CPA vs. Accountant: Understanding the Core Differences

When navigating the world of business finance, understanding the distinct roles of an accountant and a certified public accountant (CPA) can make a significant difference. While the titles may seem interchangeable, the qualifications, duties, and professional capabilities of each differ considerably. We offer a comprehensive overview of what separates an accountant from a CPA, how their responsibilities vary, and how these differences affect your financial decisions.

Defining the Roles

What Is an Accountant?

An accountant is a professional who specializes in maintaining and analyzing financial records for individuals or businesses. Their responsibilities often include preparing financial statements, analyzing cash flow, managing budgets, and offering guidance on financial decision-making. Most accountants hold a bachelor’s degree in accounting or a related field and may work in corporate finance, government agencies, or as independent consultants.

Accountants can handle a wide variety of financial tasks, including processing payroll, managing tax filings, tracking expenses, and ensuring compliance with financial regulations. They are an essential part of many businesses’ internal financial operations, often serving as the backbone of accurate financial reporting.

What Is a CPA?

A certified public accountant, or CPA, is an accountant who has met additional state-specific requirements in education, examination, and experience. The CPA designation is regulated by each state’s Board of Accountancy and requires passing the Uniform CPA Examination, which is a rigorous four-part exam covering auditing, financial reporting, regulation, and business concepts.

In addition to passing this exam, CPA candidates must usually complete 150 credit hours of education and have one to two years of work experience under the supervision of a licensed CPA. They are also required to engage in continuing professional education annually, including training in ethics.

CPAs are licensed professionals, meaning they are legally authorized to perform duties that regular accountants are not. These include auditing financial statements, representing clients before the Internal Revenue Service (IRS), and filing reports with the Securities and Exchange Commission (SEC).

Educational Requirements

Academic Path to Becoming an Accountant

To become an accountant, individuals typically pursue a bachelor’s degree in accounting, finance, business administration, or economics. This academic background provides a strong foundation in financial principles, tax law, business strategy, and regulatory compliance. Students often gain practical experience through internships or entry-level positions, which help build their skills in real-world financial operations.

Some accountants choose to continue their education by earning a master’s degree in accounting or business administration to increase their job prospects and earning potential. However, a postgraduate degree is not required to work as an accountant.

CPA Educational Path and Certification

The path to becoming a CPA is more demanding. In addition to holding a bachelor’s degree, aspiring CPAs must complete 150 credit hours of college coursework, which often includes a graduate degree. These courses typically cover advanced accounting topics, business law, auditing, taxation, and ethics.

Once the educational requirement is fulfilled, candidates must pass the Uniform CPA Examination. The four sections of the exam are:

• Auditing and Attestation
• Financial Accounting and Reporting
• Regulation
• Business Environment and Concepts

Candidates must pass all four sections within an 18-month period, achieving a minimum score of 75 percent on each. Additionally, most states require candidates to pass an ethics exam with a high score to ensure they understand the standards expected of a licensed CPA.

Licensing and Continuing Education

How Accountants Are Credentialed

While accountants must meet basic educational standards, they are not required to obtain a license to practice. This lack of a licensing requirement means that accountants can start their careers soon after graduation. However, the absence of a regulatory body also means they are not bound to a formal code of ethics or ongoing education requirements.

CPA Licensing and Maintenance

CPAs must obtain licensure from their state’s Board of Accountancy. This process includes verifying educational credentials, passing the CPA exam, demonstrating relevant work experience, and completing the ethics requirement. Even after becoming licensed, CPAs must complete continuing professional education each year to retain their credentials. Most states require 40 hours of continuing education annually, though some have biannual or alternative requirements.

These continuing education requirements ensure that CPAs stay current with changes in accounting standards, tax laws, and regulatory practices. This commitment to ongoing professional development is one of the key differentiators between CPAs and general accountants.

Job Responsibilities

Duties of an Accountant

The role of an accountant can vary widely depending on the size and industry of the business. Common responsibilities include:

• Preparing financial statements
• Managing accounts payable and receivable
• Tracking cash flow and expenses
• Reconciling bank statements
• Processing payroll
• Preparing and filing taxes
• Assisting with budgeting and financial forecasting
• Advising on financial efficiency and compliance

Accountants often work closely with business owners or financial managers to ensure accurate reporting and informed decision-making. They may also play a role in setting up internal controls to prevent fraud and ensure the integrity of financial information.

