What are the Differences between Accountants and CPAs?

What is the Differences in their Education and Credentialing?

Accountants do not have to be credentialed, according to “Wordpress.com ” unless they are over 18, are compensated for their work and prepare tax returns. In that case, the accountant must register and pass an exam given by the IRS to get a Preparer Tax Identification Number. Certified Public Accountants must have a degree in accounting from an accredited college. In addition, they must pass all four parts of the CPA exam:
• Auditing and Attestation
• Financial Accounting and Reporting
• Regulation
• Business Environment and Concepts

A Certified Public Accountant usually must have 150 credit hours before taking the exam. (In Colorado, that requisite does not apply until July 1 of 2015). They must also pass ethics exams from the American Institute of CPAs and obtain 1800 working hours, or one year, under the supervision of an actively licensed CPA. Most states require 40 hours of continuing education in a year, but some states allow professionals to get 80 hours in a two-year period.

How are CPA and Accountant Work Responsibilities Different?

Many tasks are identical and, based on that, some businesses hire accountants rather than CPAs because it is more cost-efficient if the corporation does not need the extra services a CPA offers. Both CPAs and accountants prepare financial statements, though only Certified Public Accountants can audit or review them. Both prepare taxes, but only a CPA has standing with the IRS to represent clients in tax disputes. Accountants can work in financial institutions as tellers, in business as part of the accounting department and they can do tax preparation. Certified Public Accountants can do those things, but they can also work in forensics fraud investigation or act as expert witnesses in litigation. They can be consultants and work in investment and financial planning. If a CPA holds a dual degree in management, he or she can work in human resources or be project managers. Certification in healthcare management would enable a CPA to be a hospital administrator. “US News.com” says accountants earned a median wage of $35,170 in 2012. In contrast, the median salary for a Certified Public Account was $63,550. Those CPAs who earn certification in other fields can expect to make more. The average salary for a hospital administrator, for instance, was $96,000.

The bottom line is that CPAs and accountants are similar, but Certified Public Accountants are regulated and have government standing. To get that standing they earn degrees and pass rigorous testing and work-experience requisites. Students considering careers in accounting should consider that getting a degree is the first step toward a business career that can be exciting and diverse. All CPAs are accountants, but not all accountants are CPAs.