Are you unsure about the difference between a CPA and an accountant? These professionals can perform almost the same duties. Find out what sets them apart by reading below.
In the city of New Orleans, a number of people choose to be accountants and CPAs. They work either independently or in accounting firms. If you are interested in hiring an accountant or a CPA and are wondering what the difference is between these two, read on for more information.
An accountant is defined as a practitioner of accountancy. Non-certified accountants are basically those who open their doors for business in accountancy. Basically, there are no educational requirements for one to call himself or herself an accountant. They can just simply prepare taxes with only a certain number of qualified hours of study partnered with continuing education hours yearly to be accountants in the industry.
The Certified Public Accountant
Certified Public Accountants or CPAs usually have taken up majors in accounting in college. These are the ones who have undergone exams in theory, practice, auditing and law and have worked for established accounting firms for at least two years and have acquired five hundred hours in total of auditing time in order to get their certification. They are also required to complete a specific number of hours of continuing education in order to maintain their license.
Basically, all CPAs are accountants but not all accountants are CPAs. All CPAs have licenses granted to them by the states and have qualified in four rigorous processes known as the “4 Es”. These are education (which currently lasts 150 hours), examination (uniform CPA exam), ethics and experience (made up of at least one year of supervised experience).
They are also required to swear to protect public interest and to keep up with the constant changes in the profession through mandatory continuing professional education upon receiving their license.
Choosing Between a CPA and Accountant
Now, some may be wondering how it is legal that some accountants need to undergo rigorous processes in order to practice accounting and some do not have to have formal training but can still practice accounting. This is connected with the concept of “free enterprise” which means it is the buyer’s responsibility and option to choose a qualified professional to employ.
However, there are legal restrictions in effect today that limit the range of services that non-certified accountants can perform. For example, accountants can do three types of financial statements namely audited, reviewed and compiled. Non-certified accountants are not allowed to prepare an audited financial statement. This task requires the expertise of a CPA who knows how to methodically examine and test the financial records of a certain company. Moreover, only a CPA can prepare a reviewed financial statement because information from this needs to be verified by a CPA. CPAs and non-certified accountants, as well as bookkeepers, can prepare the compiled financial statements.
The bottom line is that all professions look for individuals who provide quality work. Being a CPA does not necessarily make one a better accountant than a non-certified accountant. However, certification does give one a necessary edge over the other in terms of services he or she can render.