What Is a CPA?
Updated December 3, 2024
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Certified public accountants (CPAs) prepare, organize, and analyze financial records that their clients legally must turn in to the government. This includes filing tax returns and submitting records to investors and the U.S. Securities and Exchange Commission.
Public accountants can work for individuals, companies, nonprofits, or the government. They may specialize in areas like taxation, financial reporting, consulting, auditing, and forensic accounting. Some CPAs are self-employed, and most work full time. They frequently work overtime during busy times of year, including tax season.
Not all public accountants are CPAs. CPAs are certified accounting professionals who must meet specific requirements and hold a professional license that authorizes them to work as a CPA in their state. CPA requirements vary by jurisdiction.
Explore the rest of our guide to learn about typical CPA job tasks and responsibilities, CPA areas of expertise, and CPA salaries and career outlook. We also explain the education and experience requirements needed to become a CPA.
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CPA Duties
CPAs prepare tax returns, conduct audits and investigations, help clients make financial decisions, and review records to ensure accuracy. They create budget reports, track expenses and profits, and make recommendations that can save their clients money.
Specific duties and day-to-day tasks may vary by job, area of specialty, and employer. Below, we describe five key CPA responsibilities.
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Examine and Organize Financial Documents
CPAs examine financial records for accuracy and to ensure that the organization follows all relevant laws and regulations. For example, they verify that clients pay their taxes correctly to avoid being audited. -
Find Cost-Saving Measures
CPAs use their financial and accounting knowledge to find ways for their company or clients to save money, increase profitability, and reduce costs. This may include determining how an organization or individual can reduce their tax liability. -
Perform Audits
Auditing involves comprehensive reviews of financial statements and documents. It aims to validate an organization's financial reporting and ensure full compliance with applicable laws. CPAs sometimes elect to earn auditing certifications, such as the certified internal auditor credential. -
Make Financial Recommendations
All CPAs offer financial recommendations, but those specializing in personal financial advising may help their clients with long-term financial planning, including estate planning and retirement decisions. -
Conduct Investigations
CPAs who specialize in forensic accounting investigate potential financial crimes like fraud. This includes analyzing financial records for discrepancies and can entail working with law enforcement if criminal activity is found.
Key Hard Skills for CPAs
- Accounting Knowledge: CPAs need to understand the fundamental principles of accounting to perform basic accounting tasks like inputting financial data, calculating tax payments, recording payments, and preparing financial statements. CPAs need specialized public accounting knowledge.
- Mastery of Current Tax Law: Because CPAs specialize in public accounting, they need a strong understanding of tax rules and regulations. This helps them prepare and submit tax returns, lower tax liabilities, and find deductions.
- Proficiency With Accounting Software: CPAs must stay up to date with contemporary accounting software to perform basic public accounting tasks.
- Understanding of Basic Business Skills: As workers in a business subfield, CPAs and all other accountants need foundational business skills. These skills can help them communicate with clients and may help them advance in their careers.
Key Soft Skills for CPAs
- Communication: CPAs need strong written and verbal communication skills to work effectively with clients and coworkers. They must be able to express complex financial information in language that people outside the field can easily understand.
- Organization: CPAs need excellent organizational skills because they need to keep track of many different clients and financial documents. Being unorganized can lead to costly errors.
- Analytical and Critical Thinking Skills: Strong analytical and critical thinking skills are crucial for CPAs whose job duties include analyzing documents for potential problems and making recommendations that adhere to best practices.
- Attention to Detail: CPAs must be detail-oriented. Making one small numerical mistake can cause big problems for a client, including miscalculation of profits or losses or even legal trouble.
CPA Areas of Expertise
CPAs can specialize in a field or industry that caters to specific needs. Below, we describe four CPA specialties: taxation, management accounting, financial reporting, and forensic accounting.
Taxation
CPAs specializing in taxation help their clients prepare and file tax returns, reduce their tax burden, and avoid making mistakes that could lead to costly penalties. All CPAs need some knowledge of tax law, but specializing in taxation means this will be the focus of your work.
