Hi, and welcome to another exciting and well-researched article from Career employer.

Today’s interesting article will talk about CPA firms.

By the end of this exciting and entertaining read, you will be clear on a CPA firm’s structure, functions, and roles.

Specifically, we will scrutinize the following areas:

What is a CPA firm?
What does a CPA firm do?
What’s the structure of a CPA firm?

According to the AICPA, over 46000 Certified Public Accounting (CPA) firms in the US offer a broad range of accounting and financial services to clients.

These CPA firms employ a diverse group of financial professionals, including auditors, financial planners, and accountants.

Let’s dive right in!

What is a CPA firm?

CPA firm definitions vary, but here is the general description.

A CPA firm is a financial services company owned wholly or partially by a CPA that provides financial services to paying clients.

CPA firms provide auditing and accountancy services to individuals, non-profit organizations, government agencies, and businesses.

Please note that a CPA firm must be licensed in its state of operation.

Additionally, the CPA who owns the CPA firm must have a valid operating CPA license. 

Unlike accounting firms, CPA firms have mobility which allows them to operate across state lines without registering with a state’s board of accountancy.

Though functional in only 14 states, CPA mobility improves CPA firms’ overall efficiency and effectiveness.

What do CPA firms do?

What are CPA firm duties?

Certified Public Accounting firms offer a range of professional services to clients.

Here are some of the typical CPA firm duties:

1. Advisory services

The AICPA defines CPA advisory services as “those where the CPA practitioner develops findings, recommendations, and conclusions for client consideration and decision making”.

CPA advisory helps clients assess, identify, mitigate and solve business challenges and makes sound business decisions.

CPA firms provide a host of CPA advisory, services including personal and business advisory services to large and small businesses including;

  • Financial advisory

Financial advisory refers to the professional advice given to an individual or business by a professional financial advisor.

Financial advisors do the following.

– meet with clients and develop effective financial plans

– perform market research and help create functional sales strategies

– prepare financial forecasts

– cash flow planning

– develop personal and business budgets

– asses and categorize client goals and needs

– research and recommend the best investment options to customers

– analyze a client’s financial records and provide recommendations.

– investment management and estate planning

– financial and tax planning

  • Process advisory

Financial process advisory refers to the systems and plans a CPA creates to help a business streamline, improve and optimize business operations.

Process advisory aims to maximize returns and reduce wastages within a business.

Companies use process advisory to improve business operations in the following ways;

– improve the purchasing department by automating purchasing, invoicing, and account receivable divisions.

– Analyze sales and marketing departments to develop practical cost estimation, review, and approval systems.

– improve business advertising budgets by identifying drainages and plugin them.

– review staff positions, measure productivity and give recommendations concerning staffing.

  • Business app advisory

Business app advisory involves leveraging automation and technology to improve business systems and workflow.

App advisory is based on the business cloud accounting ecosystem, enhancing and making business more efficient.

Common app advisory examples include;

– automating payroll and HR systems 

– cloud-based expense management networks

– Installing Point Of Sales software to upgrade manual invoicing systems

– Receipt and ticketing automation

  • Compliance and forensic advisory

Compliance advisory refers to the processes and systems CPAs use to ensure that a business satisfies all statutory requirements.

Forensic advisory focuses on the systems, steps, and processes that may lead to litigation from fraud, global corruption, and financial mismanagement.

Common examples of forensic and compliance advisory include:

– adapting robust cyber security and business intelligence solutions to detect fraud and other forms of financial mismanagement.

– Conducting risk assessments to identify areas that may cause financial losses.

– analyze the integrity and compliance status of a business and provide relevant feedback.

– develop effective compliance and forensic framework that highlights integrity issues in a business.

  • Successor advisory

CPAs who offer succession advisory services help companies create sustainable business models that are effective and don’t over-rely on one person, i.e., the owner.

Succession advisory services are mainly geared to high-wealth management firms and provide maximum value to stakeholders.

