What is the Difference Between a CPA and Tax Accountant?

Each section is taken individually, and candidates can choose the order in which they take them. Candidates must pass all four sections of the exam within 18 months. The beginning of the 18-month time frame varies by jurisdiction. Accountants without a CPA certification may prepare a proper tax return, but a CPA offers distinct advantages to clients that non-CPAs cannot provide. Our knowledgeable team will provide you with comprehensive insight into all facets of accounting, such as tax, audit and assurance, litigation, business valuation, forensic accounting, healthcare accounting, and others.

Gaining an understanding the day-to-day responsibilities, career potential, job requirements and earning potential for the roles that interest you might help you determine the right path for your future. This means a CPA is likely to be more knowledgeable in the field of accounting than someone who has not earned the designation. A CPA is also allowed to perform certain duties that regular accountants are not permitted to do. While accountants are expected to perform all of these duties according to best practices and conduct themselves in an ethical way, there is no governing body that requires them to do so.

Is Becoming a CPA Better?

CPAs have a wide range of career options available, either in public accounting (that is, working for an accounting firm) or corporate accounting (working inside a company), or in government service. Individuals with the CPA designation can also move into executive positions such as controllers or chief financial officers (CFOs). Many businesses that are required to have a financial statement audit or review will need a CPA to perform these services and issue the required reports. Meet all your needs by working with an accounting firm like Pioneer Accounting Group. Get in touch with us today and we’ll help you with a custom solution for your business. No, we’re not talking about a WWE showdown of finance professionals.

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For example, Alaska requires CPAs to get 80 hours of CPE every two years, with a minimum of 20 hours per year. Accountants analyze and interpret the financial data of a company and prepare financial reports. Accountants may perform a wide range of finance-related tasks for their employer or their clients. CPAs are uniquely qualified to work in public accounting firms, which serve multiple clients across industries. These clients may be companies, governments or individuals, depending on the size and type of accounting firm. Each state has different requirements for taking the CPA Exam and earning CPA licensure.

Accountants typically have a bachelor’s degree in accounting, finance, or a related field. CPAs also hold a bachelor’s degree, but many states require CPAs to also have an advanced degree before they can sit for the CPA exam. In addition, CPAs are required to fulfill continuing education credits of up to 40 hours annually. After reading the information above, it’s apparent that there are several key differences when it comes to a CPA vs. accountant. Primarily, CPAs may have the opportunity to take on more responsibility than their non-CPA counterparts.

The agency tasked with tracking employment and salary data in the U.S. is the U.S. In their projections, the BLS makes no distinction between CPAs and non-certified accountants. Rather, the agency groups them together in the same employment category. Even if you think you may not become a CPA or you aren’t sure about your decision yet, it’s a good idea to choose a degree program that will prepare you to sit for the National Certification Exam. If you change your mind and decide to pursue a career as a CPA, you’ll be prepared to do so. The differences between a CPA vs. an accountant also extend to their job responsibilities, although there is some overlap.

Understanding a Certified Public Accountant (CPA)

You may have even used the two terms interchangeably, and that’s understandable. But the truth is that there are many differences between these technical terms. To become a Certified Public Accountant (CPA), you Cpa vs accountant need to complete educational requirements, work in the accounting field, and pass the CPA Exam. On the contrary, accountants only need to earn a bachelor’s degree in accounting before starting their career.

• Earning CPA designation can grant opportunities in nearly every industry.
• Simply put, a CPA is likely to have greater accounting knowledge than those without the designation, and to be capable of performing duties that regular accountants cannot.
• Many in the profession are concerned about the growth rate of both accounting majors and CPAs.

To a potential employer it means high ethical standards as well as measurable experience, education, and skills. CPAs work mainly in public accounting, business and industry (corporate accounting), government, not-for-profit, and education. To learn more about the opportunities available in each of these areas by click here. The CPA designation isn’t required to work in corporate accounting or for private companies.

Which Accounting Professional Is Suitable For You?

You use an accountant’s services daily, recording financial transactions, reconciling statements and performing financial analysis. If you are a public corporation, only a CPA can prepare your audited financial statements. As an individual, you need a CPA for complicated tax returns and to help and represent you if the IRS is auditing you. An accountant is a financial professional who compiles and analyzes financial information.

The accountants have the authority to attest to financial statements. CPAs can prepare three types of financial statements that are audited, reviewed, and compiled. Whereas, an accountant will only be able to make a compiled financial statement.

After earning the CPA designation, you’re most likely more qualified to perform highly-specialized tasks that may be more meaningful or interesting. It’s an assurance of quality, showing that an accounting professional has met the profession’s highest standards of competence and achievement. The accountant is the one who does the day-to-day work within a business. In general, knowing how your business is performing, you need an accountant. Accounting is a system of preparing accounting records by collecting data, summarizing it properly, analyzing collated data, and finally, reporting in the financial statement. Do you need quick, streamlined tax filing support or broader expertise and planning?

This professional oversight is one of the key differences between accountants and CPAs. Most accountants hold a bachelor’s degree and can perform a wide range of services by undertaking some training and experience. Accountants work on the past (Financial Reporting, Auditing, Tax Computation), present (Internal control, Risk Management, Regulatory compliance), and future (Costing, Budgeting, Performance Management). A CPA provides valuable financial services that can extend beyond taxes or include more extensive tax planning. Whether you need monthly accounting support or seasonal support during your busiest seasons, a CPA can provide additional value to your tax strategy and finances as a whole. For smaller companies with straightforward taxes, using a tax preparer is a way to save money and get your tax returns completed on time.

CPAs with less than one year of experience earn $70,000 annually, while those with more than 20 years of experience earn $150,000. In fact, according to the Bureau of Labor Statistics, CPAs earn 10% to 25% more than non-certified accountants. However, salaries of CPAs and non-certified accountants vary by industry. They can be higher than average in industries experiencing a lot of growth, such as financial technology or software. In addition to possessing a license, CPAs are expected to adhere to a strict code of ethics and meet the high standards of their profession.

Other Jobs of Accountants and CPAs

However, a handful of states, like Alabama, allow a candidate to find and obtain the necessary work experience after completing the exam. In those cases, the candidate receives a certificate, but not a CPA license, until they’ve completed the required work experience. CPA candidates have 18 months to complete all 4 parts, and applicants must score at least 75% in each section of the CPA exam. The CPA certification exam generally is considered difficult, and less than 20% of test-takers pass all four sections the first time they take them. Individuals who have received a CPA designation are trained in generally accepted accounting principles and best practices (including online tools). Typically, they also charge higher fees than non-certified accountants.

• Accountants typically have a bachelor’s degree in accounting, finance, or a related field.
• Determining the type of tax preparer who best suits your specific needs depends on your unique situation.
• According to the Bureau of Labor Statistics (BLS), globalization, a growing economy, and a complex tax and regulatory environment are expected to continue to lead to strong demand for accountants and auditors.
• The Association of International Certified Public Accountants (AICPA) sets the standards and qualifications for the CPA professional designation.
• Not every individual is required to file a tax return, but most people who earn income must file taxes annually.

And they give you meaningful insights on keeping your finances in tip-top shape. They can also diagnose monetary problem areas and prescribe methods of improvement. See how Roger’s energy + UWorld’s revolutionary Qbank will help you pass the first time. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors.