An accountant and a Certified Public Accountant (CPA) are both accountants, but not all accountants are certified as CPAs.
A Certified Public Accountant has met specific requirements in their state and passed an exam to obtain a CPA designation, which is issued under The American Institute of Certified Public Accountants (AICPA).
These professional accountants are committed to high standards of both ethics and professionalism. Here’s how CPAs and regular accountants differ—and why it might matter which one you choose.
CPAs Are Required to Have Education and Experience
Certified Public Accountants are required by the AICPA to have a certain amount of college coursework completed, which will vary by state. The requirements usually stipulate specific course hours completed in upper-level classes.
Some states require CPAs to graduate with a bachelor’s degree in accounting, and then they must work under an existing CPA to gain experience. Once the required coursework and experience are completed, the accountant can then register to take the certification exam.
Even after they pass the exam, CPAs must complete a certain amount of continuing education hours every year to stay current on tax, accounting, and auditing best practices.
A regular accountant isn’t required to meet any of these requirements; essentially, anyone who does bookkeeping can call themselves an accountant without any type of certification or education.
CPAs Have an Ethical Obligation to Their Clients
In addition to meeting certain experience and educational requirements, CPAs have an ethical duty to not only act in the best interest of their clients, but also in the public’s best interest.
CPAs are required by the AICPA to follow a professional code of conduct which includes disclosing conflicts of interest, keeping client confidentiality, acting in the best interest of the public, and maintaining integrity and objectivity.
Regular accountants aren’t required to abide by this code of conduct and as such, have no fiduciary duty to the individuals or businesses they work with.
CPAs Are Generally More Knowledgeable about Tax Codes
As a result of their educational requirements, CPAs tend to have greater knowledge of tax law and tax codes. CPAs are also legally able to represent clients when it comes to matters pertaining to the Internal Revenue Service (IRS), including audits, payments, and appeals.
A regular accountant is not able to represent clients in matters of the IRS. When it comes to filing a tax return, an uncertified accountant is considered to have no standing with the IRS, meaning although they can technically prepare and sign your tax return, they can’t assist in the event of an audit or collection issues.
CPAs can prepare tax returns for both businesses and individuals and sign a tax return on your behalf with the assurance of representation should an issue arise.
Is It Important to Work with a CPA Over a Regular Accountant?
Whether or not it’s important to work with a CPA over an uncertified accountant depends on what you need them for.
For instance, if you have a straightforward tax return, a regular accountant will usually suffice. However, if your taxes are more complicated, going with a CPA can ensure accuracy and give you peace of mind.
While the services of a CPA generally cost more, these professionals are invested in their careers and will be around should you need them for records or to use their services in the future. If you need an accountant for your business, a CPA might be the best investment as they’re someone you can rely on year after year for a sustainable partnership.
So there you have it—while CPAs and accountants are both accountants, the certification of a CPA implies more experience and knowledge which both businesses and individuals alike may prefer when hiring an accountant.