CPA vs Accountant
Can there be a lawyer without the prerequisite LLB degree, or for that matter a doctor without the basic MBBS degree? No, would be the answer of all of us. But a person can be an accountant without having a degree or certification in his name. Many small businesses hire the services of people having knowledge of accounts and financial statements to keep their books. On the other hand, a CPA is a professional who has the professional certification to work as a certified accountant in his state. CPAs are naturally professionals who are accountants whereas the same cannot be said about accountants who can be CA, CPA, ACCA, CMA, or may not hold any of these certifications altogether. Let us take a closer look.
CPAs are Certified Public Accountants having clout and respect in the field of accountants having lesser or no certifications at all. This is because only a few of those studying accounts are able to clear the Uniform Public Accounting Exam, and have the intelligence along with integrity and ethics to maintain high standards of professional accounting. The exam is so tough that only about 20% of those taking it are able to clear them, and many of them are able to clear in their 2nd, 3rd, and even 4th attempt. CPA is considered to be the US equivalent of CA exam popular in UK and other commonwealth countries. The exam was conceived as a tool to standardize the competencies of accountants performing audits and preparing financial statements of businesses. Even after passing the grueling exam, all CPA’s are required to maintain the highest professional standards and have to keep up with the ever changing rules and regulations in the world of accounting. All CPA’s are required to complete 80 hours of education so as to keep abreast of all that is new in the accounting field.
CPAs are accountants of the highest degree who not just prepare tax returns of individuals, but also act as financial strategists and manage finances of individuals and businesses. They also help in diversifying businesses while performing the basic duty of preparing financial statements and auditing companies. CPA’s have the expertise to analyze information to help businesses take right financial decision. This means they can help a business increase its profitability.
What is the difference between CPA and Accountant?
• An accountant is a person having knowledge of accounts and can keep books of a small business, whereas a CPA is a Certified Public Accountant who is a true professional having attained the certification or degree in the world of accounting.
• A CPA is also an accountant though he has much more clout and respect than an accountant without a professional certification.
• The opinion of a CPA is final and holds more weight than that of an accountant.
• CPA is certified to carry out audits whereas an accountant cannot.
• CPA is a representative of a business while dealing with IRS, whereas an accountant is called up only when he has prepared the tax returns of an individual.