You may be confused about the differences in a Certified Public Accountant and an accountant. Although they have similar qualifications and experiences, there are some important differences you need click site before you make your decision about who you want to hire.
What is the difference?
It is easy to explain the differences between these professionals by saying that all CPAs, or companies, are accountants. All accountants cannot be called CPAs. Confused? It is not easy to distinguish these two professionals. CPA stands for a certified finance professional who has passed all state licensing exams. This exam does not qualify an accountant to be licensed by the state.
Both are involved tax- and finance-related work. They all follow the Financial Accounting Standards Board’s rules and regulations like the Generally Accredited Accounting Principles (GAAP). Both have likely earned college degrees. Although they may not be able to get degrees in Accounting and Finance, they will most likely have one of them.
A person who performs financial work can also be called an “accuntant”. CPA cannot be used unless the person has passed all state licensing exams.
What is it that makes CPAs special?
This exam is the main reason that these professionals are so valuable. A long-term exam, licensing requires you to pass multiple areas of finance and taxes. A professional must continue to learn and be up-to date on tax laws in order keep their license current. Bookkeepers and financial professionals are exempt from this obligation.
Why is it a good idea?
CPAs are often more efficient than accountants in many situations. Three areas are of particular importance:
Taxes. In most cases, they will be more familiar with tax law than finance professionals. They are also recognized by the IRS as certified preparers. This is important because certified preparers can be more effective in representing clients to the IRS, if needed.
Financial Analysis. Basic financial work can be done by anybody, including entering data and preparing reports. However, only licensed experts can complete an in-depth analysis of your financial situation. They can provide advice on financial and tax issues that others are not able to.