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Thread: Accountants claiming they're a CPA but aren't

  1. #1
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    Default Accountants claiming they're a CPA but aren't

    I was surprised to find out a lot of the accountants people suggested to me are not even certified accountants. A quick first and last name search on the professional order's website shows that they're not registered. How do these people stay in business for so many years? Do people not care they're not even doing business with a certified accountant and whose educational background is questionable? What bothers me is how they claim on their website and business cards they're a CPA. Isn't that illegal?

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    Default Re: Accountants claiming they're a CPA but aren't

    ^^^ Indeed there are different levels of professional accounting credentials, with ( US ) Certified Public Accountant being about the most stringent - typically requiring a Master's degree. However, there are also other gov't certified credentials like ( state specific ) Public Accountant, requiring a Bachelor's degree ... or ( IRS certified ) Enrolled Agents.

    In point of fact, comparatively few Certified Public Accountants operate as private practices serving individual 'small' clients. Most concentrate on corporate or institutional work, or cater to wealthy individual clients !!!

    My point of course is that there are many tax and accounting professionals in practice who do not have the ( US) Certified Public Accountant credential. Most are fully qualified to serve any need that an individual 'small' client may present. In fact, Enrolled Agents are arguably MORE qualified than CPA's on the specific topic of small business taxes.

    However, just like 'board certified' plastic surgeons, some accounting firms do indeed play games with 'certified' claims for advertising purposes. While not technically illegal, such advertising can be deceiving. 'Certified' by what organization ... a group of local accountants who have formed an LLP for the sole purpose of 'certifying' the partners' accounting firms ??? Caveat Emptor.

    Bottom line, of course, is that virtually any accounting professional is going to offer more skill and competence than a 'big box store' tax prep service ... whose tax preparers have a high school diploma plus 12 weeks worth of training which concentrated on 'employee' taxes not 'small business' taxes !!!
    Last edited by Melonie; 03-11-2015 at 03:37 AM.

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    Default Re: Accountants claiming they're a CPA but aren't

    Just to clear something up, you do not need a masters to be a CPA. I had a Bachelor's of Accounting when I took and passed the CPA exam. I got my MBA later. However, if you have a B.Sc. you must have at least 150 semester credit hours of education. Which, IU explained to me when I entered the major. It was relatively easy to get the 30 extra hours with the planning the IU School of Business put us through. That requirement is automatically complied with if you have a Masters. Had I realized how ridiculously easy an MBA is compared to a B.Sc. in Accounting, I might have gone that way. Never the less, I went the Bachelor's path.

    Also, passing the exam is just one step in the process of becoming a CPA. In addition to education and passing the exam, you have to have twenty-four months of full time accounting employment experience. While there are many paths to getting the experience, it must be verified by a licensed CPA.

    Once you have all that together, you submit your application to the state professional licensing board and the national board. The national board will certify your application and then send it to the state who will advise you that you are a CPA and send you a license. In my case, I obtained my education in Indiana, took the exam in Indiana, but my experience was all in North Carolina. I had to file a separate certification with NC showing that Indiana University was accredited in addition to my transcript from IU. Not a big deal for IU, but it could be a huge deal for an out of state college that was not accredited. For example, the University of North Carolina at Chapel Hill is currently under accreditation review. Thus all their graduates who are applying to CPA licensing outside of NC are at risk of at least being delayed and perhaps denied.

    HTH
    Z

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    Default Re: Accountants claiming they're a CPA but aren't

    ^^^ you are obviously correct about 'alternate routes' to CPA certifications. In NY a person can actually ( for the moment at least ) meet the requirements with no degree at all ... providing that they can document a couple of decades worth of verifiable direct financial / accounting related work experience, get recommendations from several people who already hold CPA's, and pass the state CPA test. But the 'typical' route these days is obtaining a master's degree and heading straight to the state professional licensing agency ( figuratively speaking - they actually land a gov't / corporate accounting job after graduation, get the minimum amount of relevant work experience, and THEN head to the state professional licensing agency with the sponsorship of their employer ) !

