The accounting industry tends to separate workers into different categories. Titles such as certified public accountant (CPA) and accountant classify workers in different groups. The former has a professional license, and the latter does not. This is the major difference between the two worker groups. Other differences also exist between these workers.
Both CPAs and accountants typically have college degrees, such as a four-year baccalaureate degree. Accountants might need a formal degree to obtain certain positions in the accounting industry, such as a staff accountant, internal auditor or senior accountant. The CPA, however, often has a master's degree. Many states require a fifth year of formal education prior to awarding individuals a CPA certificate. Master's degrees often reach further into accounting theory than bachelor's degrees.
A CPA must meet specific work experience requirements to earn his state's professional certificate. States have different work requirements for CPAs. In many cases, however, CPA candidates must work directly under a currently licensed CPA. This helps candidates receive accurate direction for accounting tasks. Accountants have no requirements in terms of job experience. They can take any position open to accountants that requires a degree. Public accounting positions are difficult to obtain without a license.
CPAs must undergo rigorous testing, ethics programs and continuing education to earn and retain their licenses. Accountants do not face any of these requirements. The CPA exam requires the completion of four individual parts issued by state accounting associations. Some states also require CPA candidates to complete an ethics exam. Continuing professional education ensures a CPA stays abreast of new issues. Accountants can complete an ethics program and continuing education but typically face no requirements to do so.
Companies that hire CPAs generally incur higher wage expenses. These individuals have a high degree of technical knowledge, making them more valuable to companies. Companies can hire one or two CPAs to guide their accounting offices. Accountants are often cheaper and work well to complete common accounting tasks. General ledger work is often a common task for accountants. CPAs can also work on taxes and audits, among more complex accounting issues.
- "Fundamental Financial Accounting Concepts"; Thomas et al.; 2011
- Maryland Association of CPAs: CPAs vs. accountants: An Important Distinction
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