CPA or Accountant for your Firm
How is a Certified Public Accountant Different from an Accountant?
This article illustrates the differences between a "Certified Public Accountant" (CPA) and an accountant.
When many people hear or read the term accountant, the acronym CPA immediately comes to mind. Although these two expressions are related and may even be identical in meaning in some cases, there are differences between them. These differences can be illustrated by discussing what an accountant is and what a “Certified Public Accountant” (CPA) is.
What is an Accountant?
Although job titles vary by employer, an accountant is essentially any person working in an accounting field with sufficient responsibilities to be considered an accountant, as opposed to someone that is entering data or in more of a clerk position. Common accountant duties may include journal entries, account reconciliations, and period closings.
Depending on the type of accounting job, the accountant’s duties may vary greatly from these activities. Also, the type of accounting position will cause the duties to vary greatly. For example, a management accountant’s job will be much different from a financial accountant’s job. Both of these will probably not resemble an accounting auditor’s job for the most part.
For many accounting positions, a person with a license is preferred. However, there are many accounting jobs that do not require a CPA or other accounting license.
What is a Certified Public Accountant?
One way to look at the CPA designation is that not all accountants are CPAs, but all CPAs are accountants. A person that is a CPA may have the job title of Accountant in many cases, whereas the term CPA is a license they have earned. The CPA license is very difficult to earn and anyone that has completed the testing, education, and experience required for it will nearly always have a great deal of knowledge about most aspects of public accounting.
There are also accounting functions that cannot be performed by non-certified accountants in many states. For example, certain auditing and attestation functions must be performed by a CPA in many states. These rules vary by state; some are more restrictive than others.
While many individuals and companies seek CPAs when they are looking for an accountant, a person with the training for this type of license is not necessarily the best person for every type of accounting job out there. For example, individuals with a Certified Management Accountant (CMA) license may be better qualified for internal accounting and finance positions than a CPA. Individuals with a Certified Internal Auditor (CIA) certification may be more qualified than individuals with a CPA or CMA license for internal auditing and Sarbanes Oxley (SOX) focused jobs.
Related Articles:
Management and Public Accounting: Comparing CPA and CMA Designations
Bookkeeper, Accountant, or CPA: What type of Financial Professional does your Small Business Need?
What is GAAP?: An Explanation of Generally Accepted Accounting Principles
How to Become a CMA: Requirements to Get Certified as a Management Accountant
Accounts Used in Accounting: How to Classify Accounts as Assets, Liabilities, or Equity
