Tips on How to Select an Accountant
There are a number of services that a company may need
to keep proper records: bookkeeping, payroll, sales tax reports, monthly and
quarterly tax filings, tax returns, tax advice, generating financial
statements, auditing financial statements and financial management advice.
Some can be handled by a bookkeeper, others need the skills of an
accountant. Decisions need to be made about services
needed, budget, and how much to try to handle within the company.
Bookkeeper vs. Accountant vs. CPA
Bookkeepers tend to do the simpler, lower level record
keeping tasks. Accountants, on the other hand, have a higher level of skill
and knowledge, and can do higher level tasks, although they usually offer
bookkeeping services, as well. Keep in mind, anyone can
call himself/herself an accountant. On the other hand a
CPA is an accountant who has been certified, through testing and education,
to use the title “CPA”. “Because of stringent
requirements for education, experience and testing, most CPAs do indeed live
up to the higher level of respect they enjoy compared to other
professionals, as research tells us. Their keen ability to analyze data,
record it, interpret and compare it, make them a critically in many, if not
most important personal and business decisions. They tend to be more
objective and independent, as a result of their training as an auditor,”
Frank Sisco, CPAdirectory.com.
Steps to Making a Choice
The following comments were excerpted from the
CPAdirectory.com web site and were written by Frank Sisco, CPA, FPS.
The suggestions he makes should be helpful no matter whether you
choose a bookkeeper, accountant or CPA, or a combination of the three.
Here are some steps that should be helpful in making your choice(s):
1. Determine your needs and desires, immediate and
narrow, and longer-term and broader and make an assessment of your own
particular circumstances, quirks and preferences.
2. Gather several candidates, using various methods
(a) Referrals: talk to
business associates, friends, colleagues in community activities, and other
professionals such as your attorney or insurance agent.
(b) Directories such as
this site's referral list or CPAdirectory.com
(c) Searches among
information sources such as industry publications, articles, Internet search
3. Match what you need and want from step #1 with the
candidates from step #2 for an initial short list of candidates to
4. Conduct interviews and use the article "Choosing the
right CPA" for guidance as to particular questions and attributes to
5. Narrow the list based on subjective considerations
such as chemistry, attitude, impressions, etc., and return to step #1 if not
Choosing the Right CPA
(Courtesy of the author, Frank Sisco, CPA, PFS, Copyright 2003 Frank
Sisco, For more information, contact him at
Treat the decision of choosing the right CPA like you do choosing a good
friend, business partner or a trusted companion. Be thorough, interview
several candidates, explore common ground for values, integrity, and
philosophies about life, check out the CPA’s listening skills as well as
acumen to analyze and interpret data, and also trust your instincts on
recognizing solid character traits.
Choosing a CPA to prepare a relatively uncomplicated
tax return is a lot different from choosing one to help you plan your
financial future, or selecting a CPA to help you transform your business
into an e-commerce powerhouse. And choosing an individual CPA, or small CPA
firm, is miles away from selecting a worldwide CPA firm of hundreds of
partners and scores of specialties. But certain common factors apply about
the particular CPA with whom you will have contact.
Step #1 - Evaluate the CPA as a person and
an advisor. Ask the CPA, and others who know her or him, questions which
help you to determine how well the CPA measures up to these “12 Shoulds”.
Your CPA should:
1. Excel at
serving people. She should enjoy her work, and take genuine pleasure
from helping people like you. Explain your preferences and what bothers you,
and see her reaction. Ask her what are her preferences and what bothers her.
It will be telling.
2. Be more honest than you with a higher level of integrity.
You need someone to hold you back from crossing the line.
3. Have an office location within a quick car ride so you can meet
personally whenever needed, including early mornings, evenings and weekends.
The convenience of emails and phones is great, but getting alone with an
advisor in the flesh, looking face to face is a must if you want someone to
really know you, understand your goals, and think of you during their day.
And availability during off hours is a plus.
4. Be well-experienced in the areas you need, but also a good
If you need help with sophisticated personal financial planning strategies,
do not hire a CPA who spends 90% of his time preparing financial statements
for small businesses, and visa versa. Check not only his credentials and
references, but evaluate him by discussing examples of situations like
yours. Avoid being a CPA's on-the-job training.
5. Be a good communicator, both listening and speaking. It’s
also important for your CPA to know she can tell you when she had made a
mistake, and right away. And no matter how embarrassing, you need to be able
to tell her about circumstances that arise which might affect your financial
health or of your immediate family members who may need help.
6. Get along well with all kinds of people. Not only does she
or he need to get along with you, but also with your spouse and your other
advisors, and perhaps your children, parents and others who get included in
family planning matters. She or he should be, as much as possible, a world
citizen in this diversity-minded age.
