How to Choose a Certified Public Accountant (CPA)

A CPA is one of the most versatile specialties among financial professionals. A CPA can specialize in investments, taxes, audits, accounting systems—you name it. So it's a good idea to do some homework on any person you're considering as your CPA before you call or visit. We recommend that you interview at least three CPAs before you choose.

You may be able to find some information about the CPA—such as work experience and education may be available—by visiting their Web site or doing an online search on them. This will help you keep your interview more focused. Here is a list of questions and things to consider when choosing a CPA:

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Questions to Ask a CPA During Your Interview Notes

1. Experience

How long have you been in this line of work?

Ideally you want someone with eight to ten years' experience. If they are part of a firm, ask how long the firm has been in business.

 

2. Expertise

What are your areas of expertise?

You want to know if they specialize in income tax planning, auditing, working with small businesses or public corporations, Sarbanes Oxley compliance, or all of the above.

 

3. Qualifications

Do you have a CPA designation and do you hold other professional designations, such as Certified Financial Planner (CFP)?

Find out, too, if they belong to their state's Society of CPAs or the national American Institute of Certified Public Accountants (AICPA).

 

4. Location

Where are you located geographically?

We think it is important to have face-to-face meetings within a reasonable distance of your work or home.

 

5. Pricing

How are you paid for services and what are your typical charges?

Find out the hourly billing rate, and get a written estimate before work begins. It's also a good idea to have them outline the scope of your relationship with them.

 

6. Services Provided

What services will you offer me, and how is each service priced?

Here are some possibilities:

  • Preparing your Income Tax
  • Planning your Income Tax and advising you on tax-savings strategies
  • Filing of your signed tax forms
  • Providing general advice during the year
  • Bookkeeping
  • Financial Planning
 

7. Conflicts of Interest

Do you have licenses to sell other financial products, such as life insurance or securities?

See if they're compensated for selling these products and, if so, how. You need to know if they're focused on your needs or on products.

 

8. Client Base

What types of clients do you serve, and are there minimum net worth or income requirements?

You'll want to know if they work with entrepreneurs, schoolteachers, or corporate executives, for example, because each profession has unique planning requirements. The CPA who will be most beneficial to you is one who works with people with similar profiles to yours.

 

9. Referrals

Will you provide me with the names and numbers of clients who I can call for a reference?

Get those names, and then call them before hiring any CPA.

 

10. Gut Check

Make your own assessment. Does the person seem forthright in his or her answers? Make sure you have a sense of trust and rapport with the person. You want to feel confident that they're listening to what your needs are and that they'll be able to provide you with solutions.

 

Fin Tip

  • Avoid CPAs who claim they can obtain larger refunds than other income tax preparers can.
  • Avoid CPAs who charge a fee based on the amount of the refund.
  • You don't have to hire a CPA to prepare an income tax return—you can hire an Enrolled Agent (who is registered and authorized by the IRS to prepare income tax returns). The hourly rates for an Enrolled Agent will be cheaper than a CPA's.
  • You don't have to hire a CPA to compile your business books and records. You can hire a bookkeeper or an accountant—their hourly rates would be cheaper than a CPA's.

Finding help on the internet

  • State Society of CPAs
    Each state has it's own Web site and allows you to see whether a CPA is currently licensed to practice in that state. Typically it also gives you information on their practice areas.
  • American Institute of Certified Public Accountants
    This is the national organization of CPAs, and it provides some useful literature, articles, and tax law updates.