Many CPAs who specialize in taxation start as general accountants and develop tax expertise over time. However, if your education includes a significant amount of taxation coursework, you may be able to go straight into this specialized position. CPAs who specialize in taxation can advance to roles such as management accountants or financial managers.
Common Job Titles
- Tax Accountant
- Tax Preparer
- Financial Planner
- Tax Advisor
- Tax Consultant
Management Accounting
Management accountants specialize in translating financial information into actionable insights that businesses can use to their strategic advantage. They apply forecasting models, evaluate key performance indicators, analyze budgets, and examine financial data to identify both inefficiencies and opportunities.
As a management accountant, you can pursue a certified management accounting (CMA) credential from the Institute of Management Accountants. CMAs are recognized experts in applying accounting principles to guide business growth and optimize operations.
Common Job Titles
- Business Advisor
- Certified Management Accountant
- Financial Manager
Financial Reporting
Many corporate accounting positions and jobs in accounting firms focus on financial reporting duties. Financial reporting is the process of compiling, verifying, classifying, organizing, and documenting an organization's financial data during a specified time period. For example, publicly traded companies must report their financial results quarterly and annually.
In the United States, financial reporting specialists typically follow a set of guidelines known as generally accepted accounting principles. If you work outside the United States, you are more likely to use the International Financial Reporting Standards system.
Common Job Titles
- Financial Analyst
- Financial Controller
- Staff Accountant
- International Accountant
Forensic Accounting
Forensic accounting focuses on the investigation of potential fraud and financial crimes, such as embezzlement. In addition to working with law enforcement agencies and providing accounting expertise in legal proceedings, forensic accounting professionals also examine financial documents to help resolve civil disagreements outside of the courtroom.
Forensic accountants usually start as general accountants and move into forensic accounting roles over time. They need strong analytical, investigative, business, and technical accounting skills. CPAs who specialize in forensic accounting can sometimes move up into management accounting.
Common Job Titles
How to Become a CPA
CPAs need at least a bachelor's degree in accounting or a similar field, and they must complete 150 credit hours, including accounting and business classes. Specific requirements for CPA licensure vary by state.
No states require a graduate degree in accounting. However, an accounting master's degree can help students meet the CPA education requirement of 150 credits since most bachelor's programs only require 120 credits. Accounting coursework covers topics like finance, auditing, and taxation.
To receive a CPA license, applicants must pass the CPA exam administered by the National Association of State Boards of Accountancy.
CPA Salary and Career Outlook
As of October 2024, Payscale reports that the average annual salary for a CPA is $79,080. Comparatively, the average annual accountant salary is $58,260. Certification can lead to better job opportunities and higher salaries.
The Bureau of Labor and Statistics anticipates steady growth for accountants and auditors, including CPAs, with 6% projected job growth between 2023 and 2033.
Career Spotlight: Jeanie Gorlovsky-Schepp, CPA
Why did you become an accountant? What initially interested you about the field?
As a college student, I learned and liked that accounting is the basis and building block of many financial and business decisions. It seemed to be a great field to kick off my business career. And I liked that there are lots of different job options and that I would not be unemployed after graduation.
Accounting also makes practical sense to me; it's not just theoretical. I like that the debits always have to equal the credits, and the balance sheet has to balance.
What education did you need to pursue this career? How did it prepare you for your current role?
I received my bachelor of business administration in accounting at the Isenberg School of Management at the University of Massachusetts Amherst. The teachers there are wonderful and really prepared me well for a future in accounting. We learned a lot about financial accounting and also learned to audit.
The CPA is an important credential to me, and I still get continuing education credits every year to keep up with our state requirements. This helps me keep current on issues happening in the industry and new accounting pronouncements.
As a self-employed consultant, I still use all the basic building blocks of accounting that I learned in college, pursuing my CPA, and working in public accounting.
What was the job search like after graduating with your degree?
One of the things I really like about accounting is that there are many different jobs available. I decided that I wanted to start my career in public accounting in order to learn a lot in a short period of time and be exposed to different types of clients and different areas of accounting. I was fortunate to get a job offer from a midsize CPA firm in New England while I was a senior in college, and I spent many years working there as an auditor.
