A Certified Public Accountant or CPA is different from a regular accountant. These professionals have gone through additional studies to pass the rigorous examination for CPA licensing. These professionals have legal licenses to perform audits. They have extended knowledge of tax codes and recognition from the IRS. They are basically the top professionals in this field.
Audits and reviews
This is the very first thing that makes the CPAs and accountants different. CPAs are licensed to carry out audits and reviews while accountants are not. Law requires every firm to have audits done the CPAs investigate the financial statements and records of an organization to make sure that there is no misrepresentation. In many cases, even non-profits need to get an audit done. A non-profit organization receiving federal grants above a specific threshold or getting certain revenue is bound to have audits. While the private organization does not require an audit, one can choose to have an audit done by a CPA. In the case of private organizations, audited books help in securing funding and loans, attracting investors along pointing out fraudulent accounting practices. IRS audits businesses as tax time rolls out. Having the audit done by a licensed CPA helps to reduce the chances of IRS auditing. If a business owner feels that an audit is not necessary, they can always choose to have a review done. The reviews are cheaper than audits as these are also less extensive. Though reviews are not as in-depth as audits, still these can help to provide accurate records to the stakeholders. Another thing that the CPA can do is to file report with SEC or Securities and Exchange Commission.
Tax preparation and business tax returns filing is an important part of every business. Non-certified accountants are not eligible for this task. If your business is having some complicated tax returns issues, CPAs are the ones who can actually handle this kind of thing with their extensive knowledge of tax codes. As these professionals are recognized by IRS, their help is vital for any dispute with the IRS. They are eligible to represent a business before the IRS. If you ever find your business in tax related troubles, it is better to hire Certified Public Accountant Pasadena.
Regular accountants have the capability to effectively draw financial reports and statements. But they do not have extensive knowledge of GAAP or generally accepted accounting principles. Equipped with this knowledge, the CPAs can even optimize a financial report which leads to better decision making.
Tax can easily become a burden in the future for a business if the financial decisions are not made properly. Financial decisions can be made with tax codes in mind only when a person has extensive knowledge of tax regulations and codes. CPAs have this knowledge and help to planned and inevitable capital losses. This process of incurring reduces the liability bringing down the burden of tax. Over time proper tax planning can actually help to save in future.