Is a CPA the Same as an Accountant?

What Is an Accountant?

An accountant is a person who is hired by an individual, a company, or even a government agency to manage and analyze finances. They take care of things like:

• bookkeeping
• payroll
• auditing

Accounting professionals can have areas of specialty such as:

• forensic accounting
• tax accounting
• financial analysis

Their skills help businesses run financial operations and plan for the future with budgeting.

What's the Difference Between a CPA and an Accountant?

Although their roles seem similar, a CPA and an accountant have key differences when it comes to their:

• education
• licensing
• job qualifications

Education

Becoming an accountant involves earning a bachelor's degree in accounting or another field related to accounting such as finance. Completing a degree program equips accountants with a comprehensive understanding of finance principles. It prepares graduates for roles related to:

• taxation
• auditing
• business law

The path to becoming a CPA has more education requirements. Aside from earning a bachelor's degree, certified public accountants need to study for and pass the CPA exam to become licensed, though there may be additional requirements depending on the state. Earning a master's degree can open up more opportunities to advance in an accounting career.

Responsibilities

CPAs and accountants are both capable of analyzing financial data and filing tax returns. While they perform some of the same roles, a licensed CPA has more responsibilities than a non-CPA accountant.

What Does an Accountant Do?

Accountants cover many different tasks related to finances. Some of the tasks include:

• financial consults
• manage budgets
• process payroll

They prepare financial statements and perform audits to ensure financial records are accurate. Non-CPA accounting professionals work in places like government agencies and public accounting firms organizing and recording financial transactions.

What Does a CPA Do?

A CPA does many of the same tasks as an accountant. They use their expertise to help small businesses and even large corporations with financial decision-making and planning. Aside from basic accounting responsibilities, certified public accountants can ensure that audited financial statements comply with industry standards of regulation and assist with complex financial matters.

A CPA uses their work experience, finance knowledge, and professional licensure to stand out in their accounting career as a valuable individual. CPAs are responsible for following the American Institute of Certified Public Accountants' code of ethics and are expected to maintain the strict professional standards that position CPAs as qualified experts.

Licensure and Certification

Accountants can earn various licenses and certifications, the most common one being a CPA license. Licensing requirements vary depending on location, but most state boards require a bachelor's degree in accountancy or 150 hours of coursework in a closely related field to become a licensed CPA.

The American Institute of Certified Public Accountants offers the Uniform CPA Examination that tests your understanding of important accounting principles.

The four sections include:

• Auditing and Attestation (AUD)
• Financial Accounting and Reporting (FAR)
• Regulation (REG)
• Business Environment and Concepts (BEC)

Careers

CPAs and accountants can hold similar roles but with various degrees of responsibility.

Tax Preparers

Both accountants and CPAs can work as tax preparers. Accountants have the skills to prepare tax returns and maximize deductions. As a tax preparer, a CPA is qualified to help individuals and organizations with complicated finances and legally represent them in the case of a tax audit.

Budget Analyst

An accountant working as a budget analyst examines an organization's financial records and statements to develop an effective budget. They use their analytical skills to improve how financial resources are used. CPAs in a budget analyst role can use their extensive knowledge and accounting skills to analyze finances at a higher level.

Financial Advisor

An accountant without a CPA license is qualified to provide financial planning advice as a financial advisor, much like a certified public accountant. The difference is a CPA has additional expertise that allows them to offer expert advice about:

• tax planning
• auditing
• maintaining compliance with financial reporting regulations

Auditor

Auditors examine financial records to ensure they are accurate. They play a key role in financial integrity. Accountants who aren't CPA certified can work as internal auditors and review finances within an organization. With CPA licensure, accountants can perform in-house internal audits and work independently to evaluate public companies with external audits.

Skills

In the accounting field, analyzing financial documents and records to find problems and make improvements involves the use of specialized skills that are gained through degree programs and work experience.

CPA and non-CPA accountant skills include:

• through an understanding of accounting and finance principles
• operating accounting software
• attention to detail
• budgeting
• data analysis
• understanding of mathematics
• effective communication

FAQs About CPAs vs. Accountants

If you are deciding between becoming a CPA or an accountant, these questions can help you make an informed decision.

What Specific Tasks Can a CPA Perform That a Regular Accountant Cannot?

With a CPA credential, accountants can represent clients legally in front of the IRS if their finances are audited. They are also able to file reports with the Securities and Exchange Commission.

Do CPAs Make More Than Accountants?

CPA salaries are generally higher than accountant salaries which have an average of $80,000. Certified public accountants have qualifications that allow them to access higher-paying roles and charge more for their services when working with a company or individually. Financial managers hold a more high-level role and make around $156,000 as a median salary. Average salary statistics are noted from the U.S. Bureau of Labor Statistics for 2023.

How Do You Become a Certified Public Accountant?

You can become a certified public accountant by completing a bachelor's degree and earning work experience in the accounting field. After meeting the state board's licensing requirements, you can take the CPA exam and begin working as a certified public accountant.