by Angie Mohr

Created on: April 17, 2008

Whether your business is just starting out or has been around for twenty years, one of the most important members of your external advisory team is your accountant, along with your business lawyer and financial planner. A good accountant can help you to avoid pitfalls along the road and can help you to make better decisions along the way. Choosing an accountant can be a daunting task. How do you know that your potential new accountant is qualified and experienced? What if you can't understand what they're saying as they converse with you in techno-speak? What happens if they steer you down the wrong path?

Choosing the right accountant can improve your bottom line immensely and therefore it's critical to spend the time upfront understanding the process. Let's first take a look at the term "accountant". It's a very generic term and, in fact, anyone can call themselves an accountant. It's not a restricted title like "lawyer", for example. You know that if someone has the word lawyer on their sign that they have a certain set of credentials and have been licensed to practice. Not so with accountants. The term itself does not denote any particular set of skills or experience. Within the world of accountants, however, there are professional designations. In the United States, the most common professional accountant is the CPA. Although there are competent non-designated accountants, it can be difficult to assess their abilities, whereas if you hire a designated accountant, you can be assured that they have completed certain professional requirements in order to carry the designation. How can you tell if your accountant is designated or not? Generally, anyone who has met all of the requirements for the program and is legally allowed to use the initials CPA after his or her name will do so.

You can review the requirements of the CPA designation program on the AICPA website. CPA's must also adhere to their organization's set of ethics, which outlines proper procedures in handling client information as well as containing rules about independence and conduct. Client complaints about the ethics of their designated accountant can be brought to the attention of the ethics and conduct committees and if a violation is found, the accountant will face consequences, perhaps even a rescission of his or her professional designation.

How can you decide which type of accountant is best for your business? Should you hire your second cousin who works in an insurance company and has a

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