Here is how CPA assists clients in successor advisory:

– create business models that are self-sustaining and rely on systems rather than individuals

– create a clear and effective business hierarchy that promotes business growth rather than focusing on positions

– providing training to management level teams on how to handle company succession

– demarcate roles, responsibilities, and positions of a firm’s employees

– create succession plans in the event of mergers, acquisitions, or sale of a business

– analyze business transition plans

2.  Attestation Services

An attestation service refers to a CPA’s independent review of a company’s financial statement and overall financial health.

When a CPA attests, they confirm that a company’s financial records are accurate as per the information provided.

Attestation services are developed and governed by the AICPA to conform to the highest level of accounting best practices.

The three main types of CPA attestation services include:

  • Financial Audit

Financial audits conducted by licensed CPAs prove that a firm’s financial records are up-to-date and in order.

Attestation services rely on assessing internal controls and analytical systems.

Financial attestation is mandatory for SEC/ publicly traded companies

Attestation audits follow the AICPA  guidelines and must satisfy the generally accepted accounting principles (GAAP)

  • Reviews

Reviews are less detailed audits of a company’s financial books by an independent CPA that mainly leverages analytical methods.

Some of the procedures used to review a company’s financial records include:

– perform a ratio analysis using industry, historical, and forecasted results

– analyze irregular findings

– investigate large transactions, especially during the end of an accounting year

– follow up on previous review concerns

– analyze accounting record systems

Reviews provide limited assurances of the accuracy of a financial statement and give no extra modifications to comply with Generally Accepted Accounting Principles (GAAP).

  • Compilation

The compilation is the least complex form of financial attestation and helps a firm present its financial data in an organized and chronological manner.

A financial compilation doesn’t involve any form of review, analysis, or confirmation of financial reports. 

The business compilation provides no assurances of the integrity of financial statements.

3. Non Attestation Services

AICPA  defines non-attestation as “ services provided to a client that are not directly related to an attest engagement”.

Here are the different types of non-attestation services that CPA firms perform:

  • Internal audit

An internal audit done by a CPA firm assesses a company’s accounting process, corporate governance, and internal control systems.

Internal audits provide independent and unbiased assessments of a firm’s business operations and systems.

Through auditing, company management gets information on the firm’s compliance status, risk threshold, operational efficiency, and control environments.

Internal auditors use various techniques to gather relevant business information, including: 

– studying flow charts, manuals, and SOPs

– direct interviews with staff

– physical inventory counts

– account reconciliation

– audit trail calculations

  • Internal control designs

Internal controls refer to all the systems, processes, and policies that quickly detect any malpractices within a business.

CPA firms are responsible for evaluating internal control designs and their efficiency in preventing fraud and other malpractices through regular audits.

Using pre-performance, observation, and inspection, CPAs can verify the effectiveness of a firm’s internal controls and advise management accordingly.

  • Tax services

Most CPA firms provide some form of tax services to their clients.

And since CPAs are tax professionals with the authority to represent taxpayers before the IRS on tax issues, more and more companies are turning to CPA firms for their tax concerns.

The common CPA tax services include:

– tax preparation

– tax audit

– tax planning

– preparing tax reports

– representing tax clients before the IRS

– providing tax consulting services

– calculating tax credits

– developing long term tax strategies 

CPA firms specializing in tax services ensure their clients satisfy government tax regulations, prepare long-term tax policies and maintain a favorable tax environment.

  • Management and business consulting

CPA firms provide business consulting services to large and small businesses helping them navigate the often tricky and confusing world of business and finance.

By identifying system weaknesses and preparing robust business management plans, CPA firms allow businesses to thrive, improving their bottom lines while eliminating wastages in the system.

Some of the business consulting services a CPA firm provided include:

– business financial forecasting

– financial planning

– prepare a business valuation

– accounting system analysis

– advising business owners on legal business requirements

– profit and loss analysis

– advising on the business acquisition, and mergers

– initiating new business invoicing and cash flow systems

– real estate estimation and appraisals

  • Specialty services

Many CPA firms are now offering specialized accounting services to help their clients meet the challenges of the new business world.

Specialized CPA firm’s services include:

– financial IT systems

– civil lawsuits

– Insolvency and bankruptcy accounting

– divorce accounting services

– forensic and fraud services

– professional liability issues

What’s a CPA firm structure?

A CPA firm’s structure largely depends on its management model.

The different types of CPA firm ownership models include:

  • Limited liability partnership
  • Limited liability company
  • Limited liability corporation
  • Benefit corporation
  • Standard corporation
  • Professional corporation
  • Sole proprietorship
  • General corporations
  • General partnership

The CPA firm’s size and business model will directly affect its structure.

A smaller local CPA firm will have a less defined management structure than larger national CPA corporate firms.

A typical CPA / accounting firm structure looks like a pyramid with a partner at the top and junior staff at the bottom of the hierarchy.

The staff position in an accounting firm depends on:

– years of experience

– education levels

– skill specialization

– staff retention and promotion policies

– additional skills and training ex proficiency in foreign languages

Here are the staffing positions of an accounting company.

Please note that smaller accounting firms will have fewer staffing positions than this.

1. Board of directors

Most mid to large size CPA companies have a board of directors who make significant decisions and influence the company’s business directions.

A board of directors is usually composed of the major company shareholders.

2. Chief Executive Officer (CEO)

The CEO is in charge of the day-to-day running of the accounting firm.

All other personnel reports to the CEO, who also acts as a bridge between the management and staff.

3. Chief financial officer (CFO)

The CFO is the hands-on operational manager responsible for all the daily accounting and finance duties and reports to the CEO.

4. Controller

The controller is an accounting supervisor in charge of the managerial, financial, and tax accountant.

A controller coordinates all the functions and duties of the different departments in a CPA firm and reports directly to the CFO.

The controller is directly in charge of;

  • Accounts manager

The accounts manager is responsible for preparing financial documents used for daily office operations.

Typical duties of the accounts manager include preparing:

– operation budgets

– cost estimates

– preparing profit and loss reports

  • Financial accountant

A financial accountant is responsible for collecting, organizing, and preparing financial records for internal and external use by government agencies or external auditors

Functions of a financial accountant include:

– quarterly financial reports

– annual financial reports

– tracking payroll, billing, and invoicing transaction

– investigating anomalies in financial records

  • Tax accountant

The tax accountant ensures tax compliance through tax audits, filing tax returns, and preparing tax statements.

By liaising with the controller, the tax accountant maintains the company’s tax records.

4. Treasurer

A company treasurer is in charge of sourcing funds for company operations, creating cash flow schedules, and managing short-term company investments.

The treasurer is directly answerable to the CFO.

5. Internal auditor

An internal auditor is responsible for a firm’s internal control mechanisms and verifies the accuracy of financial data.

An auditor analyzes all financial data in the company and directly reports to the CFO.

6. Senior accountant

Senior accountants are mid-level professionals who conduct all the core functions of a CPA firm, like preparing budgets, analyzing clients’ financial books, and preparing financial reports.

Additionally, senior accountants usually supervise staff accountants.

6. Staff accountant

Staff accountants are usually entry-level finance professionals who carry out the normal activities of a CPA firm.

The duties of a staff accountant include the reconciliation of financial data, making ledger entries, and other bookkeeping functions.

Staff accountants report to the senior accountant

7. Junior Clerk/payroll/bookkeeping

A junior clerk is an entry-level position in a CPA company.

This position’s experience and educational requirements are few, with most clerks lacking a bachelor’s degree or advanced academic training.

The bookkeeper’s primary duties are to make ledger entries of the firm’s daily transactions like purchases, sales, and bill payments.

What are the qualities of an effective CPA?

The CPA profession requires highly trained and skilled finance professionals.

Here are the top qualities of an effective CPA:

  • Excellent communication skills
  • Highly detailed and organized
  • Excellent understanding of technology
  • Strong work ethic
  • Team player
  • Strong educational foundation
  • A constant thirst for knowledge
  • Strong business acumen
  • Solid problem-solving skills
  • Trustworthy


A CPA firm is a highly complex and high-energy workplace that provides a great learning opportunity for new CPAs and interns.

Whether you’re a CPA, accountant, or auditor, the skills, knowledge, and experiences of a CPA firm will help hone your skills, improve your confidence and help you to grow in your career.

We hope our balanced CPA firm article has provided a glimpse into the workings of a CPA agency.

Kindly read our detailed FAQ section to answer common CPA firm questions comprehensively.









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