Duties of a CPA

CPAs are qualified to perform all the tasks listed above and more. Their advanced certification allows them to engage in more complex financial and regulatory functions. Common responsibilities of a CPA include:

• Conducting and overseeing financial audits
• Preparing and reviewing audited financial statements
• Representing clients during IRS audits or disputes
• Filing reports with the SEC
• Offering forensic accounting services
• Providing business valuation and advisory services
• Assisting with mergers, acquisitions, and financial restructuring
• Consulting on compensation, benefits, and financial risk

Due to their fiduciary duty, CPAs are legally obligated to act in the best interest of their clients. This adds an additional layer of trust and credibility, especially in high-stakes financial environments.

Fiduciary Duty and Ethical Standards

Legal and Ethical Obligations

One of the most important distinctions between accountants and CPAs lies in their ethical obligations. CPAs are held to a strict code of ethics set by the American Institute of Certified Public Accountants (AICPA). This code includes principles related to:

• Integrity
• Public interest
• Responsibility
• Objectivity and independence
• Due care

These principles are not merely suggestions—they are enforceable standards. CPAs found in violation can face disciplinary action, including fines, license suspension, or revocation.

Accountants, by contrast, are not required to adhere to a formal code of ethics unless they voluntarily join a professional organization that imposes such standards. As a result, they may not be held legally responsible for breaches of professional conduct in the same way CPAs are.

Fiduciary Responsibility

Fiduciary responsibility means acting in the best interest of a client or stakeholder. CPAs have a legal obligation to uphold this responsibility, making them uniquely qualified to serve as financial advisors, auditors, or consultants for companies and individuals. Accountants are not legally bound to fiduciary duties, which can be a critical consideration in high-risk or highly regulated financial environments.

Tax Preparation and IRS Representation

Role in Tax Filing

Both accountants and CPAs can prepare and file taxes if they obtain a Preparer Tax Identification Number (PTIN) from the IRS. Accountants are capable of handling most individual and business tax filings, especially for straightforward returns and smaller businesses.

CPAs, however, bring additional expertise to complex tax scenarios. Their training enables them to devise strategic tax planning approaches, minimize liabilities, and navigate intricate tax codes. This makes them a valuable asset for businesses dealing with multiple revenue streams, international operations, or high-net-worth individuals.

IRS Representation

Another critical difference is that CPAs have the legal authority to represent clients before the IRS during audits, disputes, or appeals. This ability is especially beneficial for businesses facing scrutiny or needing guidance through complex tax negotiations. Accountants who are not CPAs do not have this authority, limiting the level of support they can provide in such situations.

Salary Expectations and Career Outlook

Earning Potential

Given the advanced training and licensing requirements, CPAs typically earn more than general accountants. On average:

• Accountants earn approximately $61,480 annually
• CPAs earn around $92,795 annually
• Partners at CPA firms can earn over $166,000 per year

These figures can vary depending on industry, geographic location, experience level, and the size of the employing organization.

Career Opportunities

Accountants may find positions in various roles, including:

• Budget analysts
• Internal auditors
• Financial planners
• Management accountants
• Risk analysts
• Tax accountants

CPAs, on the other hand, often hold specialized or leadership roles such as:

• Forensic accountants
• SEC reporting specialists
• Financial controllers
• Public company auditors
• Mergers and acquisitions consultants

The Bureau of Labor Statistics projects a 4% job growth for both accountants and CPAs from 2022 to 2032, indicating a stable and promising career path for both professions.

Which Professional Is Right for You?

Choosing between an accountant and a CPA depends largely on your business size, complexity, and specific financial needs. For everyday financial tasks such as payroll, invoicing, and basic tax preparation, an accountant can be a practical and cost-effective choice.

If your financial requirements include complex tax planning, regulatory compliance, financial audits, or representation before the IRS, hiring a CPA is likely the more suitable option. Their advanced training and legal standing provide peace of mind and a higher level of financial stewardship.

Education and Licensing Pathways

When evaluating the career paths of accountants and Certified Public Accountants (CPAs), the educational and licensing routes differ significantly. These differences help determine the roles they can fill, the services they can legally offer, and their overall professional authority.

