Accounting vs CPA

Updated on April 30, 2024
Article byWallstreetmojo Team
Reviewed byDheeraj Vaidya, CFA, FRM

Differences Between Accounting vs CPA

The key difference between Accounting vs CPA is that Accounting is the process of recording, maintaining as well as reporting the financial affairs of the company which shows the clear financial position of company, whereas, CPA is the designation which is given to those individuals who clears the CPA examination by the American Institute of Certified Public Accountants.

What is Accounting?

  • Accounting is basically the recording and reporting of financial transactions. Anyone who does accounting functions can call themselves an accountant, even without a professional degree in accounting, although usually, an accountant does have an accounting-related degree.
  • Often, accountants with no certification perform tasks such as bookkeeping, looking after general accounting matters, and taking care of some tax-related matters. However, all accountants with some training and experience can perform an extensive range of services.
Differences Between Accounting vs CPA

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What is CPA?

  • A Certified Public Accountant (CPA) is an accountant who has met state licensing requirements. Requirements for CPA vary by state; they include minimum education (usually a bachelor’s degree in accounting) and experience requirements, plus passing the CPA exam.
  • The Uniform CPA examination is administered by the American Institute of CPAs (AICPA), which has four sections: Regulation, Financial Accounting, and reporting Business Environment and Auditing. The CPA qualification is considered by many organizations to represent the commitment of an accountant in meeting high standards.
  • While all CPAs are accountants, not all accountants are CPAs.

Let us discuss the differences between Accounting vs. CPA in detail –

Accounting vs. CPA Infographics

Here we provide you with the top 9 differences between Accounting vs. CPA

Accounting vs CPA Infographics

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Accounting vs. CPA Key Differences

Here are the critical differences between Accounting vs. CPA –

#1 – Licensing

  • CPAs have to pass rigorous testing and strict requirements for licensing in the state in which they intend to practice. CPA candidates must complete required hours of institute coursework, including specific hours in accounting, auditing, taxation, and business core classes.
  • After graduation and a year of experience under the supervision of a CPA, candidates must take and pass the comprehensive test of tax, auditing, and general accounting skills.
  • After getting a license, CPAs must take continuing education classes throughout their career in order to remain up-to-date with the information on issues and changes in the accounting world.

#2 – Fiduciary Responsibility

  • CPAs are considered some of the business world’s most trusted advisers, according to a survey conducted by the AICPA.
  • Many businesses that are required to have a financial statement audit will find that only a CPA is capable of performing these services and issue the necessary reports.
  • In addition, CPAs are considered the ones with a legal duty and power to act on behalf of and in the best interest of their clients. Non-CPA accountants are not considered to be fiduciaries to their clients.

#3 – Taxes and Regulations

  • Accountants without a CPA certification may prepare a proper tax return, but a CPA provides distinct advantages to clients that non-CPAs cannot offer.
  • Many CPAs are more knowledgeable in tax codes because of the rigorous CPA licensing examination and continuing education requirements. Another critical factor is that CPAs are eligible to represent clients before the IRS, while a non-CPA accountant is not.

#4 – State Requirements and Codes of Ethics

  • CPAs are also expected to follow a strict code of ethics and meet the high standards of the profession, as having the license is not the only requirement to be a CPA.

#5 – Cost and Expenses

  • The cost and expenses in pursuing CPA are higher when compared to pursuing accountancy courses/certifications.

Accounting vs. CPA Head to Head Differences

Now, let’s look at the head to head differences between Accounting and CPA

Basis of Comparison between Accountants vs. CPAAccountingCPA
MeaningAccounting is a processor work of keeping financial accounts. An accountant is a person whose job is to keep financial accounts.A Certified Public Accountant (CPA) is an accountant who has met state licensing requirements.
AttestationThe accountant cannot provide attestation services.You are required to have a CPA license to provide attestation services.
LicensingNo License is required to be an accountant.The license is required to be a CPA.
Standing before IRSThe accountant has no standing with the IRS (Internal Revenue Services)CPAs can represent a taxpayer before the IRS (Internal Revenue Services)
Signing Tax ReturnsAccountants cannot sign tax returns or represent clients during tax Audits before IRS.CPAs can sign tax returns and also represent clients during tax audits before the IRS.
Governing BodyNo specific Governing Body.The governing body for CPAs is the American Institute of Certified Public Accountants.
CostLow cost compared to CPAs.Comparatively Higher Cost.
SalaryThe salary of an accountant is comparatively lower than CPAs.The salary of CPAs is higher when compared to an accountant.
ConclusionAll accountants are not CPAs.All CPAs are accountants.

Accounting vs. CPA – Final Thoughts

  • When it comes to which is better between the two, I can say both are the best at their places, depending on your priorities, time, and cost involved. If you opt for CPA, you will go through with international laws, principles, and standards. The passing CPA exam is comparatively tougher than any accountancy certification.
  • Accounting is basically the process of recording and reporting of the business and financial transactions. Anyone who does that function can call themselves an accountant.
  • Obtaining a CPA license is a bit more difficult and will take more time. You can see that it is definitely worth it.
  • Accountants mainly prepare three types of financial statements:- audited, reviewed, and compiled. Non-CPA can only prepare a compiled financial statement. Only a CPA can prepare an audited financial statement or a reviewed financial statement. Small businesses generally may not require an audited or reviewed financial statement, but public companies are required to publish audited statements. When individuals or businesses make this decision of choosing between a CPA and an accountant, this is one of the important considerations they take into account.

This article is a guide to the top differences between Accounting vs CPA. We discuss the difference between Accounting and CPA and a comparison table. You may also have a look at the following articles: –

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