Not many businesses today can thrive without the services of an accountant or a C.P.A. While there are areas where both perform similar functions, there are dissimilarities between them that you ought to be aware of if you own a business and are considering which to choose. Read on to discover the top five (5) essential differences that distinguish between the “Accountant vs CPA” and critical points to keep in mind!
Who Is an Accountant?
An accountant is a professional who analyzes, organizes, and maintains the financial records of a company or an individual and then summarizes and presents the data as a financial statement at the end of a stipulated period. Usually, the accountant is involved with the routine management of the company. It is well worth noting that the records are generally, but not always, financial records.
Who Is a Certified Public Accountant (C.P.A)?
A C.P.A is an accountant who has passed specific examinations and met other state statutory requirements in the United States to be certified by that state. The most significant difference between the C.P.A and the accountant is that the C.P.A is licensed. So, if you're running an organization and considering which to choose between an accountant and a C.P.A, below are five (5) differences that contrast them and will help inform your decision:
1. Attestation Services
Only a C.P.A can perform an attestation service. An attestation service is an independent opinion on published financial and other business information of a business, public agency, or other organization. If your financial statements need auditing, then you need to employ the services of a certified public accountant.
2. Taxes
Because of their training and background, C.P.As are better informed about tax laws than an average accountant. Hence, they can offer more profound insights concerning taxes. Additionally, C.P.As can stand in for their clients before the Internal Revenue Service (I.R.S), whereas non-C.P.A accountants cannot.
3. Governing Body
The accountant is not under any governing body; hence, he is not bound by any particular code of ethics. In contrast, the American Institute of certified public accountants governs the conduct of the C.P.A. Consequently, the certified public accountant must abide by strict rules of conduct.
4. Education and Permits
One of the most notable distinctions between the C.P.A and the accountant is that while the state licenses the former, the state does not license the latter. Furthermore, all through their career, C.P.As must keep themselves updated. They do this by taking courses and improving their education to keep up with new trends in their field.
5. Cost of Hire
Because of the intrinsic advantages of the C.P.A and the more advanced services they can render, it costs more money to employ a C.P.A than an accountant.
Conclusion
Having contrasted the accountant and the C.P.A, the question is: which is a better fit for your business? To answer this, you'd have to understand the most pressing needs within your organization.
Are your taxes complex? Are you just getting started and need an idea of the overall view? Do you need to do auditing? Are you a public corporation? If your answer is yes to most of these questions, you might want to go for a C.P.A. On the other hand, if you only need to manage your account routinely, do financial statement analysis, and create budgets, then all you need might be an accountant.