Accountant Education Path

Most accountants begin with a bachelor’s degree in accounting, finance, or business. This degree provides foundational knowledge in financial principles, tax codes, business operations, and ethical accounting practices. Many programs include coursework in auditing, managerial accounting, cost analysis, and accounting information systems.

Some accountants pursue additional certifications such as Enrolled Agent (EA) or Certified Management Accountant (CMA) to enhance their credibility and specialize in certain areas. These certifications can open doors to more advanced roles without requiring CPA licensure. However, they still don’t offer the same legal recognition or authority as a CPA credential.

CPA Educational Requirements

To qualify for the CPA exam, candidates must complete 150 semester hours of college coursework—30 hours more than the typical 120 hours required for a bachelor’s degree. This extra coursework is often obtained through a master’s degree in accounting, business administration, or taxation. In some states, candidates can meet the 150-hour requirement through undergraduate and graduate course combinations.

State boards typically require candidates to complete core subjects in auditing, taxation, and financial accounting to be eligible for CPA licensure. Once the educational requirements are fulfilled, aspiring CPAs must pass a rigorous four-part CPA exam.

The CPA Examination and Ethics Test

The CPA exam is a national, uniform exam administered by the American Institute of Certified Public Accountants (AICPA). It consists of four sections:

• Auditing and Attestation (AUD)
• Financial Accounting and Reporting (FAR)
• Regulation (REG)
• Business Environment and Concepts (BEC)

Each section tests a different facet of accounting knowledge and application. The exam is known for its difficulty, with a pass rate of less than 50 percent per section. Most states require all four sections to be passed within an 18-month rolling window.

In addition to the CPA exam, most states mandate an ethics exam. This exam focuses on professional conduct, ethical responsibilities, and public interest principles. Candidates usually complete this open-book, take-home test after passing the CPA exam. To earn a license, they must also fulfill supervised work experience under a licensed CPA, typically one to two years depending on state regulations.

Continuing Education and License Maintenance

One of the distinguishing factors between CPAs and general accountants is the requirement for ongoing education. CPAs must complete continuing professional education (CPE) annually or biennially, depending on state mandates. On average, CPAs are required to complete 40 hours of CPE each year, including a certain number of hours in ethics training.

This commitment to continuous learning ensures CPAs remain up to date on evolving regulations, tax laws, accounting standards, and industry developments. It also reinforces the ethical and fiduciary standards they are held to. In contrast, accountants without CPA licensure are not typically subject to mandatory continuing education. While many choose to further their knowledge voluntarily, it is not required for continued practice.

Fiduciary Duties and Legal Responsibilities

A core difference between CPAs and accountants is the concept of fiduciary responsibility. Fiduciaries are legally obligated to act in the best interests of their clients. CPAs hold this legal duty, while general accountants do not.

CPAs are legally recognized to represent clients before the Internal Revenue Service (IRS) during audits or disputes. They can also sign off on audited financial statements required for regulatory compliance, such as filings with the Securities and Exchange Commission (SEC). These privileges are granted due to the CPA’s licensure and adherence to ethical standards.

On the other hand, although accountants can prepare financial statements and tax returns, they cannot legally represent clients before the IRS unless they obtain additional certification, such as becoming an Enrolled Agent. They also cannot conduct audits that meet regulatory standards or provide assurance services.

Scope of Services

The range of services offered by accountants and CPAs can overlap in areas like bookkeeping, tax preparation, and financial reporting. However, CPAs can take on more complex tasks and serve clients in broader capacities.

Services Offered by Accountants:

• Bookkeeping and recording transactions
• Preparing financial statements and general ledgers
• Filing standard business and personal tax returns
• Assisting with budget preparation
• Performing internal audits (without legal attestation)
• Offering financial planning and advice

These functions are essential for businesses and individuals looking for basic accounting support. Many accountants also work in niche areas such as nonprofit accounting, small business advising, or payroll services.

