Difference Between CPA & PA
Both Certified Public Accountant (CPA) and public accountant (PA) are professionals rendering accounting, auditing, consulting, and taxation services. The primary difference between CPA vs PA is that the former is a specialized and certified version of the latter. CPAs are well-trained and more experienced professionals than PAs. While PAs handle lower-level accounting tasks, CPAs manage high-level responsibilities. PAs with the necessary education and experience can proceed to gain certification to practice as CPA.
CPA vs PA Comparison Table
|Definition||State board licensed professional who has fulfilled the education, exam, and experience requirements.||Entry-level accounting expert providing accounting, auditing, or tax-related services.|
|Regulatory body||AICPA or NASBA||–|
|Professional Requirements||Uniform CPA Exam |
Bachelor’s Degree with 120-150 credit hours
Experience (1-3 years)
These may vary as per the chosen jurisdiction.
|Bachelor’s degree in accounting or related field|
|Job Responsibilities||Supervising budget and financial management Organizing and upgrading financial records Conducting periodic audits Preparing schedules, filling forms, and filing tax Returns Checking for financial loopholes Forecasting revenues and analyzing ledgersLedgersLedger in Accounting, also called the Second Book of Entry, is a book that summarizes all the journal entries in the form of debits & credits to use for future reference & create financial statements.||Preparing and verifying financial reports Auditing and reviewing accounts Planning finances Advisory services Handling tax matters Analyzing budgets|
|Exclusive Rights||Drafting audited financial statements Filing a report with the SEC Signing a client’s tax return as a paid preparer||No such exclusive rights.|
|Related Industries||Public, Corporate, Education, Non-Profit, Government, Self-employed, Consulting||Government, Finance and insurance, Corporate, Self-employed, Consulting, Non-profit organizations|
|Required Skills||Problem-solving, analytical and research skills, Leadership and communication skills, Technical know-how, Personal skills, Project management skills, High ethical standards, Client-focused, Keen business sense||Communication skills, Math Skills, Organizational skills, analytical skills, Upgraded Tax Knowledge, Innovative|
|Specialization (Not Mandatory)||Financial planning, Tax management, Investment planning, Audit Financial forensics, IT, Business valuation||Accounting, Auditing, Tax, Forensic accounting Advisory|
|Job Roles||CFO/CEO, Consultant, Corporate, controller, Internal auditor, Tax Manager, Financial analyst||Internal auditor, Management accountant, Forensic accountant, Financial advisors, Tax accountant|
|Average annual salary (approx.)||$ 76,161||$ 62,400|
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What is CPA?
A CPA is an accounting professional who has passed the Uniform 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. and fulfilled the state boards of accountancy’s necessary experience and educational requirements. The American Institute for Certified Public Accountants (AICPA) coordinates with the National Association of State Boards of Accountancy (NASBA) to conduct the CPA exam and issue the license.
CPA exam and licensing requirement
To gain this globally recognized credential, you must fulfill the four E’s:
- Education (bachelor’s degree with 120-150 credit hours)
- Exam (score at least a 75 in the each exam section)
- Experience (1-3 years)
- Ethics exam
These requirements may change as per your state board. Please note that you must sustain your CPA license through the Continuing Professional Education (CPE) every 1-3 years.
Roles and responsibilities
The CPA titleholders are strategic business advisors and decision-makers who help an organization attain its financial goals with ease. From consulting on taxation and accounting to investigating criminal fraud, their job profile encompasses a broad range of activities across industries.
This credential opens up countless career opportunities for you as a chief financial officerChief Financial OfficerThe full form of CFO is Chief Financial Executive, and he or she is a top level executive of the firm who is responsible for the firm's overall finance functions and has the authority to make financial decisions for the organization. , consultant, analysts, corporate controller, tax manager, internal auditorInternal AuditorInternal 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., etc. Their financial expertise and high ethical standards make them the ultimate choice for managing all financial aspects of a business.
During the last 20 years, CPAs have gained immense prominence in almost every business sector out there. Even during the COVID-19 pandemic, their demand in the industry increased as businesses relied on them for sound financial advice to ensure market sustenance.
