or may involve larger initiatives such as implementation, transaction or support services.
This is one of the hot growth areas for accountants in public accounting. Cross-border transactions are becoming commonplace due in part to the dismantling of closed economies in Eastern Europe and Latin America, the passage of the North American Free Trade Agreement (NAFTA) and the General Agreement on Tariffs and Trade (GATT), as well as economic growth in areas such as the Pacific Rim. Functional skills needed in a global economy include an understanding of international trade rules, accords, and laws, cross-border merger and acquisition issues, and foreign business customs, cultures, and procedures. Multilingual skills are also important.
Auditing is one of the most important and best known services provided by CPAs in public practice. To better protect consumers and investors, the Securities and Exchange Commission (SEC) requires every publicly-held company to issue an annual financial statement. These financial statements are examined by an independent CPA and the results are referred to as an "audit." The CPA's role as an auditor is to examine a company's financial statements in order to assure stockholders and other financial statement users that a company's financial position is reported fairly.
Although privately-held companies are not required to have annual audits, many do so anyway. Privately-held companies that do not undergo an annual audit often engage CPAs to conduct a "review" or "compilation" instead. Both involve an examination of a company's financial statements, although a review contains less assurance than an audit while a compilation contains no assurance.