Certified Public Accountant vs. Accountant
What is the difference between a Certified Public
Accountant (CPA) and an accountant?
Most people use the terms "accountant" and "CPA"
interchangeably, but there is a big difference. The CPA
credential carries enormous weight in business and financial
circles. CPAs are considered some of the business world's most
trusted advisers, according to a recent survey conducted by the
American Institute of CPAs. Specifically, when small business
owners were asked how often they rely on outside business
counsel, half said that they rely on their CPA "always" or
"often," ranking slightly behind one's spouse or family
member.
This trust is not surprising considering the strict
requirements to enter and stay in the profession. Achieving CPA
status takes intelligence, ethics, integrity, and lifelong
commitment. First, candidates must make it through 150 hours of
some of the toughest business courses at their college or
university. After graduation and a year of corporate experience
under the supervision of a CPA, they must pass a grueling test
of business, auditing, and general accounting skills.
The CPA exam was developed in the early 1900s to ensure the
competence of CPAs entering the field, much as the bar exam
evaluates lawyers and the medical boards test doctors. It
maintains that goal to this day, and it is continually revised
to meet the changing demands of the profession. For example,
candidates are now being tested on their writing skills. The
significant change was made because the marketplace is
demanding much more of CPAs. Almost every state in the country
has passed legislation that requires accounting graduates to
complete 150 hours of course credits before taking the
exam.
The CPA exam is not the only requirement to be a CPA. CPAs
are also required to follow a strict code of ethics and perform
within the high standards of the profession. Every year a CPA
must complete 40 hours of continuing professional education
(CPE) to keep up with the new rules and regulations in the
financial, accounting, and business world.
As the profession has evolved, so have the services CPAs
provide. CPAs are no longer just number crunchers and tax
preparers, but also business and financial strategists who help
chart the paths of individuals and businesses. Individuals turn
to their CPAs for tax and financial planning services,
investment advice, estate planning and more. Businesses are
tapping CPAs to not only manage finances and taxes, but also to
determine profitable new product lines, seek creative financing
opportunities, help diversify investments and provide a variety
of other consulting and business services. As technology
advances, globalization, new laws and regulations, and
marketplace competition continue to complicate financial and
business decisions, CPAs will be called upon to analyze
information, determine effective financial and business
strategies, and help individuals and businesses achieve
profitability.
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