Despite the fact that accounting has been around for hundreds of years, many people are still uncertain about the different areas of accounting and wonder whether CPAs and accountants are the same thing. Since CPA stands for Certified Public Accountant, it stands to reason that people would think CPAs and accountants are the one and the same. Accounting is a popular and very broad field with a wide variety of career opportunities. Those who are considering the accounting field can pursue advanced education in accounting, which may offer not only a higher level of income but also additional levels of employment positions.
What Is An Accountant?
Accountants are people who have been trained in accounting principles and practices. Accountants use these practices to examine and organize the financial matters of both individuals and businesses so that a third-party agency can get the most accurate and clear picture of the financial status of the business or individual.
Accounting also helps employees within the company determine the financial health of the company as well as determining what changes need to be implemented for improved growth and financial stability. Individuals and businesses use accounting practices to acquire financing, pay necessary taxes, and make business decisions. If earning an accounting degree online sounds interesting to you, read the 10 Best Online Accounting Schools for additional information.
Common Roles For Accountants
Accountants may work in a wide variety of positions, including such jobs as claims adjustors for insurance, loan administrators for banking, underwriters, stockbrokers, or investment analysts. These tasks all require an understanding of basic financial principles and how financial information is used in analyzing business needs. They may work for insurance companies, the government, or may work independently.
Almost every industry has a need for personnel that can understand and organize the finances of the business to ensure success in its planning and investment. Regardless of how small or large a business may be, they are still going to be in need of an accountant, which bodes well for both CPAs and accountants.
Duties of an Accountant
You may have heard a neighbor or family say that take their income tax returns to their accountant at tax time. While this is an important role for accountants, it is by far not their only duty. While an accountant’s duties may vary by the business, some of their duties may include:
• Organizing, preparing, and examining financial records
• Inspecting all financial records are accuracy
• Identifying specific areas of risk for individuals and businesses
• Offering solutions to correct the problem
• Ensuring data and financial risks are evaluated
• Computing taxes and ensuring all taxes are paid on time
• Assessing the company’s financials operation so the organization runs as efficiently as possible
• Making recommendations on best accounting practices to management
• Suggesting best ways for revenue enhancement, cost reduction, and profit improvement
• Using technology to help the business improve productivity
• Providing management with oral and written reports on their findings
Education Requirements for CPAs and Accountants
There are a few differences between CPAs and accountants, and the educational requirements are one of those differences. As a rule, individuals wishing to become accountants must have at least a bachelor’s degree in accounting, business, or a related field. This usually requires completion of about 120 credits and takes four years to complete.
Although some employers may prefer to hire applicants with a master’s degree, a bachelor’s degree is usually sufficient for employment as an accountant. In rare cases, individuals with an associate degree in accounting may be hired for junior accountant positions with the opportunity to work their way up to regular accountant positions. Accounting bachelor’s degree programs can be found on campus and online.
Many of these programs offer students the option of studying specialized areas of accounting, such as internal auditing, accounting, tax accounting, and forensic accounting, among others. Another degree option for aspiring accountants is a bachelor’s degree in business with a concentration or major in accounting. Many graduates of accounting bachelor’s degree programs gain the necessary work experience through internships.
Becoming a CPA requires additional education and experience. In addition to having a bachelor’s degree in accounting, the candidate must complete at least 150 semester hours of graduate courses. Some colleges do offer a five-year program that allows the student to earn a bachelor’s and master’s degree, which satisfies the 150-hour requirement. Once the student has completed the educational requirements, he or she must pass the state certification exam.
Certification for Accountants
Many people don’t realize that all certified accountants are accountants, but not all accountants are certified, according to the American Institute of CPAs. An accountant who works with the stock market or plans to file reports with the Securities and Exchange Commission (SEC) must be a licensed Certified Public Accountant (CPA) through their state’s Board of Accountancy.
Certification is a process in which accountants’ skills are recognized and approved by state agencies. Getting certified generally involves taking an examination that tests a person’s knowledge of accounting practices and principles. The candidate can choose to earn certification in general accounting or for specific areas of accounting. These areas might include the following.