7. Demonstrate being attuned to matters of the heart and soul as
well as the mind. What matters most in life in the end are the
relationships we’ve had and how we’ve shared our love with others. If the
prospective CPA does not seem to care about her own family and friends and
clients to the degree you care about people in your life, consider another
8. Do what she says she will do.
9. Charge fairly for services. Be flexible in billing and be
willing to work on a “value basis,” charging you for value she delivers
versus time she spends.
10. Have a great network of associates whom he can use as a
resource to supplement his own knowledge.
11. Enjoy learning and being creative, always on the look-out
for innovative ways to help you.
12. Conduct their own business and personal affairs in a reasonably
efficient and sensible way. Ask questions about the CPA’s approach to
getting and serving clients, the role of staff, the use of technology
including computers, communications equipment and the internet, ways of
keeping current, research methods, management of files and records, etc.
Step #2 - If you feel the prospective CPA
excels at the “12 Shoulds”, the next step is to then delve into more
specifics about doing the work. Here are 13 questions you can ask when
interviewing a prospective CPA:
1. Have you helped a client in a
similar situation? It saves time to work with a CPA
who has already dealt with similar situations. Probe to discover exactly
how he has dealt with problems similar to yours.
2. Will my company and/or I be serviced by you, a partner
or by junior accountants? Many CPA
firms train new associates at the client’s expense. Be sure that you get
what you pay for.
3. What are the nature, scope, and timing of your work, and what
will it cost me? Often, a CPA’s work plan can be more extensive and
more expensive than you might expect. Get the accountant to be specific
about what he or she will do, and get a detailed written letter and cost
4. How are your fees calculated? Will you be charging me for
every phone discussion? To avoid friction later, it is essential to
discuss the CPA’s fee structure. If the CPA uses a time-based system,
discuss the hourly rate of the accountant and staff, overhead expense
reimbursement (what is the cost of a fax?) and whether certain time is not
billed. Discuss alternatives such as value billing which could base the
fees on a percentage of certain value realized from creating and helping
to implement strategies (e.g. cost reductions from restructuring
operations; the present value of estate taxes saved)
5. Can you give me two or three quick ideas on how you might be
able to save our company money or me personally? A good CPA should
have sharp business acumen and be creative. A question like this can show
whether the CPA can call on his or her many skills to truly help your
business to increase profits, improve productivity, trim costs, enhance
return, and lower taxes, or in a personal planning context to achieve
financial goals, partly through enhanced investment returns, lowered
taxes, reduced costs, and coordinated and simplified budgeting and
6. Can you tell me a little about your practice, and your success
and failures? Open-ended questions can elicit a wealth of information.
Let the CPA talk. You will also learn a lot about the CPA’s priorities,
risk-tolerance levels, and various personality characteristics, all of
which can be helpful in gauging compatibility.
7. What can I do to help you with your work and keep your fees to
a minimum? A great deal of your accountant’s time can be saved by
preparing information beforehand. Find out if your CPA is willing to work
with you to offload this work to your firm.
8. How will you be communicating the results of your work to me?
The results of an audit usually take the form of an audit report, and tax
return preparation yields tax returns. But this work also can lead (and
should lead) to many suggestions by the CPA on how to cut taxes, increase
income, restructure investments, build business, and improve information.
Some CPAs are more comfortable with interactive discussions and others
prefer written action reports. In addition, specialists such as Personal
Financial Specialists should be able to provide you with financial
planning memos and reports to organize the many ideas on improving your
financial health. Ask to see examples.
9. Do you perceive any conflicts of interests? CPAs work for
dozens of firms and scores and sometimes hundreds of individuals. You
should inquire if any of your direct competition is represented by the
firm. If so, inquire as to how this conflict is handled.
10. How long have you been a Certified Public Accountant, and
what other licenses do you hold? You should inquire with the state CPA
organization to discover if there have been any disciplinary actions
entered. Some accountants also have credentials as financial planners
(PFS), securities representatives, business valuation experts, even
11. How well have you integrated computers and the internet into
your practice, and has it enabled you to do more for clients at less cost?
Integrating your computer files with those of your CPA’s files can save
time and money, and increase accuracy. Doing so over the internet makes it
even simpler. Find out how your CPA uses the internet. Does she have her
own website,and if so check it out and ask questions about the resources
available on it. Find out how you can interact with her and her computer
systems to make work flow more efficiently and enable you both to stay in
12. Will you need to overhaul our current system ? Your
internal bookkeeping and cost-accounting systems are expensive to alter.
Find out up front whether you can integrate with the firm’s systems.
13. Are you conservative or aggressive in interpreting tax laws
and regulations, and accounting and auditing standards? Save yourself
the hassle and be certain that your accountant approaches your books in
the same way you would.
- Take the CPA to a two-hour dinner, and talk about your lives,
your personal sides not the business sides, and then see if the person
across the table is the one whom you would choose. If so, raise a glass to
toast a new important relationship!