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Confused Between CPA Vs. Accountant? Here Is What You Need To Know

People take different career paths in an accounting career, and all of them have different job functions, education, training, and needs. Out of all the accounting work profiles, some of the most needed ones are CPAs (certified public accountants) and accountants. When looking at CPAs vs. accountants, their responsibilities vary, and the role of a CPA is much more complicated than an accountant. As CPA is a sought-after and a higher skill credential than a basic accountant, its business roles are also broader than your regular accountant. Let’s understand these job roles with their duties and scopes, CPA vs. accountant, and which one would you need for your firm?

Basic Duties Of An Accountant

Small, medium, and large firms need accountants to record and report monetary transactions, perform bookkeeping tasks, take care of tax matters and handle general responsibilities of accounting. After analyzing financial records, reports, tax returns, and budgets, they offer a large picture of the financial situation and decide whether to choose a CPA vs. an accountant. Their duties can vary notably according to the industry, or the firm the accountant is working for, but these normally consist of:

  • Bank And Credit Account Reconciling
  • Completing Annual Audits
  • Analyzing Variances In Income Statements
  • Assisting Budget Preparation And Management
  • Documentation Of Financial Transactions
  • Offering Financial Advice
  • Overseeing Tax Preparation For Meeting Federal Regulations
  • Accounting Systems Improvement
  • Accountants generally work with other senior accountants and finance experts. 

Duties Of A CPA

The duties of a CPA vs. accountant notably vary. By a CPA, we mean a public accountant. He is an accountant with a state license practice. CPAs let businesses manage their expenses through investments and help finance planning. They are skilled enough to perform other advanced taxation and auditing services without a license. Some of their main job duties are:

  • Public companies auditing
  • Signing and filing state, local, and federal tax returns
  • Managing budget, cash flow, and accounting
  • Help clients in lessening tax liabilities

One of the main difference between accountant and CPA is that CPAs are helpful for individual clients, firms of all sizes, and the government. 

Comparing CPAs And Accountants

Let’s know how CPAs and accountants are different in categories like:

  • Laws and taxes
  • Work environment
  • Ethics and code
  • Fiduciary duties
  • Licensing, education, and training

Let’s know about the CPA vs. accountants, and the difference between the education, licensing, and training needs of CPAs and accountants:

Accountants’ Practice And Learning

Accountants qualify for jobs after getting a bachelor’s degree in finance, business management, accounting, or other fields, though most employers prefer accountants to have a master’s degree. An accountant’s training starts with an internship program in school and on-job training. When looking at CPA vs. accountant, accountants have to get more certifications for advancing their careers, including higher certifications like:

Certified Management Accountant (CMA): The certification is about accounting management for firms.

Certified Internal Auditor (CIA): The certification focuses on information technology and risk and control. It is the international designation for internal auditors. 

Qualified Fraud Examiner (QFE): The certification prepares people for auditing and accounting about forensic methods, fraud investigation, fraud law, and preventing loss. 

Chartered Financial Analyst (CFA): The certification prepares aspirants for careers in the investment and finance industry. 

CPA Education, Practice, And Licensing

The difference between a CPA and an accountant is that CPAs should have a bachelor’s degree in accounting and finances and would need to finish more courses to sit for the Certified Public Accountant certification exam. Regular accountants need training for six months to two years, based on the state’s needs, and should clear the CPA exam to get into the CPA Academy

The CPA exam is conducted in four parts:

  • Attestation and auditing
  • Financial accounting and reporting
  • Business environment and concepts

Regulation

Another difference between a CPA and an accountant is that all individuals should score up to 100 points, and a CPA candidate should score around 75 points for a passing grade. After completing an exam, the candidates have 18 months to three years. Many states also need the candidate to pass an ethics exam. While comparing CPAs vs. accountants, CPAs should also complete continuing education, generally up to 40 hours in a year or 80 credits in two years. 

