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Even if you are currently a practicing accountant, once you have met CPA license requirements, you will take on the primary responsibilities of a Certified Public Accountant. The most critical function performed by CPAs is to audit the operations and financial statements of both public and private companies, rendering a “certification” that their income statement and balance sheet “fairly” present the results of their operations for the period being examined. While the “opinion letter” (which is the result of their examination) is quite brief, usually only one to three pages, the work leading up to it is extensive.
During an audit, hopefully leading to a “clean” opinion letter, all books, records, accounting entries and related documentation is examined and verified by CPAs. Any apparent discrepancies must be examined and corrected, if possible, before completion of the audit. After all documentation, books and records have been verified and adjusting entries have been made and approved, the CPAs issue an opinion letter. It can be totally without additional comment or might have one or more items noted, often called “subject to” conditions, that the auditors found that may not be in compliance with Generally Accepted Accounting Principles (GAAP), upon which they cannot give a positive comment.
The other important area a CPA tackles is taxation. Often the CPA firm that undertakes the audit of a company is also responsible for all tax issues, including sales tax, income tax and tax planning for future minimization of company taxes. In larger firms, the same CPAs that perform the audit are replaced by tax specialists to process those issues for the company. In smaller firms, the CPA handling both primary issues may be the same person to maintain continuity and positive client relationships.