CPA vs ACCA
Since CPA and ACCA are both accountancy terms that refer to professional accounting qualifications, knowing the difference between CPA and ACCA may be of use at some point of time. Especially to someone with an interest to obtain a career in the field of accountancy, it is important to find out the difference between CPA and ACCA before enrolling into a course of study in accounting. Anyone with a qualification in CPA or ACCA is capable of becoming a professional accountant in his or her specified area. Both these qualifications are regarded as important qualifications and are essential to those who are considering a career in accountancy.
What is CPA?
CPA, also known as Certified Public Accountant, possesses a statutory status in the United States and has several branches across the states. Based in the United States of America, the history of CPA dates back to the 1800’s when it first started out. To practice as a public accountant in US, you need a CPA license. The license is provided by one’s state of residence and the requirements vary from state to state. However, in general, the CPA licensing is a 3 step approach; Education, Examination, and Experience. In order to become a certified public accountant, first you need to fulfill the educational requirements, then pass the CPA examination, and obtain relevant practical experience. The CPA examination is conducted by the American Institute of Certified Public Accountants (AICPA). It is a 14 hours Uniform CPA Examination. The examination consists of 4 sections; Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting, and Regulation. To qualify, one has to score to score over 75% in all four sections. The exam has MCQ, simulation, and written type of questions. The eligibility to sit for the CPA examination depends on the state for which you want to obtain the license. Those who desire to become a certified public accountant must also possess relevant work experience, which again depends on the state, but generally, it is 1 to 2 years under a CPA.
However, CPA denotes different bodies in different countries. In Canada, it is Chartered Professional Accountants. CPA Canada is an integrated body of CPA, CA, CGA, and CMA. In Australia, it denotes Certified Practising Accountants. To become a Member of CPA Australia, you have to follow the CPA Program conducted by them and pass the examination. In addition, you need to have 3 years relevant practical experience. CPA Australia is also recognized internationally. In Ireland, it is again Certified Public Accountants. CPA Ireland offers its own CPA qualifications and has mutual recognition agreements with accountancy bodies in countries like Australia, Canada, and India. Its study programme is flexible and has various pathways leading to CPA qualification.
What is ACCA?
ACCA (Association of Chartered Certified Accountants) was initiated in the year 1904 and is based in the United Kingdom. This organization that was initiated with only eight accountants has grown significantly since then, with members in countries all over the world. Those who desire to become a Member of ACCA are required to pass the exams that lead to ACCA professional qualification and professional ethics module, in addition to at least three years of proper working experience in the relevant field. The ACCA programme of study focuses on Corporate Reporting, Leadership and Management, Strategy and Innovation, Financial Management, Sustainable Management Accounting, Taxation, Audit and Assurance, Governance, Risk and Control, Stakeholder Relationship Management, and Professionalism and Ethics. The course of study is very flexible. You can join ACCA at any level depending on your existing qualifications.
1. ACCA Foundation Level
Do you aspire to become an accounting professional, but worried that you don’t have any pre-qualifications? You don’t need to worry; you can join at the Foundation level ACCA programme because it does not ask for any entry requirement. It is open to anyone who desires to enter into the accounting field of study.
2. ACCA Professional
The entry requirement to join at this level is a pass in GCSE 3 subjects and A Levels 2 subjects; all 5 need to be different subjects and inclusive of Maths and English.
The competency framework at Professional level is divided again into three levels.
1. Level 1 Fundamentals – Knowledge
It has 3 modules: Accountant in Business, Management Accounting and Financial Accounting.
Completion of level 1 examinations leads to Diploma in Accounting and Business.
2. Level 2 Fundamentals – Skills
It has 5 modules: Corporate and Business Law, Performance Management, Taxation, Financial Reporting, Audit and Assurance, and Financial Management.
Completion of level 2 examinations leads to Diploma in Accounting and Business.
3. Level 3 Professional – Essentials and Options – at the end of completion of level 3 and passing all the examinations, you will be qualified as ACCA Professional.
It has 5 modules – 3 essentials and two optional subjects. The essentials are Governance, Risk and Ethics, Corporate Reporting, and Business Analysis.
The duration of total study, on average, is 3 to 4 years, and you need to sit for around 14 exams, if you are not exempted from any subject.
To become a Member of ACCA, on top of ACCA Professional qualification, you need at least 3 years of relevant work experience and complete a Professional Ethics module, which is conducted online.
What is the difference between CPA and ACCA?
CPA and ACCA are crucial qualifications for all accountants as they vouchsafe their expertise in the subject matter they handle. However, CPA and ACCA have different requirements for candidates who wish to qualify for these qualifications that are one of the many aspects that set them apart.
CPA was initiated in the USA. ACCA was initiated in the United Kingdom. The CPA exam is divided into tests on Auditing and Attestation, Business Environment and Concepts, Financial Accounting and Reporting and Regulation. The ACCA is divided into Fundamentals and Professional, where the fundamental focuses on knowledge and skills and the professional focuses on essentials and options. CPA is a professional body whereas ACCA offers education as well. Though CPA is internationally recognized, CPA license is specific to a state in USA whereas ACCA is an internationally recognized qualification.
Summary:
CPA vs ACCA
• Both CPA and ACCA are accountancy qualifications for professional accountants.
• CPA is based in the US while ACCA is based in the UK.
• Unlike CPA, ACCA offers educational programs leading to professional accounting qualifications.
• CPA license is specific to a state in US, whereas ACCA is global.
• CPA also denotes different professional bodies of accountants in different countries.
Photos By: CPABC (CC BY 2.0)
Further Reading:
- Difference Between CPA and Accountant
- Difference Between CA and CPA
- Difference Between CPA and CIMA
- Difference Between ACA and ACCA