What’s the Difference between an Accountant and a CPA?

Many public accounting firms and law offices prioritize hiring CPAs due to these specialized legal responsibilities. Many employers in public accounting firms, financial services, and corporate finance departments prefer or even require candidates hold a CPA license, especially for senior-level positions. Having your CPA license opens the door to more career options, including financial analysis, consulting, and management accounting as well as tax accounting and auditing. According to the BLS, a bachelor’s degree in accounting or a related field is typically needed to pursue career opportunities as an accountant or auditor.

CPAs can also represent clients in front of the IRS during a tax audit—something that Enrolled Agents and tax attorneys can do as well. This means a CPA is likely to be more knowledgeable in the field of accounting than someone who has not earned the designation. A CPA is also allowed to perform certain duties that regular accountants are not permitted to do.

Maintaining a CPA License

Accountants may explore many different career prospects, including employment in business offices, nonprofits, healthcare, insurance operations and even forensics. Because CPAs have additional qualifications, they have more career prospects. AICPA notes that CPAs might work in public accounting in audit, tax and management consulting areas. CPAs can also explore business and industry employment, working in areas like financial accounting and reporting, management accounting, financial analysis and treasury management. CPAs also have the option of providing specialized services like financial forensics, business valuation, personal financial planning and IT consulting.

You use an accountant’s services daily, recording financial transactions, reconciling statements and performing financial analysis. If you are a public corporation, only a CPA can prepare your audited financial statements. As an individual, you need a CPA for complicated tax returns and to help and represent you if the IRS is auditing you. In general, you must have 150 extra hours of either undergraduate or graduate education. You have to have from six months to two years of experience working in public accounting, depending on the state you live in.

Cpa skills

Another distinction is that accountants who are not CPAs would not be able to represent their clients in matters relating to IRS audits. In the following sections, we’ll examine and clarify the differences between accountants and CPAs in several key areas, including education, requirements, licensing/certification, responsibilities and job opportunities. A certified public accountant is an accountant who has met the educational, certification and licensure requirements allowing them to use the CPA designation. To succeed in any corporate environment, accountants must have a variety of skills. After receiving a bachelor’s degree, they need to ensure that they are prepared to handle financial data management, advice and analysis, reporting compliance, and financial report preparation.

• In addition, CPAs are required to adhere to a strict code of ethics, so you can be confident that they will always act in your best interests.
• Assurance services or public accounting are the principal services provided by CPAs.
• The demand for financial transparency and compliance ensures a wide range of opportunities for accountants in public accounting, corporate finance, government agencies, and non-profit organizations.
• Individuals dealing with straightforward financial situations might find an accountant’s services adequate.
• On the flip side, private accountants focus on managing internal financial data and strategies within organizations.

However, they have different requirements and focus on international accounting standards. Accountants, on the other hand, can provide valuable financial advice and help with tax preparation, but may not possess the same level of expertise or legal standing as a CPA. Ultimately, the choice between a CPA and an accountant will depend on your specific needs and the complexity of your financial situation. In the assurance service category, only a CPA can prepare an audited financial statement or a reviewed financial statement, although any accountant can prepare a compiled financial statement. Assurance services or public accounting are the principal services provided by CPAs. On another note, CPAs who operate as consultants do not work as auditors.

Pass the CPA exam.

Businesses often benefit from the diverse skill set of a CPA, especially those facing complex tax situations or requiring regular financial audits. Coursera’s editorial team is comprised of highly experienced professional cpa vs accountant editors, writers, and fact… Find your state’s Board of Accountancy and review its website to get clarity on what you’ll need to do. You’ll also represent clients before the IRS to help them resolve their tax problems.

• For example, they possess the authority to file reports with the SEC and conduct attestations.
• However, costs to negotiate the contract price are not necessary to develop or obtain the software.
• Your financial institution may choose to change its core accounting system for a variety of reasons.
• The exam is administered by the American Institute of Certified Public Accountants (AICPA) and is taken by more than 100,000 candidates each year.
• In some cases, the differences are insignificant, while in other cases, those differences are of vital importance to your business.
• The average CPA salary is around $96,0001 while the average salary for non-CPAs is around $62,0002 per year.
• There are no guarantees that working with an adviser will yield positive returns.

Whether it is better for you to pursue CPA certification and licensure is a question that only you can answer. That’s because it depends upon what career opportunities you’re interested in pursuing. If you want to pursue a career in public accounting, such as working for a large accounting firm, then you may have to become a CPA to pursue your goals. If you plan to work as an accountant within a private company, such as a small or medium sized corporation, becoming a CPA may not be a job requirement.