“There are some workplaces that don't want to consider someone for an accounting role who is not a CPA.”
Why did you decide to become certified? How does this credential differentiate your skills from other public accountants?
A CPA is a very valuable credential, and I wanted to position myself well in the marketplace for various jobs. I decided in college as an accounting major that I wanted to try to get my CPA as soon as I could. I took the CPA exam right before graduation.
I've met plenty of great accountants who don't have a CPA, but in my experience, having the credential really helps to advertise your expertise and makes a difference in your compensation and career options. There are some workplaces that don't want to consider someone for an accounting role who is not a CPA.
What was the career path that led you to this position? What do you think helped you most on your journey to becoming a CPA?
For many years, I worked in public accounting as an auditor and consultant. I really enjoyed working on various types of projects with different clients. I learned a lot from each of my coworkers and clients. I worked with many different not-for-profit organizations and found that I have a passion for mission-driven organizations.
In 2021, I decided to take the next step in my accounting career journey, and I am now a self-employed accounting consultant and business advisor. I was able to put my technical accounting and client service skills to use in working with my own clients. It's been really interesting to see accounting from another perspective as part of an internal accounting team.
What does a typical day at work look like for you?
I am currently working as an outsourced controller for a not-for-profit. Today, my day consisted of reviewing the monthly close done by the staff accountant. We then had a Zoom call to discuss our questions for each other and the next steps toward finishing the close.
What are some of the most rewarding aspects of working as a CPA? Some of the most challenging aspects?
As a CPA, it's very rewarding to be able to make a direct and positive impact on a business client, especially with a not-for-profit that makes a real difference in our community. I also really enjoy the client education aspect of my work when I can help client accounting team members learn additional skills or be a resource to answer questions and resolve problems.
As a CPA, I find it can, at times, be challenging to manage various competing projects and deadlines. Also, especially during [the] unusual COVID-19 times, it [was] challenging to find the optimal balance between personal and professional priorities. It continues to be a growth area for me.
What do you think is the most important skill CPAs need to succeed?
One important quality in being a successful CPA is genuinely caring about your clients and their businesses. I love working with not-for-profit clients for that very reason — I feel like I'm really contributing to their mission by helping them have good financial information on which to make smart business decisions.
What advice would you give to students considering your career?
Accounting is a great career. It's a great fit for different types of personalities. I am an extrovert, which many people don't think of as a typical characteristic of an accountant, but I find it helpful in establishing a bond with my clients. I have been lucky to have a lot of long-standing, wonderful client relationships.
I would encourage students starting out in accounting to spend some time investigating their career options and talk to other people in the industry to get a sense of the best career fit for them. There are a lot of really interesting jobs and possibilities out there. Talk to as many different people as you can.
Accounting is also a great second career for more experienced people looking to make a change.
Jeanie Gorlovsky-Schepp
Jeanie Gorlovsky-Schepp, CPA, is an accounting consultant and business advisor with a passion and expertise for working with not-for-profit organizations. Jeanie lives in Boston, Massachusetts, with her husband and son and enjoys collaborating with her clients on educating and training their accounting teams.
Questions About the CPA Job Description
What is the role of a CPA?
CPAs use their public accounting and financial knowledge to help clients save money and avoid breaking the law. They help prepare tax returns, analyze financial documents, and provide financial advice.
Where can a CPA work?
CPAs work in various settings depending on their specialization. Potential work environments include nonprofit groups, companies, and government agencies. Some CPAs are self-employed and work from home.
What specializations can CPAs have?
Common CPA specializations include financial reporting, management accounting, taxation, financial planning, consulting, and auditing. Other CPA specialties include estate planning, international accounting, and forensic accounting.
What is the difference between a CPA and a bookkeeper?
Bookkeepers and CPAs both provide financial expertise to organizations or individuals. However, bookkeepers focus more on administrative tasks like recording data related to payroll and invoices. CPAs may perform some bookkeeping duties but also focus on bigger issues like tax preparation and financial advice.
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