How to Determine CPA Quality

The Internet is an easy way to find CPAs who work in your community. Not only can you find them you can also learn a lot about them by visiting their websites, viewing online documentation about them, and conducting Google searches. Plus, your privacy is protected while you conduct your Internet searches and reviews.

Finding CPAs may be easy, but determining their quality is a major challenge. That’s because they all claim to be experts. So how do you, a non-expert, determine the competence of self proclaimed experts? The bottom-line is you don’t. If you are like most consumers you base your decisions on subjective criteria because you don’t have the knowledge to conduct a more objective evaluation. Most selection decisions are based on:

• Personalities - Did you like the professionals?
• Sales skills - Did they say what you wanted to hear?
• Brand names - Are they a safer choice because you’ve heard of their company?
• Appearances - Do they appear (location, offices) to be successful?
• Referral - Were they referred by someone you trust?

It’s important to note that none of these selection criteria have anything to do with the competence and ethics of the experts. In fact, reality may be the opposite of your perceptions.

If you want to make an objective decision when you select a CPA you should be prepared to ask them several important questions about their credentials, ethics, business practices, and services. Plus, you should ask all of the CPAs the same questions so you can compare their answers. Now you are in control of the selection process and not the CPAs.

• College Degree(s)
  • What school(s) did you attend?
  • What degrees did you receive?
  • Did you have an accounting major?
  • What year(s) did you receive your degree(s)?
• CPA Examination
  • How many times did you take the examination?
  • What year did you pass the CPA examination?
• Experience
  • How many years of accounting experience do you have?
  • Were all of the years in public accounting?
• Specialized Expertise
  • What is your area of specialization (Individual tax, audit, etc.)?
  • Do members of your firm have other specialized areas of expertise?
• Association Memberships and Continuing Education
  • What associations do you belong to?
  • Do the associations have continuing education requirements?
  • How many hours of continuing education do you complete each year?

You can assume all CPAs are ethical, but it always pays to ask a few questions about the ethical history of the professionals you are considering. That’s because you will be dependent on their knowledge and ethics to help you achieve your financial goals.

• Are you a current member of the AICPA (American Institute of Certified Public Accountants)?
  • When did you become a member?
  • Does the AICPA have a required Code of Ethics?
  • Do you subscribe to this Code?
• Are you a current member of your State Board of Accountancy?
  • When did you become a member?
  • Does this organization have a required Code of Ethics?
  • Do you subscribe to this Code?
• Review the CPA’s compliance record at his or her State Board of Accountancy.
  • Does the CPA have any client complaints, lawsuits, or bankruptcies on his or her record?
• Are you willing to disclose any potential conflicts of interest in writing?
• Do any third parties compensate you to recommend their products or services to me?
• Do any professionals compensate you to refer me to them?
  • Are you compensated with cross-referrals?
• Are you required to refer me to other professionals at your firm?

Understanding the compensation methods of CPAs is another way to screen potential service providers.

• How are you compensated for your services?
  • Hourly fees? What is the hourly rate?
  • Fixed fees? When do you charge fixed fees versus hourly fees?
  • Do you itemize hours and services on invoices?
• What is your policy on retainer fees?
• Do you receive any compensation from third parties?
• Are you compensated for any services other than accounting?

It’s important to know who your key contact will be and whether or not the CPA outsources any work to third parties.

• Who will be my key contact?
  • Is this a junior professional who is taking all new clients?
  • Does my potential revenue determine who I’m assigned to?
  • Will I have access to partners and other senior professionals?
• Do you outsource any work to third parties?
• If yes, who are the third parties?
• How do you protect the confidentiality of my information?
• How secure is all of my data?

This basic information will help you make a better decision when you select a CPA.