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| THE CPA CREDENTIAL: NOT ALL ACCOUNTANTS ARE CPAs
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While most people use the terms "accountant" and "CPA" interchangeably, there is a big
difference.
The CPA credential carries enormous weight in business and financial circles.
CPAs are considered some of business' most trusted advisers, according to a recent survey
conducted by the American Institute of CPAs. Specifically, when small business owners
were asked how often they rely on outside business counsel, half said they rely on their
CPA "always" or "often," ranking just slightly behind one's spouse or family member.
This trust is not surprising, considering the strict requirements to enter and stay in the
profession. Achieving CPA status takes intelligence, ethics, integrity and lifelong
commitment.
First, candidates must make it through some of the toughest business courses
at their colleges or universities. After graduation and a year of real-world corporate experience,
they must pass a grueling, two-day test of business, auditing and general accounting skills.
Attesting to the exam's difficulty, only 20 percent of Marylanders who attempt the exam
each year pass — and many of those successful candidates are taking the exam for the second,
third and fourth time.
The CPA exam was developed in the early 1900s to ensure the competence of CPAs entering
the field, much as the bar exam evaluates lawyers and the medical boards test doctors.
Today, it maintains that goal and is continually revised to meet the changing demands of the
profession. And now, nearly all U.S. jurisdictions, including Maryland, have passed
legislation that will require accounting graduates to complete 150 hours of course credits
before taking the exam. This new legislation affected those taking the exam for the first time
in Maryland in November 1999.
The exam is not the only requirement. CPAs also are required to follow a strict
code of ethics and perform within the high standards of the profession. Every two
years, they must complete 80 hours of continuing professional education to keep up with the
new rules and regulations in the financial, accounting and business world.
As the profession has evolved, so have the services CPAs provide. CPAs no longer are simply number crunchers and tax preparers, but business and financial strategists who help
chart the paths of individuals and businesses. Individuals turn to their CPAs for tax and
financial planning services, investment advice, estate planning and more. Businesses are
tapping CPAs to not only manage finances and taxes, but also to determine profitable new
product lines, seek creative financing opportunities, help diversify investments and provide a
variety of other consulting and business services.
As technological advances, globalization,
new laws and regulations, and marketplace competition continue to complicate financial and
business decisions, CPAs will be called upon to analyze information, determine effective
financial and business strategies, and help individuals and businesses achieve profitability.
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