The difference between a CPA
and a Regular Accountant
There are several similarities between a CPA (Certified Public Accountant) and a regular accountant, but there are differences as well. To put it in simple words, CPAs are specialized accountants while other accountants are general accountants. That does not undermine the role of either professional.
All CPAs are also accountants, but not all accountants are CPAs. There are key differences in the tasks they perform, and in the training they receive. You need more rigorous training and specialization to be a CPA, which involves at least 150 hours of college classes.
Meaning Of CPA Vs Accountant
A CPA is licensed by the state to perform a range of financial activities that include signing tax returns, representing a client, and performing audits. An accountant, on the other hand, is primarily a processor of financial tasks. They handle the day-to-day activities of a business or individual for organized transaction records. However, accountants cannot sign tax returns or represent clients during an audit. A CPA can perform all the tasks of an accountant, but it doesn’t work the other way round.
What Can A CPA Do That An Accountant Can’t?
CPAs can do more specialized tasks that are outside the gambit of an accountant. For example, a CPA can represent their client in front of the Internal Revenue Service (IRS) during tax audits. They can also sign tax returns and provide attestation services.
A regular accountant cannot do any of these tasks. They are concerned with the operational side of accounting which makes sure everything is in place. In many ways, an accountant complements the work of a CPA and vice versa.
Is A CPA Better Than A Regular Accountant?
It would d be incorrect to say that a CPA is better than an accountant. While they do have more abilities and authority, the work of an accountant is no less useful. Without accountants, CPAs would not be able to perform their respective duties.
A CPA will be necessary for many organizations that must have an audit of financial statements or reviews performed to complete the task and produce the necessary reports. Furthermore, CPAs are seen as fiduciaries with the responsibility and authority to work in their clients’ best interests and in their capacity. Non-CPA accountants are not regarded as acting in the clients’ best interests.
When it comes to preparing tax reports, both accountants and CPAs can do the work. But CPAs often have more experience and knowledge in the field, apart from having more authoritative powers. As we already mentioned, a CPA can sign a tax return but a regular accountant can’t.
To put it in simple words, a CPA and a regular accountant operate in the same field but in different capacities. Accountants work as manual processors who refine and manage the accounts of a person or business. CPAs, on the other hand, work with clients to help them save and manage money.
Licensing And Training
CPAs undergo rigorous training to get their CPA licenses. CPA applicants are required to finish 150 credit hours, with a particular number of hours being mandatory for upper-level courses in accountancy, auditing, and business ethics. The American Institute of Certified Public Accountants oversees all CPA licenses and courses in the country.
Even after getting a CPA license, CPAs must continue taking courses and classes to update their skills. There are no such requirements for non-CPA accountants. CPAs must also follow a code of ethics, while anything of that nature is absent from an accountant’s training.
Pay And Professional Life Of CPAs vs Accountants
On average, CPAs are paid more than non-CPA accountants. On the other hand, experienced accountants earn more than inexperienced CPAs. Much of it also boils down to how good you are at your work.
Both CPAs and accountants are well paid. CPAs, however, increase their earnings with experience and skills. The same is not true for accountants all the time.
It’s obvious that the clients you work for determine how much you’ll earn. While CPAs generally earn more, accountants are not far behind. A small business CPA pay can be equivalent to a large business accountant’s pay. There’s immense scope for growth in this field, and anyone can be a successful CPA or accountant.
As you can see, there are several key differences between CPAs and accountants. However, that does not make one more important than the other. They perform separate roles and require different skills.
There’s no denying that it’s tougher to be a CPA than an accountant. It’s also rewarded with higher pay. The CPA license is mandatory for every CPA, but there’s no such licensing or authorizing body for the accountants.