Hiring an Accountant
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Hiring an Accountant
Regardless of whether or not you decide to purchase or start a business, you are going to need an outside accountant. This individual is probably the single most important member of your team, and s/he will play an integral role in the ultimate success of failure of your business. So what should you look for in your outside accountant?
- C.P.A. C.P.A. stands for Certified Public Accountant; in order to acquire this credential, an individual must have a four-year college degree, 30 college credits beyond the degree, one year of experience working for a C.P.A., and must pass a rigorous multi-subject examination. While the credential does not guarantee of competency, it is still a very good indicator.
- Employment experience: The outside C.P.A. that you hire should have three to five years of experience working for a quality accounting firm. Professional competency in anything is acquired not so much through schooling, as important as it is, but through high quality professional experience. Having worked for a minimum of three to five years for a quality firm indicates that an individual has probably acquired the requisite professional skills that you need.
- Tax background: Your outside accountant’s role in the tax area is to prepare returns that minimize your tax liability within the parameters of the tax law. It is not to understate income or overstate deductions so that you do not have to pay taxes. If you are deemed to have committed tax fraud by the Internal Revenue Service, you might find yourself getting several years of free room and board, courtesy of the Federal Bureau of Prisons. Unfortunately, there are too many business people today who seem to think that running your own business is a license to defraud the government.
You should also keep in mind that there is no such thing as accountant / client privilege, as is the case between attorneys and clients. While accountants have a professional responsibility to keep confidential their client’s business, there is no legal obligation to do so, and that is what matters. ONLY GIVE YOUR ACCOUNTANT THE INFORMATION THAT S/HE NEEDS TO DO WHAT YOU ARE PAYING HIM OR HER TO DO. Never anything more. The Internal Revenue Service pays rewards to individuals who “snitch” on tax cheats, and there have been instances where accountants have done so. Your accountant can also be forced to testify in Court against you. A word to the wise is sufficient.
This article is not intended to be a rendering of legal, accounting, tax or other professional advice. Assistance from a competent professional in these specific fields should be sought.