All accountants are not CPAs, but all CPAs are accountants. Sound confusing? We are here to explain the difference so you can find the right person and right solution for your financial requirements.
Accountants are trained at a university or college and receive a four year degree. many states require further education including business courses. In order to become a CPA, an accountant will need to pass the CPA exam. Once passed, a CPA can be licensed to practice in the state in which he or she is located.
A CPA is required for privately held businesses, large corporations and all kinds of not-for-profit and for-profit concerns. CPAs make sure that the records of the companies they work for have financial integrity so that others can rely on the figures to make decisions. A CPA will analyze accounts, develop a strategy for tax planning and risk reduction and provide counseling such as on investments in new ventures. The SEC requires that a CPA perform regular audits on the books of companies that are publicly traded or that seek investments from individuals and firms.
Understandably, a high level of ethics are required in order to become a CPA. Each state has an ethics exam requirement in order to get and renew a CPA license. When you deal with a CPA, you are not just getting the services of a bookkeeper or accountant, you are getting a highly trained specialist that may become one of the most valuable members of your management team.
A small, closely held business may only require the services of an accountant to satisfy their ongoing needs for accurate financial records. Larger companies, and definitely those that are in the public domain, will require the services of a CPA – either an individual or one of the many large CPA firms that are located across the country.