Many business owners who consider hiring a professional to handle their finances and bookkeeping are unsure about the differences between an accountant and a CPA. While there are some minor variations, there are a few important factors to consider when making the right decision for your company. Let’s go over the differences between a CPA and an accountant.
Defining Both Terms
Business owners must understand that while every CPA is an accountant, not every accountant is a CPA. The technical definitions of the two roles are:
- Accountant: someone who is skilled in accounting or who manages public or private accounts
- Certified Public Accountant: an accountant who has met state law requirements and has been granted certification.
Now that we know what each term means let’s look at the difference between the two.
One of the significant differences between an accountant and a CPA is that a license is not required to become an accountant; however, one is required to be a CPA. CPAs must go through rigorous testing and strict requirements for licensing in the state they intend to practice. CPA candidates must finish 150 hours of college coursework, including specific upper-level accounting, auditing, and business core courses.
A CPA has a legal responsibility to act in the best interest of the client. This is particularly important since a CPA often is responsible for creating the financial statements for a company. Many businesses required to have a financial statement audit or review will need a CPA to perform these services and issue the essential reports. Non-CPA accountants are not required to represent their clients.
Understanding of Taxes and Regulations
CPAs also have a specialty within the income tax preparation industry, and they offer defined services to the client which accountants cannot provide. Additionally, many CPAs are well versed in tax codes as a result of the extensive licensing requirements and continuing education requirements. Another important factor is that CPAs are eligible to represent clients before the IRS if it is required, while a non-certified accountant is not.
Code of Ethics
CPAs need to follow ethics which means deciding on account and finance situations in accordance with the ethics of integrity, objectivity, confidentiality. They also have the responsibility to exercise sensitive and moral judgments in all their activities. Every certified account has to participate in specific ethics training to get their certification. These ethics ensure that a CPA always meets the highest standards of the profession.
Contact Bowman & Company Today
Bowman & Company CPA, PC provides all of our individual and small business customers with experienced, accurate, and affordable financial services. Our financial services aim to decrease your taxes and increase your net worth through responsible, timely, and accurate record keeping. We offer our services to clients throughout the Washington, D.C., metropolitan area, including Maryland and Baltimore County, Columbia, and Howard County. For more information on our offerings, contact us online or call us at (410) 381-8121. You can also find us on Twitter, Linkedin, Facebook, and Youtube.