What Does a CPA Firm Mean and What Services Do They Offer?

Businesses and individuals rely on CPA firms for financial expertise that extends beyond bookkeeping. These firms help clients maintain compliance, optimize tax strategies, and make informed financial decisions. Their role is critical in navigating complex regulations and ensuring accurate financial reporting.

Professional Licensing and Regulations

Certified Public Accounting firms operate under strict regulatory frameworks to uphold financial integrity and public trust. Each firm must be owned, at least in part, by licensed CPAs, with state boards enforcing ownership thresholds. In California, for example, at least 51% of a CPA firm must be CPA-owned, while some states permit non-CPA ownership under specific conditions.

To obtain a CPA license, individuals must meet rigorous educational and experience requirements. Most states require candidates to complete 150 semester hours of college coursework—30 more than a standard bachelor’s degree. Candidates must also pass the Uniform CPA Examination, a four-part test administered by the AICPA and NASBA, covering Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, and Regulation. Some states require an additional ethics exam before granting licensure.

Once licensed, CPAs must fulfill continuing education requirements, typically 40 hours of coursework annually, covering topics such as ethics, fraud prevention, and tax law updates. Firms performing audits, reviews, or compilations must also comply with peer review programs, such as the AICPA’s Peer Review Program, which mandates an external evaluation every three years.

Service Offerings

CPA firms provide financial services beyond traditional accounting, spanning assurance, tax preparation, and advisory functions to help businesses and individuals meet regulatory requirements, improve financial performance, and manage risks.

Assurance

Assurance services enhance the reliability of financial statements for investors, lenders, and regulatory bodies. CPA firms conduct audits, reviews, and compilations in accordance with Generally Accepted Auditing Standards (GAAS) and, for publicly traded companies, Public Company Accounting Oversight Board (PCAOB) standards.

Audits provide the highest level of assurance, involving extensive testing of financial records, internal controls, and compliance with Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS). Auditors issue an opinion on whether financial statements fairly present an entity’s financial position.

Reviews offer a moderate level of assurance, primarily through analytical procedures and inquiries rather than substantive testing. These engagements are often used by private companies seeking assurance for lenders or investors. Compilations, the least rigorous, involve assembling financial data without providing assurance, typically for internal use or tax reporting.

Tax Preparation

CPA firms assist individuals and businesses with tax return preparation and compliance with federal and state tax laws. They analyze financial records to determine taxable income, apply deductions and credits, and calculate tax liabilities.

For businesses, tax services include corporate income tax filings, partnership tax filings, and payroll tax compliance. Firms also handle sales tax reporting, estimated tax payments, and multi-state tax compliance for companies operating across jurisdictions.

Individuals benefit from strategic tax planning, including optimizing deductions such as mortgage interest, retirement contributions, and capital gains tax strategies. High-net-worth clients may require estate and gift tax planning, trust taxation, or international tax compliance, including Foreign Bank Account Reporting (FBAR) and Foreign Account Tax Compliance Act (FATCA) requirements.

Advisory

Advisory services encompass financial consulting, risk management, and business strategy. CPA firms provide guidance on mergers and acquisitions, financial forecasting, and internal control assessments.

For businesses, advisory services may include cost analysis, budgeting, and financial modeling to enhance profitability. Firms assist with entity selection based on tax implications and liability considerations. They also conduct forensic accounting to investigate fraud, embezzlement, or financial misstatements, often supporting litigation cases.

Personal financial advisory services include retirement planning, investment analysis, and wealth management. CPAs help clients develop tax-efficient investment strategies, such as Roth IRA conversions or tax-loss harvesting to offset capital gains. Estate planning services ensure tax-efficient wealth transfers through trusts, charitable giving, and gifting strategies.

Industry-Specific Requirements

CPA firms must navigate industry-specific accounting principles, tax regulations, and compliance mandates. Financial reporting varies significantly across industries, with healthcare, real estate, manufacturing, and financial services each subject to distinct regulatory frameworks.

Healthcare providers must comply with Healthcare Financial Management Association (HFMA) standards and Medicare and Medicaid reimbursement rules, which involve complex cost reporting and revenue recognition considerations. Real estate firms must account for lease modifications and impairment assessments, requiring expertise in property valuation and deferred tax implications.

Tax obligations also vary by industry. Construction companies often use the percentage-of-completion method to recognize revenue, while smaller contractors may use the completed-contract method. Retailers must manage sales tax compliance across multiple jurisdictions, factoring in economic nexus laws established by the South Dakota v. Wayfair, Inc. decision. The oil and gas industry faces unique tax treatments, such as intangible drilling costs and depletion deductions, requiring CPAs to structure tax strategies that maximize deductions while maintaining compliance.

Regulatory oversight also plays a significant role in financial services and publicly traded companies. Banks and credit unions must adhere to Basel III capital requirements and the Current Expected Credit Loss (CECL) model, which affects loan-loss reserves and financial disclosures. Investment firms must comply with SEC regulations, including Form ADV filings and adherence to the Investment Advisers Act of 1940. Public companies, subject to Sarbanes-Oxley Act (SOX) provisions, require rigorous internal control assessments and external audits, particularly in high-risk areas such as revenue recognition and goodwill impairment.

Workplace Structure and Staffing

CPA firms operate within a structured hierarchy designed to balance workflow efficiency, client service, and professional development.

Entry-level roles typically include staff accountants, who handle foundational tasks such as financial statement preparation, reconciliations, and tax return drafting. These professionals gain exposure to various industries while refining technical skills in GAAP compliance, cost accounting, and deferred tax calculations.

As accountants gain experience, they progress to senior roles, where they oversee engagements, review staff work, and liaise directly with clients. Seniors frequently manage audit fieldwork or refine tax planning strategies by analyzing depreciation elections and bonus depreciation options.

Managers and senior managers coordinate multiple engagements, ensuring deadlines align with regulatory filing requirements. Partners, at the highest level, drive business development, oversee firm operations, and ensure compliance with professional standards.

Differences from Non-Credentialed Providers

CPA firms distinguish themselves from non-credentialed accounting service providers through regulatory oversight, professional standards, and the ability to perform specialized engagements. Unlike bookkeepers or tax preparers without CPA licensure, these firms must comply with state accountancy laws, adhere to AICPA ethical guidelines, and undergo periodic peer reviews when offering assurance services.

Non-credentialed providers, such as enrolled agents or uncertified tax preparers, may offer tax preparation and advisory services but lack the authority to conduct audits or issue formal assurance reports. While enrolled agents are federally authorized to represent clients before the IRS, they do not undergo the same rigorous education and examination process as CPAs.

Required Continuing Education

Maintaining CPA licensure requires ongoing professional education to ensure practitioners remain current with evolving accounting standards, tax laws, and regulatory changes. Most states mandate 40 hours of continuing professional education annually, with coursework in ethics, fraud detection, or specialized accounting topics.

Beyond state-mandated education, CPAs in specialized fields often pursue additional certifications, such as the Certified Fraud Examiner credential for forensic accounting or the Chartered Financial Analyst designation for investment advisory services. Firms conducting audits of publicly traded companies must also ensure compliance with PCAOB training requirements, particularly in areas like internal control assessments under SOX provisions.