Services Offered by CPAs:

• Performing audits and reviews of financial statements
• Filing SEC-compliant reports
• Representing clients during IRS audits or tax disputes
• Designing and overseeing internal control systems
• Advising on complex tax strategies and corporate restructuring
• Conducting forensic accounting investigations
• Performing business valuations and due diligence for mergers

CPAs are also frequently involved in management consulting roles, helping businesses develop strategies for growth, profitability, and compliance. These advisory roles carry significant responsibility, particularly for publicly traded or large private companies.

Industries and Work Environments

Accountants and CPAs may work in similar environments, such as corporate finance departments, public accounting firms, government agencies, and nonprofit organizations. However, their roles and career trajectories within these environments often differ.

Common Workplaces for Accountants:

• Small to mid-sized businesses
• Local accounting firms
• Educational institutions
• Healthcare organizations
• Retail and service industries

Accountants in these settings may work as financial analysts, cost accountants, payroll specialists, or internal auditors. They often handle operational accounting tasks and provide insights into day-to-day financial decisions.

Common Workplaces for CPAs:

• National and international public accounting firms
• Fortune 500 companies
• Investment firms and banks
• Regulatory agencies (e.g., IRS, SEC)
• Legal and litigation support firms

CPAs in these environments may rise to senior leadership roles such as chief financial officer (CFO), controller, or audit partner. Their responsibilities include overseeing financial compliance, conducting statutory audits, and engaging in strategic planning.

Ethical Standards and Public Trust

CPAs are bound by a code of professional ethics established by the AICPA. These ethical standards include principles such as integrity, objectivity, due care, and commitment to public interest. CPAs must act independently and avoid conflicts of interest in all engagements.

This ethical framework builds public trust in the CPA profession, especially when CPAs provide audit or assurance services. Investors, regulators, and stakeholders rely on CPAs to offer unbiased and accurate financial reporting.

Accountants, unless certified by a body such as the AICPA or a similar professional organization, are not held to a legally binding ethical code. While many adhere to professional conduct voluntarily, they are not subject to disciplinary action from a licensing board unless they hold a credential.

Representation Before Tax Authorities

Representation rights are another critical distinction. While any paid tax preparer must obtain a Preparer Tax Identification Number (PTIN), only certain professionals can represent clients before the IRS.

CPAs, attorneys, and Enrolled Agents have unlimited representation rights. This means they can:

• Represent clients in all matters before the IRS
• Negotiate on behalf of clients in audits or appeals
• Sign agreements or settlements

Non-credentialed accountants with only a PTIN cannot perform these functions. Their role in client representation is strictly limited, which can be a drawback for businesses facing complex tax issues or audits.

Global Recognition and CPA Equivalents

The CPA designation is exclusive to the United States and its jurisdictions. However, other countries have equivalent certifications, such as:

• Chartered Professional Accountant (CPA) in Canada
• Chartered Accountant (CA) in the United Kingdom and other Commonwealth countries
• Certified Practising Accountant (CPA) in Australia

These international designations often have mutual recognition agreements with the U.S. CPA credential. For instance, U.S. CPAs may be eligible for accelerated certification in Canada or Australia under specific conditions. Still, it’s important to note that the U.S. CPA license itself does not grant automatic practice rights in other countries.

Technology Integration and Modern Accounting

Both CPAs and accountants must stay abreast of technological developments in the financial industry. The growing use of automation, cloud-based systems, and artificial intelligence is transforming how accounting tasks are performed.

Accountants often use technology to manage bookkeeping, generate reports, and maintain records. CPAs, meanwhile, may use advanced analytics tools, risk assessment platforms, and audit software for more complex evaluations.

As the industry continues to evolve, both roles require tech proficiency. However, CPAs are more likely to be engaged in technology-related decision-making at the organizational level, such as evaluating software systems or ensuring cybersecurity compliance in financial operations.

Making the Right Choice for Your Business

Understanding the distinction between an accountant and a certified public accountant is essential, but applying this knowledge to your specific business needs is where the real value lies. We’ll explore how to assess your business’s financial requirements and determine whether a CPA or an accountant is the better fit. We’ll also address key considerations such as risk management, industry complexity, long-term goals, and how to vet professionals to ensure you make an informed decision.

Evaluating Your Business Needs

Before deciding between an accountant or a CPA, it’s important to conduct a thorough assessment of your business’s financial requirements. Start by reviewing the current state of your finances, your growth strategy, and your exposure to complex regulatory or tax-related issues.

