While all CPAs are accountants, not all accountants are CPAs.
A CPA is a certified public accountant who has met specific state and education licensing requirements and passed the CPA exam; as such, it’s a highly sought-after accounting designation.
So what are the main differences between CPAs and accountants? Why would a CPA designation be beneficial to your career?
Here’s a look at four differences between CPAs and accountants.
CPAs have passed rigorous testing and strict requirements for licensing in the state in which they intend to practice. CPA candidates must complete 150 hours of college coursework, including specific hours in upper-level accounting, auditing, and business core classes.
After graduation and a year of experience under the supervision of a CPA, candidates must pass a comprehensive test of business, tax, auditing, and general accounting skills.
After becoming licensed, CPAs must take continuing education classes throughout their career in order to maintain up-to-date information on issues and changes in the accounting world.
2. Fiduciary Responsibility
According to a survey conducted by the AICPA, CPAs are considered some of the business world’s most trusted advisers. Half of small business owners said they rely on CPA advice “always” or “often” when asked how often they resort to outside business counsel, ranking CPAs only slightly behind a spouse or family member.
Many businesses that are required to have a financial statement audit or review will find that only a CPA can perform these services and issue the required reports.
In addition, CPAs are considered fiduciaries with a legal duty and power to act on behalf of, and in the best interest of, their clients. Non-CPA accountants are not considered to be fiduciaries to their clients.
3. Taxes and Regulations
Accountants without a CPA certification may prepare a proper tax return, but a CPA offers distinct advantages to clients that non-CPAs cannot provide.
First, many CPAs are more knowledgeable in tax codes as a result of the rigorous CPA licensing examination and continuing education requirements. Another significant factor is that CPAs are eligible to represent clients before the IRS if audit support is required, while a non-CPA accountant is not.
4. State Requirements and Codes of Ethics
The license is not the only requirement to be a CPA. CPAs are also expected to follow a strict code of ethics and meet the high standards of the profession.