Is It Important That Your Accountant Is A CPA?

A Certified Public Accountant (CPA) is an accountant who has met state-licensing requirements to earn their designation. This title is equal to the chartered accountant. In the U.S., it’s a license to provide accounting services to the public, hence the term.

Long story short, the CPA is the next level to being an accountant while a regular accountant is a step below the CPA in terms of skills, responsibilities, and experience.

CPAs versus Non-CPA Accountants

CPAs are tax code experts while accountants are at best legally allowed to prepare tax returns. Although they may uphold certain ethical standards, accountants without a CPA license are not regarded as fiduciaries to their clients.

  • Fiduciary Obligation: A person or entity with the legal capacity to act on behalf of others is known as a fiduciary. These could consist of board members, financial advisors, and bankers. It is widely accepted that the CPA has the legal obligation and power to act in his client’s best interests.
  • The CPA is an Accounting Specialist: An accountant with a CPA license is an accountant with better credentials. It’s like the difference between a general practitioner doctor versus a specialist doctor, like a surgeon or an oncologist. A CPA is a tax code specialist
  • Tax Returns and Audit Representation: CPAs can sign tax returns and represent clients to deal with an IRS audit while non-CPA or regular accountants couldn’t. Then again, even though accountants may not possess the same level of expertise in tax codes as a CPA, they are legally permitted to prepare tax returns.
  • CPAs Come with a Code of Ethics and Conduct: The following are the five categories that make up the Code of Ethics of a CPA: Accountability, the interest of the public, honesty or integrity, independence and objectivity, and due diligence.
  • Non-CPA Proficiency: A diverse skillset is essential for accountants to thrive in any type of corporate setting. They must make sure they are equipped to handle financial data management, advice and analysis, reporting compliance, and financial report preparation after earning a bachelor’s degree.
  • AICPA is the CPA Governing Body: Regular accountants aren’t subject to any particular code of ethics because they are not governed by any particular body. However, because they are members of the American Institute of Certified Public Accountants (AICPA), the typical CPA is bound by stringent ethical guidelines and professional standards.

The Essentials of CPAs over Accountants

Various skills are required to succeed as an accountant. Even more so as a CPA. A certified public accountant is better educated and has more experience in the accounting field since they’re accounting specialists.

After getting a bachelor’s degree, the non-CPA accountant needs to also learn financial report preparation, reporting compliance, financial advice and analysis, and financial data management to boot. However, unlike non-CPA accountants, CPAs are able to sign tax returns and represent clients before the IRS in the event of an audit.

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