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What Is Public Accounting?

Public accountants offer their services to other companies.
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  • Written By: Osmand Vitez
  • Edited By: PJP Schroeder
  • Last Modified Date: 02 August 2014
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Public accounting represents accounting services offered to clients from small or large firms. Common services offered include tax, auditing, general accounting, and consulting services. Accounting firms may offer other services to their clients based on their needs. Most accountants working under the public accounting umbrella have a professional license, such as the Certified Public Accountant (CPA) certification. This is a universal, worldwide license that indicates an accountant has gone through a rigorous test in order to achieve this standard.

Tax services from the public accounting industry typically include the preparation of annual personal or corporate returns. CPAs in this field spend copious time learning and staying abreast of current tax law. This often involves attending seminars or other training to ensure they offer the best services possible. Tax planning offered throughout the year allows tax accountants to help companies find ways to lower their tax liabilities. Targeted tax planning may also be necessary when a company makes a major move or decision regarding its operations, such as spinning off a division.

Auditing is perhaps the most well-known public accounting service. Accounting firms will offer to come in and test a client’s accounting books for accuracy, validity, and timeliness. Publicly held companies typically need to undergo audits in order to meet government reporting guidelines. Audits involve planning and field tests to determine the scope of a client audit. After the review, the firm will release an official opinion that contains the auditor’s opinion of the company’s financial reporting.

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General accounting services offered by public accounting firms basically allow a company to outsource its financial reporting. A client will pay for professional accountants to maintain its general ledger and prepare financial statements. The client will simply forward all financial information to the accounting firm and allow the accountants to prepare it. This services works well for small companies or those unable to spend the appropriate amount of time completing accounting processes.

Consulting services are typically wide-ranging in public accounting. Professional accountants can consult with clients on a number of issues, from tax and mergers to purchases and general accounting and even employee benefit plans. Under current laws and standards, accounting firms are often unable to offer consulting services to a client in addition to auditing or general accounting services. This blurs the line between the segregation of duties. A firm that offers specific tax advice may be unable to prepare accounting information as they complete too many services for their client.

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lighth0se33
Post 4

I have a friend who is studying to become a CPA, and I think she made a wise career choice. Her husband only holds a part-time job, so the burden of being the breadwinner falls on her.

Public accounting salaries fall anywhere between $40,000 and $90,000. It all depends on where you live and who you work for, so she will have plenty of options.

This is a tough career. It involves dealing with frustrated people and their money, and that is a sensitive area. My friend can handle it, though, because she is great with people.

She will be able to support her husband, herself, and any children they might one day have. I am sure that this played a big part in her decision to study public accounting.

seag47
Post 3

I have several friends who visit a CPA each year for help doing their taxes. They have trouble understanding the jargon on the tax forms, and the CPA can translate the questions for them.

I bought a computer program to help me do my taxes, and though I'm sure it might not catch everything that an actual human would, it gets the job done. I'm pretty sure I pay a lot less for this service than an accountant would charge, and I get to do my taxes without leaving my room.

My friends are computer illiterate, so this was not an option for them. I will say that they generally do wind up getting a big sum of money back, so maybe going to an accountant isn't such a bad idea.

Oceana
Post 2

@kylee07drg - I met with a certified public accountant when I started doing some freelance work. I needed to know how much money to set aside for taxes, and she helped me come up with a plan.

She set me up to make quarterly tax payments. This would ease the strain of having to make one large payment in April when taxes came due.

Aside from this, I also put a certain percentage, based on my earnings, into a savings account to pay the rest of my taxes. This has helped me immensely, because I would not have had a clue how much I would owe otherwise.

I would definitely recommend that you visit one soon. If you don't have a good tax plan in place, you will be taken off guard by how much you will owe in April.

kylee07drg
Post 1

I think I need an accountant. I am about to start working from home, and I have no idea how I need to go about planning to pay my taxes.

I have tried reading government forms online, but they create more confusion in my mind than they clear up. I am really scared I will not hold back enough of my income and end up owing the government more than I can pay.

Has anyone here met with a CPA about a situation like this? From what the article says, it sounds like that is exactly the professional I need to visit.

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