Difference Between a CPA and Lawyer
Both Certified Public Accountants (CPA) and lawyers are licensed professionals in their respective fields of accounting and law. In the context of CPA vs lawyer, the primary difference between a CPA and a lawyer is that while CPAs are trusted financial consultants, lawyers are skilled professionals who offer legal counselling.
Attorneys or lawyers represent you before the law and counsel you on your legal rights and duties. On the other hand, CPAs offer accounting, auditing, management advisory, and consulting services. Both CPAs and lawyers must hold their respective licenses to practice as industry professionals.
What is a CPA?
A CPA is an accounting expert who has passed the Uniform CPA examination and now holds a state board-issued license to practice. American Institute for Certified Public Accountants (AICPA) conducts the CPA examCPA ExamThe CPA Exam assesses accounting professionals not just on their financial knowledge, but also on their ability to review and seek out key abilities. in coordination with the National Association of State Boards of Accountancy (NASBA).
The accounting boards of any of the 55-U.S. jurisdictions are authorized to issue the CPA license. It is important to note that state agencies govern both CPAs and lawyers.
Being a CPA is like being a part of an elite group of accounting professionals. CPAs enjoy higher earning potential, better career prospects, a good reputation, and a competitive edge over others in the profession. However, this credential demands a lot of dedication, hard work, and time. As per NASBA, a CPA earns 10-15% more than a non-certified accountant.
From government agencies, non-profit organizationsNon-profit OrganizationsA not-for-profit organization refers to a legal entity that isn't created to generate profits or revenue for its owners but aims at social, educational, religious or public welfare and service. Such an organization is tax-exempted and run through donations or any other income it makes., private firms, to start-ups, CPAs are in huge demand globally. CPAs are adept at internal auditingInternal AuditingInternal audit refers to the inspection conducted to assess and enhance the company's risk management efficacy, evaluate the different internal controls, and ensure that the company adheres to all the regulations. It helps the management and board of directors to identify and rectify the loopholes before the external audit., financial statementsFinancial StatementsFinancial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels., forensic accountingForensic AccountingForensic accounting employs a mix of accounting, auditing, and investigative acumen by recording accounting documents, preparing reports, and performing financial analysis for use in legal proceedings. Thus, it provides an accounting analysis from a litigation perspective., and consulting services.
Clients highly value the role of CPAs as financial advisors. With their extensive knowledge about their client’s business, CPAs are ideal for educating them about the available financial options for growing their business.
The CPA exam is considered one of the most challenging professional exams. The education, work experience, and licensing requirements for CPAs vary as per your state board.
Aspiring CPAs need to read through AICPA’s CPA Exam Blueprints as it specifies the required skills and exam content. You can also go through the latest scoring details and analyze the pass rates. If you are a non-U.S. resident CPA aspirant, go through the authorized websites of NASBA or AICPA to know the whole procedure.
What is a Lawyer?
A lawyer is a law-degree holding, state-bar exam qualified expert authorized to practice law. The duties and titles of lawyers differ as per varying law fields such as criminal, tax, family, corporate, intellectual property, etc.
It is a coveted profession due to its high remuneration, greater career advancement opportunities, and respect in society. Lawyers are duty-bound to utilize their extensive knowledge and training in interpreting the laws and safeguarding their client’s interests.
Whether you are getting divorced, planning to write a will, or having a conflict of interest with your business partner, a lawyer could help you out. They are your ultimate savior as they can advise you regarding your legal rights and obligations and represent you before the court while offering complete confidentiality. This secrecy under the client-lawyer privilege often gives lawyers an upper hand in a CPA vs lawyer debate.
Their work environment is not limited to a corporate office or a government agency. They can work in law firms or even take up a private practice. To be a good lawyer, one must have excellent interpersonal, research, and problem-solving skills. Also, one must be ready to dedicate a lot of time to this profession.
A lawyer’s primary work involves conducting legal research and preparing legal documents like appeals, lawsuits, wills, etc. Representing clients and soliciting advice are integral components in a lawyer’s life. A lawyer usually takes the help of legal assistants, legal secretaries, and paralegals for paperwork.
Bureau of Labor Statistics (BLS) suggests a 4% job growth rate in the next decade in the lawyer profession. As per BLS and American Bar Association (ABA), all aspiring lawyers must do the following:
- Complete four years of undergraduate study
- Pass the Law School Admission Test (LSAT)
- Finish three years of American Bar Association (ABA)-recognized law school
- Clear the state bar exam
- Take a test on professional ethics
- Pass a character and fitness assessment
- Take a legal oath
- Get the law license
With a law license of a particular state, a lawyer can practice law in that state only. Usually, to practice in more than one state, a lawyer has to clear the state bar exam of each state.
Most state bars prescribe lawyers to complete Continuing Legal Education (CLE).
CPA vs Lawyer Infographics
CPA vs Lawyer Comparative Table
|Definition||Accounting professionals who pass the CPA exam as well as fulfill the state board education, experience, and licensing requirements.||Legal professionals who have passed the state bar exam. Most states require lawyers who hold a Juris Doctor (J.D.) degree. Lawyers often specialize in a particular legal area.|
|Focus area||Financial matters||Legal matters|
|Primary duty||Ensure accuracy of financial statements||Protect the client’s interest while complying with the law|
|Other duties||Preparing and analyzing financial records |
Evaluating business transactionsBusiness TransactionsA business transaction is the exchange of goods or services for cash with third parties (such as customers, vendors, etc.). The goods involved have monetary and tangible economic value, which may be recorded and presented in the company's financial statements.
Preparing and filing tax returns
|Researching and analyzing legal issues|
Preparing and filing legal documents
Representing clients before the law
Assessing facts and developing a strategy for case presentation
Negotiating settlements of civil conflicts
|Annual Salary (approx.)||$60,000 -$160,000||$1,26,930|
|Professional Requirements||150 hours of education (varies as per the state board)1-2 years of work experience (depending on the state board)|
Passing the Uniform CPA examination
|Four years of undergraduate study|
Three years of law school
Pass the state bar examination
Pass the character and fitness assessment
Receive the license
|Professional association or regulatory body||American Institute for Certified Public Accountants (AICPA)||American Bar Association (ABA)|
|Benefits of hiring||Organized and accurate financial records|
Negligible tax filing issues
Effective solutions to business problems
Better credit rating
IRS audit representation
Optimum tax deductions
Better business decisions
|Strong representation in the court|
Plea bargains and negotiate settlements
Insightful legal suggestions
Assist damage mitigation
|Career paths||Financial advisors|
Arbitrators, conciliators, or mediators
Immigration/intellectual property/personal Injury/family lawyer
|Work schedule||Usually 35-40 hours per week (over-time during tax season)||Usually more than 40 hours per week|
This has been a guide to CPA vs Lawyer. Here we discuss the top 10 differences between CPA and Lawyer along with infographics and a comparison table. You may also have a look at the following articles –