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Anyone can be an accountant—certified or public—but the qualifications, education, and scope of work is drastically different between the two.
If someone is good with numbers, can run QuickBooks or other bookkeeping software, or enjoys accounting in general, they can be an accountant. Public accountants, or people who work in the “accounting department” don’t necessarily have to have a college degree, be licensed, take any exams, or adhere to continuing education requirements. Nor, for the most part, do they have to meet legislated standards.
Public accountants can prepare tax returns. If they are at least 18 years old and compensated for this work, they must register and pass a test with the Internal Revenue Service to receive a Preparer Tax Identification Number (PTIN).
Public accountants can prepare a compiled financial statement, which simply means that there were no auditing or review methods used, and that the statements are based on information provided by management. They cannot perform an audit or review financial statements.
Certified Public Accountants (CPAs)
CPAs are the thoroughbreds of the accounting world. In order to become a CPA, individuals must:
- Earn an accounting degree from an accredited college or university.
- Pass all four parts of the CPA Examination, which includes: auditing and attestation, financial accounting and reporting, regulation, and business environment and concepts. (Beginning July 1, 2015, students in Florida must earn 150 hours of education prior to sitting for the Exam.)
- Pass the Professional Ethics Exam from the American Institute of CPAs.
- Obtain 1,800 work hours (usually one year) under the direct supervision of an actively licensed CPA.
CPAs licensed in Florida must complete 80 hours of continuing education every two years which includes eight hours of ethics training.
Once an individual becomes a CPA the sky is the limit. Of course they may work as an auditor or prepare taxes. Yes, if they are compensated to prepare tax returns, they must apply for a PTIN as public accountants do. A licensed CPA can conduct audits, and provide reviews and compilations of financial statements. CPAs also can represent their clients before the IRS.
Many CPAs go on to work in a wide variety of areas of expertise or work as consultants in a variety of industries. They work in environmental, forensic, or international accounting. CPAs serve as expert witnesses in litigation, and provide investment and financial planning. The overall skill of a CPA is to serve as a business advisor to their employers and clients.
CPA or PA
Just about anyone can be a public accountant, and create value to businesses or clients. To become a CPA takes fierce commitment to education and continued learning. A CPA is a business partner to any organization either as an employee, employer, or consultant.