Accounting is a broad field that encompasses various professionals, including bookkeepers, accountants, and Certified Public Accountants. While all of them deal with financial data and tax-related matters, only CPAs have the distinct qualifications and responsibilities that set them apart.
What is a certified public accountant then, and what makes them special in the world of accounting? In this blog, we will explore the abilities that make a CPA different from other accountants, and talk about how they’re accredited, their expertise, legal authority, and professional responsibilities.
Certification and Licensing
Certification and licensing set certified public accountants apart from regular accountants. To become a CPA, they have to pass the Uniform CPA Exam on Auditing & Attestation (AUD), Business Environment & Concepts (BEC), Financial Accounting & Reporting (FAR), and Regulation (REG).
They must meet specific state requirements and need to finish 150 hours of college coursework. On top of that, CPAs are required to gain work experience under a licensed CPA. These requirements ensure that CPAs are generally more skilled than those without certification.
Expanded Expertise
Although certified public accountants and regular accountants are skilled in bookkeeping, tax preparation, and financial reporting, CPAs receive more training and ongoing education. CPAs need to remain updated on the changing financial rules, tax laws, and industry standards.
They must regularly finish Continuing Professional Education (CPE) courses to keep their license. This nonstop education allows them to be professionals in Forensic Accounting, Financial Planning, International Accounting, and Business Consulting.
Legal Authority and Representation
The legal authority granted to certified public accountants is their most important distinction. CPAs are authorized by the IRS to represent clients in audits, collections, and appeals before the agency. Standard bookkeepers and accountants do not have this privilege.
Certified public accountant services include being able to take the stand for public companies, sign auditing reports, and give their professional opinions on financial statements. These are crucial for companies that need to be represented in regulatory bodies like the Securities and Exchange Commission.
Ethical Standards and Responsibilities
The American Institute of Certified Public Accountants (AICPA) has established a stringent code of ethics and professional conduct that CPAs must follow. These ethical standards ensure that they uphold independence and objectivity while acting in the best interests of their clients. Non-CPAs aren’t bound by that code.
For instance, CPAs are required to give a truthful evaluation of a company's financial status during audits. To stop fraud and ensure that their reports can be trusted by stakeholders, investors, and regulators, this degree of professionalism is essential.
Career Opportunities
CPAs often have more career options and earn better than their regular accountant counterparts due to their added education, license, and experience. Many certified public accountants oversee the finances of major corporations as executives, like chief financial officers. Businesses favor employing them because they add credibility to the image of the company. Some CPAs start their firms related to their expertise.
It’s More Than Just Math
Long story short, all CPAs are accountants, but not all accountants are CPAs. So, what is a certified public accountant? They’re the ones who have been undergoing a continuing learning process to remain accredited with expanding expertise, legal authority, and ethical responsibilities that businesses seek. If you need the services of such a professional, contact Nicholas J. Coco, CPA, at 201-955-3100.
