Personal accountant
From Wikipedia, the free encyclopedia
In the U.S. the phrase personal accountant describes a Certified Public Accountant or other graduate accountant who is retained for private financial services.
These services generally include:
- Tax and estate planning
- Representation in front of the IRS
- Asset valuation
- Formation and combination of partnerships, pass through entities, and corporations
- Portfolio management(of securities or real property)
- Risk Management
- Foreign banking and investment procedures ( wires, letters of credit, tax usually)
- Company audit and assurance services
- Real Estate Finance ( Mortgages, construction lending, mezzanine financing,structuring joint ventures)
- Retirement Planning (Pensions, 401ks, RAMs may or may not be portfolio related)
- GAAP Financial reporting for the client's entities
- Database Financial Systems implementation
- Anything your attorney needs a calculator for
The last one is very important. There is a big difference between an Attorney and a CPA. Attorneys have the secrecy of your financial affairs protected by the attorney-client privilege (highly enforced in US courts) BUT they must prove their ability to make financial decisions through experience and limited training/certifications.
The CPA is the highest qualification any financial professional can have. For example, a CPA can apply to be a CFA, CMA, CIA but its not as easy vice versa. You will find that many attorneys who are also CPAs were CPAs first.
Here's a practical illustration. Consider a real estate attorney who is certified by the IRS to practice tax law. This person could help you, among other things, value the personal or entity wide tax consequences of a property transaction, file taxes with local and federal government for the entity owning the property, even help you with strategy and interpreting financial statements, but they cannot ATTEST to the accuracy of the entity's financial statements or even the underlying business data --which is the first qualification needed when dealing with lenders or the government. This power of assurance assumes knowledge of internal control procedures and regulations(SOX 404), sophisticated statistics based auditing techniques, and many other things that go beyond debits and credits or what business electives your attorney decided to take in law school.
Also when things go wrong, a material departure from GAAP is grounds for revocation of the CPA--with an attorney any mistake where a calculator is involved (apart from fraud) and you are on your own--you must sue for malpractice.
