People often confuse the roles of accountants and certified public accountants (CPAs). While they are much alike, many of the responsibilities and levels of authorities differ. All CPAs are accountants, but not all accountants are CPAs.
A CPA has passed the CPA exam and meets specific state and education licensing. A CPA is a highly sought after accounting position, but what makes the two so different? Here are a few differences between the two positions.
CPAs have a higher level of responsibility, and they perform auditing, tax, and financial services for individuals, corporations, and organizations. Many businesses are required to have a financial statement audit and only a CPA can perform this service. A CPA works with an accountant to oversee the financial records of their clients. CPAs are also considered fiduciaries with the power to act on behalf of their clients, whereas an accountant is not considered a fiduciary.
Licensing and Requirements
A CPA has passed a test for licensing in the state in which they intend to work. They must also complete 150 hours of college coursework and must spend a year under the supervision of a CPA after graduation. They then must pass a test on business, tax, auditing, and general accounting skills. An accountant must meet these requirements in order to use the CPA designation legally.
A CPA must take 80 hours of continual education every two years throughout their career in order to stay up-to-date on the tax code and accounting changes. They are also expected to follow a strict code of ethics to meet the high standards of their profession.
Taxes and Regulations
An accountant without a CPA certification will be able to prepare a proper tax return, but a CPA offers better advantages to their clients. CPAs tend to be more knowledgeable in tax codes because of their education and multiple exams. CPAs also have the authority to represent clients before the IRS if an audit is required, but an accountant without a CPA certification is not able to do so.