Written byA CPA is a certified practising accountant: a member of CPA Australia who has completed an accredited degree, the CPA Program and a period of supervised professional experience.
Also known as: certified practising accountant, CPA accountant, CPA Australia member
Key points
- CPA, CA and IPA are the main accounting designations in Australia, from CPA Australia, Chartered Accountants ANZ and the Institute of Public Accountants.
- A CPA who offers accounting services to the public must also hold a public practice certificate from CPA Australia.
- A CPA is not automatically a registered tax agent: lodging returns and activity statements for a fee requires registration with the Tax Practitioners Board.
- Lenders often accept accountant-prepared financials or an accountant's letter in a business loan application, especially for low doc finance.
How someone becomes a CPA
The designation is awarded by CPA Australia, a professional body founded in the 1880s with members in Australia and overseas. Candidates need a recognised degree or postgraduate award, then complete the CPA Program, a set of professional-level exams, alongside a period of relevant work experience. Once admitted, a CPA must complete continuing professional development every year and follow the body's code of conduct.
Members who want to offer services to the public, rather than work inside a company, go a step further and complete the public practice program to hold a public practice certificate. That is the CPA you meet when you engage a suburban accounting firm.
What a CPA does for a business
Bookkeepers record transactions; accountants turn them into something you can act on. A CPA prepares the balance sheet and profit and loss, lodges tax returns, handles GST and activity statements, and deals with the ATO on your behalf when they are also a registered tax agent.
Just as valuable is the advice around those numbers: whether to trade as a sole trader, company or trust, how depreciation will treat a new machine, and when a purchase makes sense for cashflow rather than just for tax.
CPAs and finance applications
Finance applications lean on accountant-prepared documents. For a full doc application the lender wants financial statements and tax returns your accountant has produced; for low doc equipment finance an accountant's letter confirming the business is trading and can meet the repayments may stand in for them. Some lenders ask that the letter come from a CPA, CA or registered tax agent.
Accountants and finance brokers work side by side here. The accountant knows the numbers and the tax position; the broker knows which lenders on the panel will look at the deal and how to package it. Neither can promise an approval, and a good accountant will say so.
Example
An earthmoving contractor in Mackay wants a second excavator before the wet season. The owner's CPA has just finished the year-end accounts, so she sends the broker two years of financial statements, the latest activity statements and a short letter confirming the company's trading position. The broker uses that pack to place the deal as a full doc chattel mortgage with a lender that suits the company's profile, and the accountant advises on how the purchase and its depreciation will sit in next year's return.
Not to be confused with
- Broker
- a broker arranges finance from a lender panel, while a CPA advises on accounts and tax
Frequently asked questions
What is the difference between a CPA and a CA?
Both are qualified accountants who have passed a professional program and keep up continuing development. CPA is the designation of CPA Australia; CA (chartered accountant) is the designation of Chartered Accountants Australia and New Zealand. In day to day practice they do similar work, and lenders treat letters and financials from either the same way.
Do I need a CPA to do my tax?
No. You can lodge your own return, or use any registered tax agent, who may or may not be a CPA. What matters for lodging on your behalf is registration with the Tax Practitioners Board. Many small businesses choose a CPA or CA because they want advice on structure, GST and asset purchases, not just a lodged return.
Can a CPA advise me on a loan?
A CPA can tell you what a loan will do to your tax position, cashflow and balance sheet, and whether the business can afford it. Advising on which loan to take, or arranging it, is broker or lender territory, and for consumer credit it needs an Australian credit licence or authorisation. Many accountants refer customers to a broker for that part.
How do I check someone is really a CPA?
CPA Australia runs a public register on its website where you can search a member by name and confirm their status and whether they hold a public practice certificate. For tax lodgement you can also check the Tax Practitioners Board register to confirm the person or firm is a registered tax agent.
What is an accountant's letter for a loan?
It is a short letter from your accountant, on their letterhead, confirming facts a lender wants verified: that the business is trading, its structure and ABN, roughly what it earns and that it can meet the proposed repayments. Low doc lenders use it in place of full financial statements. Accountants will only confirm what their records support.
Related terms
Business activity statement (BAS)
A business activity statement (BAS) is the form a GST-registered business lodges with the ATO, usually quarterly, to report and pay GST, PAYG withholding and PAYG instalments.
Read definitionBalance sheet
A balance sheet is a financial statement that shows a business's financial position at a specific date: what it owns (assets), what it owes (liabilities) and the owners' equity.
Read definitionGoods and services tax (GST)
Goods and services tax (GST) is a broad-based 10% tax on most goods and services sold in Australia, which registered businesses collect on sales and pay to the ATO.
Read definitionATO
The ATO is the Australian Taxation Office, the national tax authority that collects income tax, GST and PAYG, administers superannuation rules, issues rulings and enforces compliance.
Read definitionBusiness loan
A business loan is finance for business operations, capital expenditure or growth, repaid with interest, either over an agreed term or as a revolving limit you draw and repay.
Read definitionBroker
A broker is a licensed intermediary who connects borrowers with lenders, comparing finance options across a panel of lenders and submitting applications on the borrower's behalf.
Read definitionGo deeper
Sources
This article is general information only and is not financial advice.