How do you choose a CPA or Auditing firm?

Having someone to trust in terms of your business finances will make a lot of difference in its success. For this, a CPA firm can provide you with the best financial manager. CPA's can guide you in your decision making and give you an overview on what will be good or bad financial strategies. They can also be your confidant in terms of your most confidential corporate information.

So how do you know you're hiring the right CPA? Here are some things to consider before hiring or contacting a CPA firm:

1. Your Needs

Are you looking for a firm that will do a service or two for you such as IRS preparation or bookkeeping? You can always hire a company that specializes in taxes. Or if you are looking for a complete service package, then find a firm that offers this. Big companies often opt for packages while smaller ones usually settle for less comprehensive services.

2. Recommendations

Asking for advice on where to find a reliable CPA firm may be considered. Asking friends or family members about CPA firms they may know will give you an idea about these firms' accomplishments and track record. You may also search the Internet and look for client reviews.

3. Technological Readiness

Gone are the days when companies only used pen and paper to keep track of your records and files. With a technologically capable CPA firm, you can expect faster, more accurate and more reliable output.

4. Credibility and Reliability

Companies that are credible and reliable are hard to find. If you're interested in the services of a CPA firm, try to ask around and investigate about their background such as how long they have been in the business and which accounts they have handled. By looking into the firm's previous work, you will get some pretty good ideas about what a possible cooperation with them will be.

Choosing a CPA firm will not be easy. After all, you'll be allowing this company to look into your confidential financial information. Many will claim they offer the best service but it's all up to the work you put in when trying to find the best one on the lot. You do need a lot of patience when discerning which CPA firm is most worthy of your trust.

Source: Possibility Mentality

How do I hire an accountant or CPA for my small business?

First you need to assess your business needs and know the difference
between a CPA, Accountant and Bookkeeper, although they do overlap,
generally this order also reflects highest to lowest skill and hourly rate.

CPA (Certified Public Accountant) is licensed by state following exam and after completing some level of work experience (which varies by state), but most often requires public accounting work vs. private accounting practice.

Accountant - Bachelor's degree in accounting and work experience, more often based on working at a company where they do that one company's
accounting on a daily basis vs.  public accounting as hired CPA firm does.

Bookkeeper: Some have certifications, but this work is often done by folks
with zero experience and is also done by some CPA's or anyone in between,
including business owners, their wives, mothers or sons or daughters.

Most companies require the following:

CPA-  You might need to speak to one before you begin business
to help you learn/decide on type of legal entity and to help you setup, ie,
Corporation, S Corp, LLC, Sole Proprietor, etc. That is a one-time charge.

CPA - You probably need to have one to prepare your income tax returns annually and possibly to advise you on making quarterly estimated taxes,
but if you are reasonably intelligent and responsible they can tell you how
to figure out how much to pay each quarter at the start of the new year.
So this is an annual expense and maybe quarterly if you are lazy or lame
or have more money than time and prefer to just pay and do what they say.

CPA or Accountant (not CPA but with bachelor's degree and experience) -
Can advise and assist you with selecting and setting up accounting system and writing some accounting policies and procedures to be followed daily.
This is important since it sets the stage for your accounting going forward.

CPA, Accountant or Bookkeeper or You can do the day-to-day accounting, most of which is bookkeeping and here is where the variations come in and
the decisions you have to make, and where things may change over time as
you grow and either have more volume of transactions to be processed or
have less time to do yourself and/or more money to pay someone else to do.

So you could potentially want to hire one of each of these three or you can overpay CPA to do all as some do, or the opposite which is more common, which is to try to save money and do yourself or pay unqualified person as bookkeeper and have them try to do all and mess it up and then pay more
than cost of CPA to clean everything up later, this is most expensive option.

The correct answer will differ for every company and changes over time and depends on your immediate and short term goals, and requirements which
include the type of business, start-up plans and what you have done so far.

For example, you may have already done step one of setting up your entity
and may already have a CPA who does your personal income taxes that you trust and like and who could also do your business income tax returns and they may be able to recommend an accountant or bookkeeper or their firm
may also provide those services, but just be aware of the difference in rates.

Source: Theresa Wilt

What's the difference between a CPA and a tax attorney?

As others have stated, a CPA is a certified public accountant. There are two general environments CPAs work in: public accounting and corporate (private employment with a single employer.) In public practice they work for CPA firms who offer financial audits, tax return preparation and advice, and other services. A CPA in a corporate environment should be a well rounded accounting professional skilled at maintaining a set of books and records useful in answering financial and tax questions. The system should produce financial statements, management reports and the beginning balances for income tax returns. Additionally, the CPA should be knowledgeable about the internal control structure and how to set an environment that will pass a financial audit. CPAs engaged in private practice are attempting to produce financial information of a historically nature.

Many, but not all CFOs, are CPAs. CFOs are responsible for getting all of the standard accounting tasks discussed before done and other more prospective financial tasks such as asscertaining what is the best capital structure and securing the financing the company needs. Also, the cash and other assets of the company must be managed. A CFO would also put together the overall tax strategy of the company in concert with its external advisors. Think of it as the bridge between simply recording and reporting to engaging in transactions. The goal of a CFO is to predict and maximize shareholder return.

A tax attorney is an attorney who specializes in taxation. When I am selecting a tax attorney, I look for one who is either also a CPA or one who has completed an LLM in taxation. Why? Because the basic attorny skills do not translate well to taxation. The typical role for an attorney in a corporate environment would be to analyze the law around a proposed position and usually supervising external attorneys engaged in litigation representing the company as either a plaintiff or defendant in causes of action. Tax attorneys are typically limited to advice regarding positions to take or been taken on returns to taxing agencies. These rules are very voluminous and most attorneys know contract or some other law that does not apply to those rules. If the position or failure to perform some duty to the taxing agency results in controversy, then the tax attorney would represent the company to obtain a the best outcome for the issue at hand.

To muddy the waters a bit, there are CPAs who are tax specialists. When one talks to them, they sound like a mutant cross between an accountant and attorney. They usually have graduate training at reading the source documents, much as an attorney, and applying the law. They usually hold a graduate degree with some variation of master of taxation or a specialized accountancy masters degree. These professionals are good at managing the filings and strategies and are most of what I have seen in corporations. They coordinate with the legal department should a position be questionable or at controversy.

As to your question would a successful company have both? I would say both, with some caveats. First, the size of the company. SG&A staff does not produce revenue, but adds to the overhead. Only companies of sufficient size to have ongoing need have both. Medium sized companies tend to have an accounting staff of CPAs, perhaps a tax group of tax accountants (both under the CFO) and an in house general counsel who handles the legal aspects. Smaller companies, or ones with little controversy, tend to sub out all three.

Source: Tom Harrington

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