When people think of the accounting field, usually taxes come to mind. And while a lot of CPA's and accountants do work in tax preparation or with tax returns, did you know there are several other types of accounting firms in the industry? Accounting involves a lot more than just taxes. Take a look at what an accounting firm is and learn about the different types of accounting firms here.
What is an Accounting Firm?
Just like the name implies, an accounting firm is a group of accounting professionals who provide tax resolution, bookkeeping, auditing and advisory services (plus an array of other services) to paying clients. CPA's, or certified public accountants, can work at firms like these but not every accountant is a CPA — but every CPA is an accountant. CPA's must pass state licensing exams and meet education requirements, which can vary by state. CPA's have to keep up with CPE (continuing professional education) credits as well to maintain their license.
There are different types of accounting firms, including:
Different Accounting Practices
1. Full-Service Accounting Firms
Typically, a full-service accounting firm provides a wide variety of services from taxes to advisory to audits, and more. These firms likely are larger in order to accommodate their clients in their different needs. These practices have the resources necessary to offer a full suite of services, hence the name full-service.
2. Tax Firms
Tax Firms are a specialized form of accounting firms which focus almost exclusively on tax prep, planning and resolution for businesses and individuals. Accountants working at these firms are usually CPAs and it’s crucial for them to stay up-to-date on tax laws.
3. Audit Firms
Audit firms handle investigations into a company's finances or other area to provide objective and third-party findings.
4. Outsourced Accounting Firms
Rather than having in-house accounting departments, small businesses can choose to contract with an outsourced accounting firm, which provides full accounting services for their clients and manage finances for the business.
5. Bookkeeping Firms
Bookkeeping firms are focused on record-keeping and keeping track of income, expenses, payroll and for some, tax returns for business clients.
Which type of accounting firm do you work at? Let us know in the comments below.
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