American CPA qualification

[peterbj7]

I am an English Chartered Accountant (to be precise, an "England and Wales" chartered accountant).  In brief, the requirements to become one of these are very severe and demanding, and take many years after leaving university.  I am now just setting up an accountancy practice here in San Pedro, with a partner who is American qualified.  I have currently to leave all US-specific matters to him.  In order to improve my own knowledge and understanding of American accounting and tax laws I thought I would see if I could become a CPA.  I expected some reciprocal arrangement.

What I have discovered so far is quite revealing.  Firstly there is no such thing as an American CPA.  There is no American body examining and awarding qualifications.  That was a big eye-opener for me.  This is all managed at State level, and there is a US-wide recognition body whose function isn't clear to me, even after some correspondence with them.

Since there appears to be no collaboration between the different State bodies and no agreement on qualification standards I looked up the requirements of a few States.  I have so far been unable to find anything relating to the content of the knowledge and experience required of a CPA in any particular State as everything I've so far seen is concerned only with procedures and payment.  But it is apparently clear that the different states differ widely in their requirements.  I have discovered that for at least a few I am inherently unqualified even to apply to take the examination, as a degree from a US university is a fundamental requisite, with no provision to recognise equivalent non-US qualifications.  I don't know how widespread this requirement is.

I saw that there is an international recognition process, whereby appropriate qualifications from other countries can be recognised and form the basis of a 'short cut".  But when I looked at that it includes just a few countries, around six I believe, including Australia and Ireland but no other European countries.  The UK is not shown at all, even though the Irish institute works closely with the English one and has very similar entrance requirements (the Irish one used to be a part of the English one).  In summary, it seems very arbitrary and perhaps was compiled merely of those bodies which thought to apply to the various US states and pay whatever fee was required.  Certainly it is not remotely authoritative.

I am not at all sure now that I even want to bother to become a CPA, though I may if I can find a way through this morass.  But I do want to acquire the knowledge of US procedures that I know I am lacking.  Is there anyone on this board who is a CPA from any American State who can advise me?  I need a bibligraphy of books & texts, and some way of ensuring I remain up to date with changes in tax procedures, rates etc.  I know exactly where to go for up-to-date English laws & taxes, and I'm hopeful there are comparable US texts.  I'm also interested to know how much difference in substance there is between the various States - I've already established that procedurally they're poles apart, but I can't believe the substance varies much.  After all, many US laws and taxes are determined at Federal level, not State.

Can anyone help with advice?

[deadserious]

I don't know enough about the CPA biz to give you any educated answers.  But speaking for myself, I do have a tax attorney that I consult back in the states, but I have never used a CPA.  In my opinion, a tax attorney gives you certain advantages and protections that a CPA never could.  Taking the tax issue out of the picture and speaking specifically about accounting, there aren't a lot of personal business reasons to use a CPA vs someone that is equally or more qualified on the matter.  That isn't to take anything away from CPAs and they have their place, I just haven't ran into the occasion much.

Jeff is a CPA who used to frequent this forum and he's involved with the Friends of San Pedro.  I'm sure he can give you some pointers if he ever swings by.

[ragman]

peter,

I sent you PM

[martinbsmithjr]

Peter you need not worry as there is no requirement that you be a CPA to perform accounting functions unless you hold yourself out to the public as a qualified accountant. The nomenclature differs but the essential accounting functions are exactly the same. If you are talking about tax work then the Federal tax rules are the same for everyone but each state is different with many states having state income taxes and several don't have income tax but have in some cases intangibles tax. There is no qualification necessary to prepare tax returns whatsoever. If you want to represent your client before the IRS you would need to become an enrolled agent which I am sure you would qualify for.

If you are working for a publically traded company then you would probably have to be a CPA in at least one jurisdiction. But so long as you don't hold your self out to the public in any particular state as being an accountant there is no need for a qualification.

The best place to get the kind of information you seem to need would be one of big international firms. I am sure they have procedures to allow those with your qualifications to come to the US to work. They will know which states are the easiest to qualify for and which states have reciprocal agreements with others.

Hope this is useful for you (and no I am not an accoutant but I have used most of the large companies for my corporate and personal taxes and some audit work).

[peterbj7]

Martin - I am a qualified accountant, just not in the USA.  It's primarily the gap in my knowledge that I want to remedy, rather than just the formality.

[martinbsmithjr]

No, I understand you are an accountant and I don't really see why you would need the CPA label unless you were to hold yourself out to practice as an accountant with the public in one of the states. Otherwise you should be fine.

[Milfred]

A few years ago I heard that Delaware was easiest state to get a CPA but of course that could have changed....something about
no work experience hours required.

[klcman]

No, I understand you are an accountant and I don't really see why you would need the CPA label unless you were to hold yourself out to practice as an accountant with the public in one of the states. Otherwise you should be fine.

in the US,  in most states, at least, one does not need the CPA designation to hang his/her shingle to the public.

As a CPA friend of mine told me a long time ago, the reason lawyers can perform tax services and accountancy without a license but CPAs cannot practice law is becasue the lawyers make the rules 

[deadserious]

As a CPA friend of mine told me a long time ago, the reason lawyers can perform tax services and accountancy without a license but CPAs cannot practice law is becasue the lawyers make the rules 

If only there were CPA-Client privilege.

[peterbj7]

No, I understand you are an accountant and I don't really see why you would need the CPA label unless you were to hold yourself out to practice as an accountant with the public in one of the states. Otherwise you should be fine.

Yes, as I said I thought it was a straightforward route to get the necessary detailed knowledge and experience.  Look as if I'll be better off just getting some appropriate textbooks and journals.

[peterbj7]

If only there were CPA-Client privilege

There will be FCA-client privilege, at any rate so far as I and my firm are concerned.

[martinbsmithjr]

What I meant to say was that you cannot hold yourself out to be a CPA if you are not. There are also some 'attestation' functions that in certain jurisdiction require you to be a licensed CPA. In my last firm we had a Chief, Financial Officer with a BA in accouting but she never sat the CPA and it never bothered anyone that I know of (of course I owned the company). I am not sure you actually need any books but it might be a good idea to sign up for some of the free newsletter that the big (and some not so big) accounting firms send out for free. I don't think it would be worth it to get the CCH service or any of the other paid services.

[peterbj7]

Of course I wouldn't say I was a CPA if I wasn't, and the way things are looking I never will be.  The CPA qualification has no significance in Belize, and I have no intention of practicing on US soil.  I already have the qualification that a CPA has to try to get to practice in Belize.  I merely thought becoming a CPA might be the easiest way to acquire the detailed knowledge of US tax affairs that I am personally to some extent lacking, but it's becoming clear that that's not the case.  There are other ways to acquire that knowledge, through my own professional body in London and through reference books (not free newsletters, no matter who produces them), and clearly I have to follow those routes.  All the time of course my business partner (who is US qualified) DOES have this knowledge and experience so as a firm we can offer these services - I just want to get to the same position myself.

[klcman]

As a CPA friend of mine told me a long time ago, the reason lawyers can perform tax services and accountancy without a license but CPAs cannot practice law is becasue the lawyers make the rules 

If only there were CPA-Client privilege.

The good ones have ethics........

[deadserious]

If only there were CPA-Client privilege.

The good ones have ethics........

It's not about ethics.  It's about being compelled to testify.  I've never been put in a position where my tax preparer ever had to testify for me, and I don't really do anything shady so it shouldn't ever happen, but if my tax preparer were forced to take the stand, I would want one that has legal recourse to protect our relationship.