CPAs and companies both want the same thing, to have accurate, detailed, and fast bookkeeping and accounting. This way, both parties maintain a “clean” slate. A clean slate in CPA terminology means a complete accounting record for every transaction and decision made. Many accounting firms strive to have the “cleanest slate” possible so that clients can rely on their financial reports for planning purposes or to make tax assessments. Objectivity is part of this.
While it’s not the CPAs job to fire anyone on your behalf, it is part of their job to look at cost vs ROI. If you’re paying a marketer to boost revenue and you like them as a person and you’re feeling confident in their abilities because every week they show conversions increasing — that’s great. But your CPA’s job is to be objective. if it turns out the marketer’s salary is costing you more than the revenue they’re bringing in, then you need to know that. And that’s a mild example. You need your CPA to acknowledge when they notice business expenses that are not expense-able, so there aren’t fraudulent tax issues in your forecast.
How To Maintain An Objective Accountant
While CPA professionals strive to uphold a “clean slate”, how do you know you’re doing it? To practice public accounting, one must meet certain standards of conduct established by different state boards. The most common CPA designation is “certified public accountant“, which indicates that the professional has met CPA standards of conduct as set forth by the accounting board of each state where he or she practices. In addition, CPA professionals may also receive other designation based on their specific areas of practice or expertise such as “finance CPA”, “asset-based CPA”, or “financial analyst CPA”.
Many small business owners do not understand the importance of financial statements and do not perform the due diligence that is needed to ensure their statements are accurate and reflect the true picture of the business. Public organizations are required to file reports with the SEC, and these forms can be very confusing to a non-technical person or a new entrepreneur.
In addition, many small business owners cannot afford the professional fees required to prepare the financial statements correctly to meet the reporting requirements of the SEC. Because of this, most business people simply rely on an accountant to prepare these documents. This is not a good practice, as a Certified Public Accountant (CPA) who specializes in financial statements can help provide objective insight into the company’s finances.
By choosing to prepare the financial statements of an organization by an accountancy firm, a business owner provides support for their organization. The CPA will use documentation and other supporting documents to provide evidence of the health of the company and will provide an objective view of the financial situation. This type of evidence will play an important role when the organization seeks capital financing and is ultimately vital to the survival of the organization. The objective evidence provided by the accountants can help the organization to secure the funding it needs to grow and thrive.