Benefits of CPA license
CPA is a rewarding title. As per the AICPA’s 2017 salary survey of CPAs in the U.S., the national average annual CPA salary is $119,000, excluding bonus. Besides an impressive salary, the CPA license guarantees a stable career, global exposure, excellent career prospects, and an enviable professional stature.
Privileges of CPA vs PA
Please note that all CPAs are PAs, as CPAs usually start out as PAs. Hence, they are well-versed with all the job responsibilities of a PA. CPAs are PAs with an additional badge of certification. Certification ensures high professional standards in performing their job. The state boards of accountancy regulate their practice.
The certification also imparts them the expertise to go beyond the low-grade accounting tasks performed by a PA. Their intense training and exposure to various financial concepts confer them higher-order skills to analyze and interpret a company’s financial informationFinancial InformationFinancial Information refers to the summarized data of monetary transactions that is helpful to investors in understanding company’s profitability, their assets, and growth prospects. Financial Data about individuals like past Months Bank Statement, Tax return receipts helps banks to understand customer’s credit quality, repayment capacity etc..
CPAs enjoy certain privileges owing to their certification. They are entitled to sign all audited financial records of a publicly traded company, file a report with the U.S. Securities and Exchange Commission (SEC), and represent you before the Internal Revenue Service (IRS) in case of any tax dispute.
What is PA?
A PA is an entry-level accounting expert who manages the basic accountingBasic AccountingAccounting is the formal process through which a company attempts to present its financial information in a way that is both auditable and usable by the general public. , auditing, taxation, and consulting activities for a client on behalf of a public accounting firm. A public accounting firm is a firm that provides third-party accounting services to businesses and corporations.
You must have a bachelor’s degree in accounting or a related field to practice as a public accountant. Moreover, you may specialize in taxation, 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 advisory services. In addition to that, you need to possess good communication, computing, analytical, and organizational skills.
Role and responsibilities
PAs work on financial documents and tax returns that a client needs to report as per law. Their primary responsibility is to prepare, analyze, and audit financial statements to ensure accuracy and conformity to the Generally Accepted Accounting PrinciplesGenerally Accepted Accounting PrinciplesGenerally accepted accounting principles (GAAP) are the minimum standards and uniform guidelines for the accounting and reporting. These standards prohibit firms from engaging in unethical business activities and enable for a more accurate comparison of financial reports to investors. (GAAP).
They also offer advice to clients on important financial matters. They make the most of their knowledge to design the best possible financial strategies for their clients.
Since all companies need to maintain financial records and file returns, PAs have good job prospects. They usually start at junior positions in big public accounting firms. With experience, they proceed to acquire certification and take up senior roles. Moreover, they can also work as accountants or auditors in private or public companies.
As the name suggests, their allegiance lies with the public, enhancing the credibility of their interpretation of financial records. Their client profile varies from corporations, government agencies, and individuals to non-profit entities.
While comparing the salary of PAs to CPAs, it is evident that PAs get paid much less than CPAs. The U.S. Bureau of Labor Statistics (BLS) reports $73,560 as the median pay for accountants and auditors in the year 2020.
However, PAs can advance their career, both professionally and monetarily, by acquiring the CPA certification. Accounting firms usually hire public accountants and encourage them to get certified.
Please note that PAs can move from public accounting to government, corporate or management accounting. However, the reverse happens rarely. According to the BLS, accountants and auditors’ expected job growth rate is 4% (2019-2029).
CPA vs PA debate
CPAs almost always dominate the CPA vs PA debate. PAs rank way below CPAs in the workplace hierarchy. Though their roles are pretty similar, PAs, in the absence of certification, are not authorized to sign the audited statements of a public limited company, submit a report to the SEC, or deal with the IRS on tax issues. Due to their lack of experience, training and certification, they usually work as subordinates to CPAs.
As per human resource consulting firm Robert Half’s Accounting and Finance Salary Guide, the CPAs earn 5-15% higher remuneration than their non-certified counterparts. As mentioned earlier, employers consider CPA certification a symbol of credibility and expertise and pay them a higher salary.
CPA vs PA Infographics
This has been a guide to CPA vs PA. Here we discuss the difference between CPA and PA based on education, roles and responsibilities, career prospects, career opportunities etc. You may also have a look at the following articles –