Accountants and Certified Public Accountants (CPA) are both distinct and important for business functioning. You would have reached a point in your business where you would hire an accountant or a CPA to handle the finance. But if you are confused about choosing between an accountant and a CPA, then you should probably know the key roles and the difference between them. This will help you in choosing the one that is better for the finance of your business. Below we are heading towards knowing the difference between an accountant and a CPA.
Accountant
Accountants handle the accounting of a business or a firm. The accounting is prepared by collecting data, then analyzing the collected data, and finally reporting the data in the financial statement. The accountant performs the day-to-day accounting of the business. Most accountants hold a bachelor’s degree with some training and experience to perform a wide range of accounting work for a business. Accountants at Edmonton accounting firms normally handle work like financial reporting, auditing, internal control, risk assessment, costing budgeting, and performance management.
CPA
CPAs are accountants too. They have to obtain a license from the state to perform their accounting duties. CPAs are trusted financial accountants who help an individual, organizations, and businesses plan their finance and reach their financial goals. CPAs can conduct all the tasks that are done by accountants, but an accountant cannot conduct all the tasks of a CPA. The three main components for getting a CPA license are Education, Examination, and Experience.
License
License is only required for CPAs, and accountants don’t need a license. A bachelor’s degree is enough for practicing any accounting work. This is one of the major and significant differences between accountants and CPAs. CPAs would need to take some rigorous tests and strict requirements for practicing their work. There are required institute coursework hours that a person needs to complete with specific hours in accounting, auditing, taxation, and business core classes. After accomplishing graduation and completing one year of experience under the supervision of a CPA, there will be another comprehensive test of tax, auditing, and general accounting skills that the candidate needs to pass. Even after receiving the license, the CPA will have to continue taking education classes to stay updated with the new information and changes in accounting.
Fiduciary Responsibility
CPAs are certified and hence they are considered to be the most trusted advisors for finance. Many businesses need to conduct a financial statement audit. CPAs can only perform this audit, and only they can issue the required reports. CPAs are the only person who holds the legal duty and power on behalf of their clients. CPAs are in the best interest of the clients. Whereas, the accountants are not considered to behold the fiduciary responsibilities to their clients. Fiduciary responsibilities are only given to CPAs.
Taxes and Regulations
Many accountants can prepare a proper tax return without a CPA certification. But a certified CPA can provide various benefits to the clients that non-CPA accountants cannot provide. CPAs are more knowledgeable because they have given rigorous examinations and are pursuing education continuously. So they are well equipped with the current situations. Another benefit that you get along the CPA is that they are eligible for representing the clients before the CRA. Whereas, a non-CPA accountant is not qualified to do so.
Codes of Ethics
Getting a license is not the only requirement to become a CPA. There is some code of ethics that a CPA needs to follow, and they also have to maintain the standard of the profession. CPAs have to make financial decisions while being in line with the code of ethics. The responsibilities lie in the hands of the CPA to conduct every activity while staying within the code of ethics. The CPA has to take sensitive and moral judgments in every activity. CPAs would have to keep learning through continuous education, and they will have to level up to high ethics throughout their careers. Abiding by the code of ethics and continuous education is not a must for non-CPA accountants.
Functions
There are primary functions that accountants and CPAs have to conduct. The primary functions that a CPA has to conduct are carrying out assurance services or public accounting. CPAs attest to financial statements in the assurance service category. The accountants have the authority to attest to financial statements. CPAs can prepare three types of financial statements that are audited, reviewed, and compiled. Whereas, an accountant will only be able to make a compiled financial statement. The key roles of an accountant are to plan the future for clients, audit accounts, and maintain the accounts books. Those CPAs who are working as a consultant can’t operate as an auditor. CPAs are business advisors and they do the taxes and financial planning. Whereas, the accountant will be able to plan these things systematically.
Costs and Expenses
When compared, the costs incurred for pursuing CPA are higher than the accountants. To become an accountant, you just need a bachelor’s degree, but becoming a CPA consists of education, required time of relevant working experience, and the Common Final Examinations. The cost of the studies in CPA will eventually increase as you consider a higher level of certification courses or like the CPA Professional Education Program. The more studies a person acquires, the more they would know about the workings of accounting and they could be more trustable.
Both the profession of accountants and the CPAs are best in their own place. It is now according to your cost and priority you should choose the best option for yourself. Both of them have their pros and cons, choose according to which fits best with your priorities. To choose the best accounting services in Edmonton, you should call ATS Accounting & Tax Edmonton or contact us online.
