Accountant vs CPA

Accountant vs CPA | Accounting Smarts
Charles Hall

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Charles Hall

on

April 6, 2022

If you are thinking about getting an accountant or a CPA to help with your financial needs, it is important that you know the difference between the two.

If you are thinking about getting an accountant or a CPA to help with your financial needs, it is important that you know the difference between the two.

An accountant is someone who prepares financial statements and other information for businesses and individuals, while Certified Public Accountants (CPA) specialize in providing assurance, advisory, tax, and other services to those same groups of people as well as other organizations like non-profits.

There are significant differences between the two professions; an accountant does not have to be licensed or certified, while a CPA must meet specific education requirements. For example, CPAs are trained to provide expert opinions on accounting matters that might involve complex legislation or regulations.

Our experts have years of experience in both the CPA and accountant professions. This includes working with a diverse range of clients, from new starters in the industry to experienced professionals. So, without further ado, let's start this accountant vs. CPA comparison.

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Table of contents

Qualifications

The Accountant Profession

Accountants don't have to meet any specific academic requirements like a CPA. Anybody can get their license and start working as an accountant after taking the Uniform Certified Public Accountant Examination (CPA Exam), which is divided into three sections:

Financial Accounting and Reporting - A minimum score of 70 percent on this section is required for candidates to be eligible for licensure

Auditing – Candidates must pass with at least 75 percent or higher

Taxation – At least 68% needs to be achieved by test-takers to gain certification.

An accountant might choose more specialized fields such as forensic accounting, cost management, tax law compliance, financial planning, etc. As opposed to CPAs who generally specialize in one area during their studies like auditing, taxation, or assurance services.

Some other certificates and licenses available for accountants include:

  • Certified Internal Auditor (CIA) – This qualification covers designing, implementing, and evaluating an organization's financial internal controls. Accountants with this certification can work as business consultants who help companies run their accounting operations more efficiently. And provide advice on improving risk management procedures, among many things.
  • Certified Management Accounting (CMA) – The CMA is a rigorous program that provides candidates with knowledge in cost/managerial accounting, planning & control, etc. These are generally not covered at the degree level.

The CPA Profession

The CPA profession has very strict requirements, including studying for four years at an accredited university. There are also specific prerequisite courses that candidates must take before they can sit for the Uniform Certified Public Accountant Examination (CPA Exam).

These include courses in business law, accounting principles, and others.

Aspiring CPAs must complete a license-qualifying degree program from an accredited university registered with the American Institute of Certified Public Accountants (AICPA). To become a member, candidates must meet the following requirements:

  • A bachelor's degree; or four years of experience in public accounting and one additional examination section are also required
  • They should have passed all sections of the CPA exam with at least 75 percent in each section
  • They need to complete 150 hours' worth of education every year for three years prior to applying.
  • The CPA profession has many sub-specialties, most of which require additional formal training, education, and experience. This includes fields such as:

Forensic Accounting – Requires at least 30 semester hours in accounting courses)

Management Consulting – Requires at least 36 semester hours plus six months of internship) etc.

There are also some state-level requirements and individual licensing boards that have their own set of rules for those who want to work as a CPA.

While the Accountant Profession focuses more on bookkeeping activities that can be done by anyone who holds a license; The CPA Profession requires specific qualifications, as noted above. CPAs focus on complex taxation issues, internal controls over financial reporting, etc., which requires technical expertise in these areas and leadership skills (U.S Bureau Labor Statistics).

Essential Skills

For Accountants

Accountants need to maintain accurate records, identify issues and opportunities for improvement within their organization. They also need to be able to communicate effectively with clients at all levels of the business hierarchy.

Some essential skills that accountants require include:

  • Attention to detail – One small mistake on a record or document can have serious effects further down the line if not corrected immediately, so this is something that needs constant attention.
  • Communication Skills - As noted above, communication is key when working as part of a team for running projects and tasks. This includes both written and oral communications between different members of staff etc.
  • Problem-solving abilities – Accounting requires problem-solving, which means being able to solve any issue quickly and efficiently. This can involve anything from resolving internal issues within the organization to solving complex problems that arise when dealing with clients etc.

For CPAs

CPAs work with their clients to provide financial reporting and tax compliance services. The skills required for this job are, therefore, very different from that required of an accountant, involving:

  • Familiarity with accounting systems – CPAs need to know how these work and what records they need to use to meet requirements set out by the relevant authorities, such as the IRS, etc.
  • Strong analytical skills - This involves looking at any given situation or problem and finding logical solutions through analysis based on data available etc.
  • Technical expertise - Many sub-specialties within public accounting require specific knowledge, including auditing, taxation, advisory services, etc. So, it is important to be able to demonstrate expertise in these areas.
  • Leadership skills - This is an important skill to have since CPAs are required to oversee projects and ensure that all team members are carrying out their tasks efficiently etc.

There are many attributes which either profession requires, some overlap between them. Still, each one has its own set of essential skills which need to be demonstrated by individuals who want to work within this field successfully.

Job Market And Career Prospects

Accountants and CPAs both work in the accounting industry. However, their roles vary greatly depending on their education and training. Each one also has different career prospects and specific outlooks for the future depending on current market trends, etc.

For Accountants

An accountant is typically employed by a company or business to maintain records, record transactions, compile reports, recommend actions, prepare financial statements, etc.

The job outlook for accountants is projected at an 11% growth rate until 2022, making it a very stable profession with good long-term prospects for individuals who want to pursue this career. (U.S Bureau Labor Statistics).

Accountants can also choose to work in other fields besides public accounting, such as education and training. They may even decide to become self-employed if their organization does not offer this option etc.

For CPA

CPAs work for their clients, providing a variety of services, including financial reporting and tax compliance. They can also enjoy many benefits such as flexible schedules etc., depending on the organization they are working within.

The job outlook for this profession is projected at a 13% growth rate until 2022, making it an exciting and interesting field to be involved in with good long-term prospects (U.S Bureau Labor Statistics). This also makes it one of the fastest-growing professions within the accounting industry.

A CPA's salary can vary greatly depending on geographical location or industry they choose to work in etc. However, the average salary is expected to be higher than an accountant working within private practice. This is because CPAs typically have more advanced skill sets than those who only hold a bachelor's degree – the minimum level required by law, etc.

This means their remuneration packages are often better since companies know that individuals from this career track will need specializations like audit services, taxation, etc.

Charles Hall

Charles Hall

Charles has spent 25 plus years in the world of accounting and business. His experience includes working as a CPA/Auditor international accounting firms. He has worked as a controller and as a COO for small to medium sized companies.

Learn more about Charles Hall