    That was the basis for my earlier point ... i.e. that lots of CPA's now opt to work for governments, for auditing firms, for banks, for major corporations, for 'rich' individual investors, etc., rather than offering their services directly to 'average earnings' individuals, because they need / expect the higher earnings potential and the security of a 'regular paycheck' job with great benefits. And that in turn results in 'average earnings' individuals increasingly being offered accounting / financial services by people who have lesser credentials than a fully licensed CPA.

    PS congrats on doing it 'the hard way'.
    Last edited by Melonie; 03-13-2015 at 10:29 PM.

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    Thumbs up Re: Accountants claiming they're a CPA but aren't

    Quote Originally Posted by Melonie View Post
    ...That was the basis for my earlier point ... i.e. that lots of CPA's now opt to work for governments, for auditing firms, for banks, for major corporations, for 'rich' individual investors, etc., rather than offering their services directly to 'average earnings' individuals, because they need / expect the higher earnings potential and the security of a 'regular paycheck' job with great benefits. And that in turn results in 'average earnings' individuals increasingly being offered accounting / financial services by people who have lesser credentials than a fully licensed CPA.
    This is an important point. Many years ago, long before my time in college, most accountants worked for public accounting firms. Not just the then Big Eight, but regional firms and local firms. The division of business was along size lines. Big companies used the Big Eight exclusively. Medium size business (generally not publicly traded unless OTC) used regionals and small businesses/sole proprietors/professional practices used local firms. The number of inside accountants was small. For example, a company the size of mine might have had one CPA on staff to run the whole accounting and treasury functions. Now, even medium size companies have several CPAs on staff. Regional CPA firms have gobbled up locals and now they offer their services to medium size companies. Of course, the Big Eight are now just four. There is a lot less business for them because of Sarbanes-Oxley. For most companies, going public just does not make sense. SARBOX just makes it too expensive. So for the medium size companies that 20 years ago would have gone public, they don't. Instead, they use VC financing or angel financing and stay private. So they have larger inside accounting staffs full of CPAs to keep the investors well informed.

    On the smaller end of the business, the local CPA firms are being squeezed by the declining number of new business start ups. The USA is no longer the best, or even second best country in the world for new businesses. Canada and New Zealand both are better. Thus, our local CPA firms are not hiring new grads like they once did.

    PS congrats on doing it 'the hard way'.
    Thanks.

    Sometimes, I thought dancing was harder than college, other times, college was harder than dancing. I'm still not sure if I knew then what I know now if I would have gone the Bs.C. route or gotten a B.A in economics with the required accounting classes along the way and then gotten a Maters adding a year to college. Certainly with the stripping money coming in, I could have afforded an extra year in college. But, by the time I knew I was a good enough dancer to make a living and go to college, I was more than half-way through my B.Sc. Looking back, I can make the case for taking a year or two off to full time dance or even escort and then go to college. But, that is the advantage of hindsight. At 18, I had no idea that men would pay to look at my body, let alone pay to sleep with me.

    XOXO
    Z

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    Default Re: Accountants claiming they're a CPA but aren't

    On the smaller end of the business, the local CPA firms are being squeezed by the declining number of new business start ups. The USA is no longer the best, or even second best country in the world for new businesses
    Indeed ! The overall reduction in the number of profitable US small businesses in recent years ( imagine the total number of local grocery stores / hardware stores / appliance stores / local manufacturers etc. which have been displaced by large chain stores / imports ! ), combined with a reduced number of new US small business start-ups, now creates a big 'question mark' in the minds of any CPA's who seriously consider hanging out their own 'shingle'. Why risk an insufficient amount of private practice accounting business revenues when a regional or national accounting firm, bank, sizeable corporation, or gov't agency is offering a decent sized paycheck plus decent employee benefits ?

    As such, the 'vacuum' which was created in private practice small business accounting is being filled by people with less time and tuition money 'investment' in their skills / credentials than CPA's, people who can therefore better afford to take a risk regarding low private practice business revenue levels. And that brings us full circle back to the OP's original point / question.
    Last edited by Melonie; 03-14-2015 at 08:14 PM.

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