Small businesses or sole proprietorships often need help with routine bookkeeping, basic tax preparation, and financial recordkeeping. In these cases, a general accountant can provide excellent service. However, if your operations are expanding, or you anticipate needing services like auditing, financial forecasting, or representation before tax authorities, a CPA is likely the better choice.

Risk Management and Legal Exposure

Risk is an ever-present factor in business operations. Legal and financial risks can arise from tax misfilings, failure to comply with regulatory standards, or internal control deficiencies. CPAs are uniquely positioned to help mitigate these risks. Due to their extensive training, licensure, and adherence to a strict code of ethics, CPAs can provide services with a higher level of accountability and legal protection.

For example, if your company is at risk of a tax audit or is preparing for acquisition or merger, working with a CPA who understands complex tax codes and can produce defensible audit-ready records is a valuable safeguard. In contrast, an accountant without certification might not have the qualifications or legal authority to navigate these scenarios.

Industry Complexity

Different industries present different accounting challenges. Businesses in healthcare, manufacturing, non-profit, or finance may face more complex regulatory environments. These industries often require specialized knowledge of reporting standards, compliance requirements, and internal controls.

A CPA brings more in-depth understanding of accounting standards like GAAP (Generally Accepted Accounting Principles) or IFRS (International Financial Reporting Standards) and can offer valuable insights in industries with higher stakes and stricter regulations. Accountants, while proficient in many tasks, may not possess the necessary breadth of knowledge to address industry-specific challenges without further specialization.

Long-Term Financial Strategy

Hiring decisions around accounting professionals should also align with your business’s future plans. If you foresee significant scaling, exploring capital investment, or taking your company public, a CPA’s services will likely become essential. CPAs can help structure financial systems that support long-term success and transparency.

They also bring a strategic mindset when advising on major financial decisions, such as restructuring debt, navigating investor relations, or preparing for regulatory scrutiny. Accountants can assist in building foundational processes and maintaining day-to-day operations, but they may need to defer to a CPA for strategic or highly regulated decisions.

Cost Considerations

While CPAs generally command higher fees than accountants, it is crucial to evaluate this cost in the context of value. A CPA may save your business money by avoiding legal issues, optimizing tax strategies, and improving financial decision-making. Conversely, if your financial operations are straightforward and stable, the higher cost of hiring a CPA may not be justified.

It’s important to weigh the professional’s experience, range of services, and your business complexity rather than simply focusing on upfront costs. In many cases, the right professional could lead to cost savings over time.

Representation Before Tax Authorities

One of the most significant legal distinctions between accountants and CPAs is the ability to represent clients before the Internal Revenue Service. If your business is under audit or dealing with tax-related issues, a CPA has the authority to communicate directly with tax authorities on your behalf.

An accountant without CPA credentials cannot provide the same representation rights unless they are enrolled agents or attorneys. This capacity to act as a liaison with the IRS becomes a critical factor when your business encounters complex or contentious tax matters.

Ethical Accountability

Because CPAs are bound by the ethical standards set by the American Institute of Certified Public Accountants, you can expect a higher level of professionalism and transparency in their work. These standards include responsibilities like maintaining integrity, acting in the public interest, remaining objective, avoiding conflicts of interest, and applying due care.

While many accountants follow ethical principles voluntarily, they are not bound by a licensing body in the same way CPAs are. If you are looking for a financial advisor with formal accountability and legal oversight, a CPA may provide greater peace of mind.

Hiring for Specific Business Stages

The decision to hire an accountant or a CPA may also vary depending on the stage your business is in:

Startup Stage: At this stage, businesses benefit from accounting support in budgeting, setting up financial systems, and ensuring tax filings are accurate. An accountant is typically sufficient for startups with limited complexity.

Growth Stage: As a business scales and introduces new revenue streams, strategic financial guidance becomes more important. A CPA can advise on financial forecasting, tax efficiency, and compliance.

Maturity Stage: Businesses entering maturity often face more stringent reporting requirements, stakeholder accountability, and potential audits. CPA support is valuable here for audit preparation, investor relations, and regulatory filings.

Exit or Transition Stage: If your business is preparing for sale, succession planning, or public listing, a CPA can offer crucial guidance on valuation, financial due diligence, and legal compliance.

