by Do you have questions about the differences between a Certified Public Accountant, or CPA (certified public accountant), and an accountants accelerator professional? They may seem to have the same qualifications and experiences, but there are differences that you should be aware of before making a decision about which one to hire.
What’s the Difference Between These Two?
One way to explain this difference is that while all CPAs are accountants and not all accountants CPAs. Confused? It can be confusing to know the difference between these two professionals. CPA refers to a financial professional who has passed a state licensing examination. The state does not license accountants who have not passed the exam.
Both do tax-related finance work. They follow the Financial Accounting Standards Board (FASB), as well as the Generally Accepted Accounting Pracies (GAAP) rules. Both sets of professionals probably have college degrees.
The term “accountant” refers more to a person who performs finances work according to those FASB regulations. CPA is only available to individuals who have passed the state licensing exam.
What makes a CPA special?
The state licensing exam is what makes these professionals so valuable. Licensing involves a lengthy exam that covers many aspects of finance and tax. Professionals must stay current with tax laws and comply with continuing education requirements each year in order to keep their license. This is not mandatory for bookkeepers and financial professionals.
When should you hire one
CPAs may be more beneficial than accountants in some cases. There are three specific areas in which a CPA might be more effective than an accountant.
Taxes. They will usually be more familiar with tax law than finance professionals. The IRS recognizes them as certified preparedrs. This is important, as certified preparers have greater capabilities to represent clients to IRS, if required.
Financial Analysis. While anyone can do routine financial work like entering records and creating reports, it is best to have a licensed expert perform an analysis of your financial situation. They can also provide advice about tax and financial matters that others cannot.