As you explore your options for a career in accounting, you might wonder what distinguishes a CPA from another accounting professional. While both roles focus on the work of financial reporting and analysis, CPAs have slightly different job duties, more rigorous education and experience requirements and a lot of career advantages.
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Job Responsibilities for Accountants and CPAs
The first thing you need to know about the difference between accountants and CPAs is that all CPAs have some sort of accounting background. CPA stands for Certified Public Accountant . Many of the job duties a CPA may perform can also be done by public accountants without a certification or license. Both types of professionals may work in the accounting specialties of taxation, financial accounting, forensic accounting and auditing.
The most important responsibility that only a CPA can fill is the filing reports with the Securities and Exchange Commission (SEC), the United States Bureau of Labor Statistics (BLS) reported. Public companies, about 3,600 of which exist across the U.S., must file annual and quarterly reports with the SEC. For many licensed CPAs, the certification makes possible plenty of other job duties beyond simply having the legal authority to submit reports to the SEC. Among the seven percent of accountants and auditors who are self-employed, having the credential adds credibility to their reputation and services as an independent contractor. A CPA can also help you reach advanced career roles, such as partner or senior manager in established accounting firms.
The expanded job duties for CPAs don’t take away from the responsibilities for non-CPA accountants. Accountants without a CPA license still compile financial statements, and they enjoy a low unemployment rate and a stable job outlook even during harsh economic times.
Requirements for CPAs vs. Accountants
Generally, you don’t need any special license or certification to practice as an accountant or to use the job title of accountant. Most employers seek for candidates with a bachelor’s degree in accounting or a similar field, such as business administration. You may need certain credentials to perform certain tasks, such as the Internal Revenue Service’s Enrolled Agent qualification for preparing tax returns.
The qualifications needed to work as a CPA, on the other hand, are much more rigorous. You need to meet education and experience requirements set by your state’s Board of Accountancy. Usually, these requirements include a bachelor’s degree, at least one to two years of public accounting work experience and 150 semester hours of study (one year more than what is required to earn a bachelor’s degree). Once you have fulfilled all of the criteria, you can take the four-part Uniform CPA Examination, a challenging professional exam which only half of test takers pass.
Once you attain your CPA license, you need to meet Continuing Professional Education (CPE) requirements throughout your career to keep your license in good standing.
Perks of Being a CPA
If attaining a CPA license is so challenging, why would anyone choose to pursue the credential? There are many benefits to attaining certification. From junior roles to senior roles and even senior management roles, CPAs earn 10 to 15 percent more money than non-CPA accountants, the Association of International Certified Professional Accountants (AICPA) reported. Over a lifetime of working in the field of accounting, that extra income can add up to one million dollars more than accountants without a CPA license make, according to the Pennsylvania Institute of Certified Public Accountants .
Having a CPA license is a requirement for many of the most senior and best paying roles in accounting. You may need this credential to become partner of an accounting firm or rise to a senior manager role. If you prefer self-employment to working in an established public accounting firm, having a CPA license can help you attract and impress clients. Finally, the CPA credential offers more career prestige than you would have as an accountant without a license. In some circles, certification as a CPA is equivalent to credentials such as MD, JD or Ph.D. in terms of its influence on your professional reputation.
There are more than 664,000 accountants with active CPA licenses in the United States, according to the National Association of State Boards of Accountancy .
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