Vetting and Selecting the Right Professional

Regardless of whether you choose a CPA or an accountant, it’s essential to perform due diligence when hiring a financial professional. Consider the following steps:

1. Verify Credentials: Ensure the candidate’s degrees and certifications are legitimate. For CPAs, check their license status with your state’s Board of Accountancy.
2. Assess Experience: Look for professionals with industry-specific experience and a strong record of client success. Ask for references and case studies when possible.
3. Understand Services Offered: Not all CPAs or accountants provide the same range of services. Clarify your expectations and ensure the professional has the capabilities to meet them.
4. Evaluate Communication Skills: Financial advisors must explain complex concepts in ways that are easy to understand. Choose someone who can communicate clearly and openly.
5. Consider Availability and Responsiveness: Timeliness is crucial, especially around tax deadlines, audits, or financial reviews. Ensure your chosen professional is accessible when you need support.

Future Trends in Accounting and CPA Services

The accounting landscape is evolving due to technological advances, regulatory changes, and shifting client expectations. Here are some trends that may influence the choice between CPAs and accountants:

Digital Transformation: Automated bookkeeping, cloud accounting, and AI-driven analytics are changing how financial professionals operate. Both CPAs and accountants must adapt, but CPAs often lead in integrating these tools for strategic analysis.

Remote and Outsourced Services: Many businesses now consider remote accounting and CPA services, enabling access to specialized professionals regardless of geography. This trend broadens the options for both types of professionals.

Increased Regulation: As financial regulations become more complex, the demand for licensed professionals who can navigate these rules is expected to rise. CPAs are well-positioned to meet this need.

Focus on Advisory Services: Many financial professionals are shifting from data entry and report generation to offering advisory and consulting services. CPAs often take the lead in this transformation by offering high-level strategic input.

Making the Final Decision

Choosing between a CPA and an accountant ultimately comes down to your business’s current needs and long-term goals. If your business requires basic financial support, bookkeeping, or standard tax preparation, an accountant may be the right choice. If you need strategic guidance, audit preparation, complex tax planning, or regulatory compliance, hiring a CPA is often the better investment.

Ask yourself the following questions:

• Is my business preparing for an audit, merger, or acquisition?
• Do I need legal representation before the IRS?
• Are my tax needs complex or unusual?
• Am I seeking strategic financial guidance for scaling or compliance?
• Do I want an advisor bound by formal ethical standards?

If you answered yes to any of these, a CPA might be the more appropriate choice.

Conclusion

Understanding the differences between a CPA and an accountant is essential for making informed decisions about your business’s financial needs. Throughout this series, we’ve examined the qualifications, roles, responsibilities, and strategic advantages each professional brings to the table.

We explored the foundational differences in education, certification, and licensing. CPAs are held to more rigorous academic and professional standards, including passing the CPA exam and maintaining ongoing continuing education. While accountants typically hold a bachelor’s degree and perform essential financial tasks, CPAs are licensed professionals capable of handling more complex financial duties.

We focused on the daily responsibilities and limitations of both roles. Accountants are invaluable for maintaining accurate financial records, budgeting, preparing tax filings, and offering financial guidance. CPAs go beyond these basics, taking on regulatory audits, financial forensics, SEC filings, and representation before tax authorities. Their ability to serve in a fiduciary capacity adds a layer of trust and accountability not legally required of non-certified accountants.

We addressed practical considerations such as salary expectations, career growth, job markets, and the decision-making process when choosing between hiring a CPA or an accountant. We highlighted that while CPAs often command higher salaries due to their expertise and licensure, the return on investment can be significant for businesses with complex financial structures or regulatory requirements. On the other hand, accountants can be more cost-effective for businesses with simpler financial needs.

Ultimately, the decision between a CPA and an accountant depends on the size, complexity, and financial objectives of your organization. For routine bookkeeping, budgeting, and standard tax preparation, an accountant may be sufficient. However, if your business faces audits, needs SEC compliance, or requires expert financial strategy and representation before tax authorities, partnering with a CPA is the most strategic choice.

Whether you’re a small business owner seeking dependable financial oversight or a growing enterprise navigating complex financial regulations, having the right financial professional on your team is a crucial step toward achieving long-term success.