People these days often mix a CPA or certified public accountant with a public accountant, for which they think of them to be the same people. That is not true; a CPA and a public accountant are not the same individuals. A CPA is an individual who has met the requirements of a specific state for licensing and has passed the CPA exams. On the other hand, a public accountant simple needs a bachelor’s degree that will allow them to provide services on tax planning and tax advice. Therefore, CPAs have the power to write an audited financial statement like an income statement or a balance sheet.
CPA vs. Public Accountant: The Difference
Given below are several points that will allow you to have a clear image of a certified public accountant and a public accountant. They are
A professional CPA is required to fulfill strict requirements and pass through rigorous testing from the particular state where they wish to practice. A CPA candidate is required to complete 150 hours of a college course work, which includes specific hours of business core, auditing, and upper-level accounting courses. Once he or she completes graduation and a year of supervision under a CPA, the individual can pass a comprehensive test for tax auditing, general accounting skills, and business. When they are fully licensed, all the new CPAs must opt for the continuing education courses throughout their entire career. The continuing education classes will be their ultimate source through which they will stay updated with the changes and receive information on issues in the world of accounting.
2. Curator Responsibility:
There are many businesses in the industry, which requires a financial review or audit needs the help of a professional CPA. They will be responsible for getting the job done and provide a report on an issue if required. Additionally, many prefer the CPAs to be fiduciaries with a legal duty. This perspective is because they have the power to act on behalf of the clients. Plus, they need to work, keeping in mind the customer’s best interests. Public accountants who are not in the position to recognized as a CPA cannot be a fiduciary for their respective clients.
3. Regulations and Taxes:
Public accountants have the power to prepare a proper tax return for business owners. However, a professional CPA will provide distinctive benefits to its clients, which a non-CPA accountant offers. Due to the continuing education requirements, and rigorous CPA licensing examinations enables a CPA to carry much more knowledge on tax codes. Also, CPAs have the power to represent their clients in front of the IRS if it needs support for auditing. However, don’t expect this type of advantage from the hands of a non-CPA accountant.
4. The Code of Ethics and State Requirements:
To become a professional CPA license is not everything or the only requirement. All professional CPAs are required to follow the code of ethics and meet all the high standards of this particular profession. This aspect is because it is imperative, and different states have different requirements for a CPA, which he needs to accomplish. For a non-CPA accountant, they need not go this far as they do not follow this area of practice.
Understanding the Responsibilities of a Public Accountant and a CPA
Apart from having numerous differences among each other, both the CPA and the public accountant have to meet different jobs, roles, and responsibilities. However, the primary needs of both of these professions are to evaluate financial information in a detailed manner and have a tight grip on the highest economic ethics. Given below are the responsibilities that are fulfilled by both of the heavyweights of the business world.
Public accountants are known to complete regular accounting work, which includes payroll, billing, accounts payable, and general ledger entries and oversight. They also manage the positions that fall under the low-level of the finance and accounting department of big business. Given below are some of the job responsibilities they meet. They are
- Completes the revenue recognition reports.
- Perform collection on delinquent accounts and provide account reconciliations.
- Implement corrective actions and identify the trends in revenue and expenditures.
- Takes the responsibility to offer invoice reviews.
- Reviews the terms and contracts, which includes granting application that stands appropriate in the eyes of the industry.
The majority of the public accountants work for 40-hours per week and sometimes provide overtime during busy seasons when reports and taxes are due.
CPA or Certified Public Accountant:
The CPA sits on the upper-level than the public accountant and carries higher chances to become partners or owners of an accounting firm. They take a certificate that acts as an official statement, which granted to them through their respective states. However, they earn the examination have passed the CPA examination and, in return, receives the license to provide their services for CPA. They need to renew their certification every two years so that they can provide their solution and services to their clients legally. Because of the additional examination and education of CPAs, businesses and individuals consider their expertise at a much higher level. Given below are some of the responsibilities a CPA will meet for you. They are:
- Sign reports for publicly traded companies.
- Prepares, annually, quarterly, and monthly financial reports for all businesses.
- They guide contractual language and financial dealings.
- They help clients by presenting themselves during commercial litigations.
The average working hour of a CPA is a 40-hours per week, where they perform their duty in an office environment the entire year. They work additional hours on busy tax reporting months.
With the information provided in this blog, you have a clear understanding between a public accountant and a CPA. It will allow you to hire the right person according to your business needs.