Certified Public Accountants and accounting firms
Certified public accountants are licensed by a state board of accountancy. Becoming a CPA generally requires meeting education requirements, passing the Uniform CPA Examination, and completing a period of qualifying experience. Many states also license CPA firms separately, and some require firm registration or peer review before a firm can provide attest services such as audits and reviews.
Not every accountant is a CPA, and not every accounting service requires a license. Bookkeeping and tax preparation can often be performed without a CPA license, though paid tax preparers have separate federal requirements. Using the title 'CPA' or issuing audit and review reports is restricted to licensees. Most states also allow CPAs licensed elsewhere to practice under mobility rules, so a CPA serving you may hold a license from another state.
CPA licenses are renewed on a cycle set by each board, often every one to three years. Most boards require continuing professional education over a reporting period, frequently with a required ethics component. CPAs who perform audits may need additional hours in accounting and auditing, and firms may be subject to peer review. Exact hours and timing vary by state.
If you are engaging a CPA for an audit, review, or other attest engagement that a lender, investor, or government agency will rely on, verify both the individual and the firm before signing the engagement letter. Ask the firm whether it is subject to peer review and, if so, request the most recent report. Lenders commonly require that financial statements be prepared or reviewed by a licensed firm, and an unlicensed report may be rejected entirely, delaying a closing or filing. When you change accountants, ask the new CPA to confirm their own license status in writing as part of the engagement, and keep that confirmation with your engagement letter and prior-year financial statements.