Laws And Taxes

A significant CPA vs. accountant difference is that accountants legally prepare tax returns, though they can’t offer as much knowledge about tax codes as CPAs. CPAs also represent clients before the IRS in case of a tax audit, and they also sign tax returns. Accountants also don’t have legal authority with the IRS.

Code Of Ethics

Regular accountants don’t have governing bodies and any certain ethics codes. However, here the CPA vs. accountant difference is that the CPAs are recognized by the American Institute of Certified Public Accountants, and they should abide by a strict ethics code with the standards of the AICPA. The ethics and codes of AICPA have five categories making clear differences between CPA vs. accountant:

Responsibilities: CPAs have an important responsibility to offer exceptional quality services.

Public Interest: All CPA actions should be in the public interest. 

Independence and objectivity: CPAs should be uninvolved and objective with interest conflict

Due care: CPAs should perform their abilities and seek guidance and continuing education with evaluations. 

Work Environment

The difference between the work environments of a CPA and an accountant is that regular accounts generally work in an office and full-time environment and should work on nights and weekends. CPAs also work in an office, but they can also work from home and would need to travel to perform audits or business functions. Sometimes they also testify as an expert witness for a client in court. 

Salary

Salary-wise, CPAs vs. accountants have different packages. Both CPA and accountant salaries vary, and they vary based on their education, the firm’s level, location, and the industry. 

Career Scope

The Bureau of Labor Statistics of the United States suggests employment for auditors and accountants, including CPAs and accountants, with 6% between 2018 and 2028, which is around the same rate for all occupations. Growth in such careers is linked to economic growth. 

Should You Hire An Accountant Or A CPA For Your Business?

Rather than being confused about CPA vs. accountant, it’s good to hire both accountants and CPAs to manage a large business with many business functions. An accountant is like a daily asset and records money transactions, makes journal entries, manages accounting tasks like amortization and depreciation, bank reconciliations, and analyses other financial statements. Most businesses with an expert accountant don’t need the services of an outsourced CPA. 

Whether Firms Need A CPA Or An Accountant?

There are times when it becomes hard to decide between a CPA and an accountant. However, it is quite simple to decide sometimes, like in the following situations.

When you’ve got complicated tax returns: For complex tax filing tasks, it’s best to hire tax experts like CPAs. 

For auditing: CPAs help with the auditing process. They also file taxes on behalf of their clients.

For a public corporation: With a CPA, you get audited financial statements that the law needs. 

For firms that started recently: CPAs are helpful for the big picture. They also represent clients on behalf of the IRS. 

When Hiring An Accountant Is Senseful

An accountant is as valuable as a CPA for certain situations. There are times when accounting is the better choice among CPAs vs. accountants. 

For the routine transactions: Accountants organize and record finance transactions

When management accounting is necessary: Accountants are great for internal cost analysis. They also make recommendations to cut expenses or increase revenue. 

For creating a budget: Staff accountants are needed to form a budget with access to the firm’s performance metrics. 

For analysis of financial statements and records: While most firms select CPAs for such jobs, accountants with other qualifications are also fit to do these jobs. It’s a smart choice to have an accountant for reconciliation and analysis. 

CPA Vs. Accountant

For CPA vs. accountant, would a CPA be a better option than an accountant or vice versa? The answer to this CPA vs. accountant question is subjective and based on the circumstances. Both accountants and CPAs are valuable assets for any business. In a perfect world, the small business takes benefits from the expertise of both CPAs and accountants after using an accountant to manage daily finance activities and calling a CPA for taxes, auditing, and business consulting. 

Final Outlook

So, while firms always don’t need the services of either CPA or accountant at the same time, they should know there are times when they would need one for managing their small business. You can consult Business Tax Benefits to get in touch with the most skilled industry-leading CPAs and accountants. We offer leading-edge tax solutions for businesses of all sizes and types, and our portfolio of happy clients worldwide speaks for itself. 

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