Businesses must keep accurate financial records. For this reason, your decision to hire an accountant makes sense. However, when you search for information about business accounting, you may discover that you may choose to hire a certified public accountant. Before deciding, you should continue reading to learn about the differences and similarities between a CPA and an accountant.
Differences
CPAs can describe themselves as accountants, but accountants can’t present themselves as a CPA. To become a CPA, an accountant must pass a set of standardized examinations that measure their knowledge and competence. Accountants which pass the test can acquire a license from their state.
Financial rules among the states can vary. For this reason, the licensing process ensures that accountants know and understand state-specific laws, regulations, and rules. Whenever possible, when hiring a CPA, you should choose one that has a license in your state. So, for example, if your business operates in Salt Lake City, you should look for a Utah CPA.
In addition to meeting the academic requirements and passing the Utah CPA exam, an accountant must work under a fully licensed CPA for a specified amount of time before receiving a Utah CPA license. Afterward, the accountant can operate either independently or as part of an accounting firm.
Accountants can provide business accounting services without a license. In such a case, the prospective client or employer must independently assess an accountant’s qualifications based on their preferences. Also, being uncertified, an accountant may not completely meet a state’s professional competency and ethics requirements.
Becoming a CPA requires a certain level of education, knowledge, and experience. To stay in good standing, CPAs must stay in compliance with their state’s laws and regulations. In most cases, this involves a periodic continuing education requirement.
Similarities
Due to government laws and corporate policies, the submission of some financial reports and transactions may require the involvement of a CPA. However, many of these cases involve specialized situations. So, for instance, although any accountant can prepare financial statements, your business will probably will the services of a CPA if you need an audited or reviewed financial statement.
Under ordinary circumstances, businesses in Salt Lake City or elsewhere have the freedom to choose to hire either a CPA or an accountant. In such a case, the firm must choose the qualifications, experience, and salary requirements for their job openings. Also, their responsibilities can vary from bookkeeping to producing financial statements.
Should I Hire a CPA or an Accountant?
If your business requires the preparation of audited and reviewed financial reports, you must hire a Utah CPA. Aside from those specialized situations, only you can decide.
If a high standard of ethics, education, and experience mean a lot to you, hire a CPA. However, you need to know that CPAs often command larger salaries than their non-certified peers.
So, you may want to save money by choosing a non-CPA accountant for bookkeeping and other routine accounting tasks. On the other hand, you should consider hiring a CPA if you need to hire a controller to either oversee your accounting department or sell accounting services.