What Is the Difference Between a CPA and an Accountant?
Understand the fundamental differences between an accountant and a CPA. This guide clarifies their unique professional scopes and credentials.
The fields of accounting and finance encompass various roles that manage an organization’s financial health. While “accountant” and “Certified Public Accountant” (CPA) are often used interchangeably, they represent distinct professional designations with differing qualifications and scopes of practice. Understanding these differences is important for individuals seeking financial services or considering a career in accounting.
Understanding the Term “Accountant”
An accountant is a professional who specializes in maintaining and analyzing financial records for individuals or businesses. This title does not always require a specific license. Accountants commonly handle tasks such as bookkeeping, preparing financial statements, managing payroll, assisting with tax preparation, conducting financial analysis, and aiding in budgeting processes.
The typical educational background for an accountant is a bachelor’s degree in accounting or a related field, usually involving around 120 credit hours of study. This coursework provides foundational knowledge of accounting principles, financial reporting standards, and accounting information systems. There is no single, mandatory licensing body or uniform exam required across the United States to use the title “accountant.” Many accountants gain experience through various roles in corporate finance, government agencies, or as independent consultants.
Understanding the CPA Designation
A Certified Public Accountant (CPA) holds a professional license granted by individual state boards of accountancy, distinguishing them from other accounting professionals. Obtaining this designation involves meeting rigorous requirements in education, examination, and experience, often referred to as the “Three Es,” with some jurisdictions also including an ethics component.
To meet the education requirement, candidates typically need 150 semester hours of college coursework, which is more than the standard 120 hours for a bachelor’s degree. Many aspiring CPAs fulfill this by pursuing a master’s degree in accounting or additional undergraduate courses. The examination component is the Uniform CPA Examination, a demanding, multi-part test developed and graded by the American Institute of Certified Public Accountants (AICPA). Candidates must achieve a minimum score of 75 on each section.
Following the successful completion of the Uniform CPA Examination, candidates must also fulfill an experience requirement, typically involving 1 to 2 years of relevant work experience supervised by a licensed CPA. Many states also require passing an ethics exam. Maintaining the CPA license necessitates ongoing Continuing Professional Education (CPE), generally requiring 80 to 120 hours every two to three years. CPAs are legally authorized to provide specific services that unlicensed accountants cannot, such as auditing financial statements and issuing attestation reports for public companies. They can also represent clients before the Internal Revenue Service (IRS) during audits.
Primary Differentiators
The distinction between an accountant and a CPA primarily revolves around legal authority and the scope of practice. A CPA possesses a license that grants unique authority, particularly for attestation and audit services, such as signing off on audited financial statements for publicly traded companies. Unlicensed accountants, while performing general accounting tasks, cannot legally conduct these regulated services.
The qualifications and rigor required for each role also vary significantly. Accountants typically hold a bachelor’s degree, providing a foundation in accounting principles. In contrast, CPAs must complete 150 semester hours of education, pass the comprehensive Uniform CPA Examination, and fulfill specific work experience requirements.
The CPA license signifies a higher level of verified expertise, adherence to ethical standards, and accountability, leading to greater public trust and credibility, especially for complex financial matters. CPAs are regulated by state boards of accountancy and are bound by strict codes of professional conduct. The title “accountant” is not subject to the same formal regulatory oversight or mandatory ethical codes.