Accounting professionals are important advocates for business owners and can provide expertise in a variety of corporate or private settings. The accounting profession is very broad, but practice and services may focus in specific areas such as public accounting, management accounting, tax accounting, international accounting, forensic accounting or other niche markets.
When hiring and working with one of these business professionals, the choices can become overwhelming depending on the area of need. It is similar to searching for medical help and determining if one needs a general physician or a specialist. Business consultants with particular expertise may require certifications and special licensing or designations. Here are a few areas of accounting specialties and professional designations to consider when looking for qualified individuals who provide financial and accounting services.
A certified public accountant is an individual who has passed the Uniform CPA Examination and met strict education, professional work experience and licensing requirements by their state licensing board. CPAs provide a variety of services to the public, including tax advice, return preparation and representation, independent audit and attestation services, bookkeeping and payroll preparation, accounting system training and support, consulting and advising, and other financial management assistance to clients.
Management accountants focus on providing accounting information internally to help managers make informed decisions to properly run a business entity; evaluate costs, profitability and efficiency; plan, forecas and budget; and other operational decisions. These accountants are also called cost accountants or corporate accountants. A certified management accounting credential is administered by the Institute of Certified Management Accountants. Individuals with CMA certification have met education and professional experience requirements in management accounting or financial management and have passed a two-part CMA exam.
A tax accountant is an individual with expertise in tax provisions and requirements governed by the Internal Revenue Service and state agencies. The tax environment is complex and constantly changing and can be a material expense to businesses and individuals. Individuals who are paid to prepare U.S. federal tax returns must have a preparer tax identification number from the IRS. Competency tests are also required for paid preparers, excluding CPAs, attorneys, enrolled agents or other individuals who are already subject to continuing education requirements.
Governmental accountants specialize in recording, maintaining and auditing records for entities in the public sector, such as federal, state and municipal governments or other entities subject to government regulation, and entities that provide contract services to governments or receive governmental grants or funds. These entities are accountable to taxpayers and donors and are subject to stricter accounting rules and compliance requirements to report the use of resources. A professional certification in this sector is the certified governmental financial manager for governmental accountants who meet education, ethics and professional work experience requirements and pass three comprehensive CGFM exams.
Auditors evaluate financial statements, examine records and perform a variety of tests on balances and transactions. External financial auditors are CPAs and must be independent to render an objective opinion on whether a company's financial statements are presented fairly, in all material respects, in accordance with a reporting framework. Independent auditors who are CPAs also provide other attestation services such as reviews or compilations of financial statements, and other agreed-upon procedures.
Internal auditors advise management regarding financial reporting, compliance requirements, internal controls, risk management and other aspects of a company's effectiveness and efficiency. Internal auditors can become certified in the profession by meeting certified internal auditor requirements. This designation is accepted globally and is administered by the Institute of Internal Auditors, which also offers four specialty certifications: certification in control self-assessment, certified government auditing professional, certified financial services auditor, and certification in risk management assurance.
Forensic accountants help conduct investigations involving financial information, tracing money, fraud schemes and a variety of economic transactions. They assist in court proceedings and testify as expert witnesses in criminal and civil cases. They contribute to cases involving criminals, including terrorists and spies, perform analysis and engagements involving personal injury and insurance claims, divorce cases and business fraud investigations. A certified fraud examiner has expertise in prevention, detection and deterrence of fraud and has met the qualifications and passed the exam established by the Association of Certified Fraud Examiners. Another credential available in this area for CPAs is to be certified in financial forensics. This designation was established by the AICPA to enhance the public practioner's image as a forensics expert.
Another financial service needed by business and individuals is for independent valuation services of businesses, property and other assets. Accredited Business Valuation credential holders are CPAs who are valuation experts. Typical engagements may include valuations needed for business mergers and acquisitions, divorce proceedings and real estate and banking transactions, and serving as expert witnesses in litigation proceedings.
When choosing who may be the best-trusted business adviser, consider work experience, reputation and cost of services. Feel confident that these professionals maintain licensing and special designations after years of education, experience and complex testing, in addition to completing annual continuing education relative to their field of expertise.