Many people have confusion between CPA (certified public accountant), also known as CPA certified professional accountant and accountants. They both deal with accounting. They both require a lot of analytical skills and precision in their works to get to the designations.
However, they are not the same. There are considerable differences between the two, despite their superficial similarities.
Understanding the differences can help us avail ourselves of the right services from the right party. Below are the seven main differences between accountants and CPA certified professional accountant.
1 Overall Portfolio vs. Taxation
One of the main differences between these professionals is that the CPA's overall education and experience in the field make him or her suitable for handling the firm's complete portfolio. They, thus, undertake duties like dealing with the exchange commission and responsibilities of the company.
The accountant is more of the handler of the taxation and similar duties. He or she is usually not assigned any other task besides this. An accountant usually has a bachelor's degree. In some cases, an accountant working for a firm gets promoted to the CPA certified professional accountant.
Being an accountant does not have stringent criteria; as stated above, an accountant can be designated so with a mere bachelor's degree. He or she may additionally have to clear some examinations to get a job in the company.
On the other hand, a CPA has to clear strict academic examinations to be eligible for the post. The exam is rigid, and not everyone qualifies for it so quickly. To qualify for the exam, an aspiring CPA has to attend a minimum of 150 hours of college.
The course includes dedicated time in the higher-level accounting, business core courses, and auditing. Besides, upon clearing the exam, the candidate has to gain one year of experience under a practicing CPA's supervision and guidance.
Finally, to get a practicing license, they have to pass a comprehensive test of business, auditing, tax, and accounting skills. They have to attend educational classes throughout their career term; this helps them be up to date with the latest information.
3 Taxes and Regulation
Non-CPA accountants may prepare a proper tax return; however, the CPA gives better advantages to clients than the non-CPAs.
CPAs have better experience on the tax codes due to their CPA licensing exams and their continued education helps them with updated information.
Moreover, the CPAs are licensed and permitted to represent their clients in front of the IRS in case they ask for audit support.
Non-CPAs are not legally allowed to partake in any such practices. They may prepare drafts of a proper tax return. Also, because of their limited knowledge of such in-depth matters, they never handle such intricate accounting tasks.
4 Codes of Ethics and State Requirements
Apart from the licenses, the CPA also has to go through some other procedures. They have to follow the code of ethics and keep up the high standards of their profession. These codes are usually company-specific and title or role-orientated.
CPAs being at a high designation and handling such a critical matter of the company, has to ensure that their work's quality has to be perfect.
A regular accountant usually does not have such strict measures; however, the job nature demands precision. Many accountants working in a firm are aspiring CPAs who want to get promoted to the next job profile. Thus, they also maintain their quality to ensure a smooth job transition.
5 Additional Services
As stated, the CPA is only reserved for dedicated services that require a lot of precision and dedication. He or she is usually never relegated to extraneous tasks like bookkeeping and so. This kind of functions do not need a lot of specialization but need a lot of handling.
Bookkeeping services are assigned to the accountant, who also handles the accounting needs of a company.
Depending on the size and strength of the firm, there may be more than one accountant. This is to divide the workload and not create a backlog in the accountancy. Besides all the quality analysis and internal audit needs to be conducted to check the accuracy of the accountants' works.
Companies having a team of accountants have a senior accountant to assure that the quality of the work is never compromised. Besides, they also have an internal audit team to cross-check the finalized results.
CPA, on the other hand, is usually only one. This is because he or she has less work handling but needs to conform to the company norms.
These were the six differences between an accountant and a CPA certified professional accountant in a firm.