• Financial Management
• Forensic Accounting
• Internal Auditing
• Environmental Accounting
• Business Advising
• Personal Financial Planning
• Tax Law Advisor
• Auditing Information Technology
• Fraud Examination
• Tax Accountant
• International Tax Manager
• Sports Accounting
• Tax Analyst
Why Is Certification Needed?
Certification is something that’s advised for several reasons. It’s a way for an accountant to demonstrate commitment and expertise in the accounting field. Certification also allows the account to be consistent and fully educated in the application of accepted accounting principles regardless of the industry, business, or financial situation.
State requirements vary for CPAs and accountants in regards to what training or experience they must have to be able to be called an accountant. An individual who has fulfilled the education, training, and experience to be called a CPA has also obtained the knowledge and skills needed to handle complex financial issues.
Certification also puts trained accountants in a better position to earn higher wages and obtain higher-level positions. According to a report by Accounting Institute for Success, about 50 percent of all accountants choose to become CPAs as of 2016.
Requirements To Become Certified
Each state has its own requirements for certification in accountancy. These requirements generally include educational credentials, a certain length of practical experience, and passage of the Uniform Certified Public Accountant Examination, which is authorized by the American Institute of Certified Public Accountants (AICPA). In fact, the Uniform CPA exam is required in all the states.
The examination is rigorous, and as many as half of the participants do not pass it on the first try, according to Accounting Coach. Applicants are recommended to study for the exam and not attempt to take it until they feel ready. The exam consists of four parts. Accountants are not required to take all four parts at the same time, but the candidate is required to complete the final exam without a year and a half of when they took the first part.
In addition, accountants are required to participate in continuing education courses to retain their certification status. Continuing education ensures that certified public accountants stay up to date on changing requirements for effective practice.
Many accountants begin careers in their field without certification and later decide to take the certification examination to advance their prospects for future employment. The accrued work experience fills some of the requirements for certification and increases their understanding of the real-life application of accounting principles.
If you’re wondering whether CPAs and accountants are the same thing, keep in mind that in addition to the CPA examination, the greater number of opportunities and higher levels of pay available to CPAs generally distinguish the two. There are various credentials and certifications an accountant can earn.
• Accredited in Business Valuation
• Chartered Global Management Accountant
• Certified Financial Forensics
• Personal Financial Specialist
• Certified Government Financial Manager
• Certified Internal Auditor
• Certified Information Technology Professional
• Certified Management Accountant
• Certified Financial Services Auditor
• Certified Information Systems Auditor
For most of these certifications, the individual must have at least a bachelor’s degree, meet experience requirements and pass an examination. According to the AICPA, the CPA exam consists of these four parts.
• Auditing and Attestation
• Business Environment and Concepts
• Financial Accounting and Reporting
Wages for CPAs and Accountants
In addition to the differences between CPAs and accountants listed above, wage potential is another difference. In some cases, it can be a sizeable difference. The U.S. Bureau of Labor Statistics (BLS) reports that accountants earned an average annual wage of $81,660 with wages ranging from $45,220 to $128,680 or more as of May 2020.
Generally, the more education and training an accountant will have, the higher the wage potential is going to be. Applicants who are CPAs or have complete advanced accounting education typically see the best wages. According to PayScale, accountants earned an average annual wage of $51,872 as of September 2021, while CPAs earned an average annual wage of $69,152.
Geographic location also plays a huge part in wage potential for CPAs and accountants. The BLS wage report indicates that the highest average wages for accountants and auditors were in the District of Columbia, where these professionals earned an average annual wage of $110,140. The lowest average annual wage of $60,000 was earned in Mississippi.
Accounting has been around for many years and continues to offer great career opportunities to those who pursue this career. It continues to be a popular and demanding field not just because of the good wages, and good career opportunities, but also because it is a field that will always be needed in many industries and businesses.
The BLS reports that accountants, in general, can expect a seven percent job growth between 2020 and 2030. If you’re looking for a career that can be as demanding as it is challenging while offering a good wage, why not check into becoming an accountant or CPA.
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