Are you confused about what the differences are between a Certified Public Accountant or an accountant? Although they seem to have the exact same qualifications and experience there are some key differences that you will need to know before you make a decision on which one you want to hire https://accountantsglasgow.net/.
What is the Difference?
One way to explain what the difference is between these professionals is to say that all CPAs (companies) are accountants. However, not all accountants can be called CPAs. Confused? It is difficult to differentiate these two professionals. CPA means a licensed finance professional who has passed state licensing exams. An accountant who has not passed this exam is not licensed by the State.
Both are involved in tax and finance-related work. They all adhere to the Financial Accounting Standards Board’s rules and regulations, such as the Generally Accredited Accounting Practices (GAAP). Both sets likely have college degrees. They may not have degrees in Accounting or Finance, but they are most likely both.
“Accuntant” can be used more broadly to describe a person who performs financial work. However, CPA can only ever be used by someone who has passed state licensing exams.
What makes CPAs so special?
The state licensing exam is the key reason these professionals are so valued. Licensing is a long-term exam that requires the passing of several areas in finance and taxes. To keep the license current, the professional must continue education and stay up-to-date with tax laws. Bookkeepers, and other financial professionals, do not need to comply with this requirement.
When is it a good idea to hire one
CPAs are often better than accountants in several situations. Three areas are particularly important:
Taxes. In most cases they will be more familiar tax law than other finance professionals. They are also known by the IRS to be certified preparers. This is important because certified preparedrs can represent clients better to the IRS if needed.
Financial Analysis. Anybody can do basic financial work like entering data and preparing reports. But a licensed expert must be able to complete a detailed analysis of the financial situation. They can also give advice on tax and financial problems that others cannot.