“No, I Don’t Do Taxes” and 3 Other Statements You Wouldn’t Expect from a CPA
Updated: Mar 5, 2020
When you hear “CPA,” what comes to mind? We make assumptions about what Certified Public Accountants do and who they are. But, you may be surprised by some of the lesser-known-facets of this complex profession. Here are 4 statements you may not expect from your CPA.
Statement 1: “No, I do not do taxes.”
Assuming that all CPA’s do taxes is like assuming that all doctors deliver babies. CPA’s can work in auditing, business finance, personal finance, forensic accounting, cost accounting, data analytics, personal taxes, business taxes, or other niches. They may have a general understanding of tax law but it’s a broad profession and their niche may be in another area.
Statement 2: “I charge $350/hour.”
Don’t be shocked if a CPA charges $350/hour... or more. According to smallbusiness.costhelper.com, accountants charge an average of $150-$400, or more, per hour.
Accountants are paid well because…
(1) They save businesses money and provide value.
(2) They’re more than bean counters. CPA’s provide high-level financial advice and can steer an organization in the right direction (or the wrong one). Software can do the bean counting but they do the analysis. They (should) understand the behind-the-scenes well enough to know when something is off. Everyone can add and subtract. Not everyone knows which numbers need to be added and subtracted, and how to make decisions based on those numbers. Don’t undervalue your accountant!
(3) CPA’s go through a very rigorous certification process. You cannot be licensed until you’ve completed at least 150 college credits, gained industry experience, AND passed FOUR exams. It is estimated that only 10-15% of people who sit for the exams pass all four parts on the first try. Many accountants will start taking the exams but decide to forego certification due to the difficulty. The pass rate for each exam (individually) hovers around 50%. As a comparison, the pass rate for the BAR exam (law) is 75%. (Translation: This is a HARD process.) The exams are:
- Auditing and Attestation (AUD)
- Business Environment and Concepts (BEC)
- Financial Accounting and Reporting (FAR)(known to be the most difficult)
- Regulation (REG)
- *Some states require Ethics also.
Here’s the most recent data on CPA exam pass rates (chart from AICPA):
Because the rules change so frequently, the study books are updated every few years (and they are pricey). Once you pass the first exam, you have a limited amount of time to pass the remaining exams. It’s rough.
Statement 3: “I’m extroverted.”
Accountants can be extroverted! In fact, accountants interact with people regularly and can be responsible for teaching, training, and leading meetings within their organization (and with their clients). Even for the accountants that are introverted, you can’t assume that they’re all socially awkward or lead boring lives. Yes, there are some CPA’s that fit that description - but many do not. Don’t assume that working with your accountant is going to be a drag. They may just have more “pep in their step” than you do. :)
Statement 4: “I’m bad at math.”
Believe it or not, an accountant can be bad at math. With the technology accountants have access to, they aren’t doing a ton of number-crunching. They may not be able to do complex math in their head. But, they can analyze data, decide how the rules and regulations of accounting apply to the data in front of them, and use profound critical thinking skills to make big decisions on how an organization should spend their money. If your accountant is bad at math, don’t assume that they’re also bad at accounting. The two don’t necessarily have to go hand in hand.
Get to know your CPA! They play an important role within the financial (and overall) success of organizations everywhere and can make or break a business. If you need a CPA to review your monthly transactions and provide financial guidance for your business, contact us at email@example.com or fill out our interest form at koretalents.com.