Do You Need a CPA to Be an Accountant?
There are numerous individuals who are interested in becoming an accountant and they may want to know whether they require a Certified Public Accountant (CPA) license. The process of becoming an accountant may take different directions depending on the career objectives, employment needs, and the kind of accounting job one wants to undertake. Although CPA is a very prestigious qualification in the accountancy sector, it is not always a prerequisite to be an accountant. In this article, we are going to discuss the distinctions between accountants and CPAs, when you might require a CPA and the advantages of gaining this certification.
What is an Accountant?
An accountant is one who deals with financial records, audits, tax returns and financial statements. They collaborate with companies, governmental organizations or individuals to make sure that financial data are correct and correspond to standards. Accountants may have specialization in various fields including tax accounting, management accounting or forensic accounting.
Types of Accountants
General Accountant: A general accountant is one who deals with the maintenance of financial records, preparation of reports and maintenance of accounting standards.
Tax Accountant: Expert in tax laws and assists individuals and businesses in tax planning, tax returns and tax minimization.
Management Accountant: This is a person who operates in organizations and is involved in the management of budgets, performance reviews, and financial analysis to help in making decisions.
Forensic Accountant: This professional specializes in the investigation of financial misstatements and fraud, and he or she may be employed by law enforcement or legal departments.
What is a CPA?
A Certified Public Accountant (CPA) is an accountant who has successfully passed the CPA exam and fulfilled a set of state requirements. The American Institute of Certified Public Accountants (AICPA) provides this certification, which gives more credibility to the qualifications of an accountant. CPAs are greatly respected due to their extensive understanding of accounting rules and principles and they have the authority to carry out some procedures that non-CPA accountants are not allowed to carry out.
Requirements to Become a CPA
In order to be a CPA, you should have the following:
Education: A minimum of 150 semester hours of college education in accounting or related areas is required in most states, and this is in addition to the normal 120 hours required to earn a bachelor degree.
Experience: You are required to have a certain number of professional accounting experience and this is usually under the guidance of a licensed CPA.
CPA Exam: You have to pass the CPA exam, which is a test of your accounting, auditing, regulation and business concepts.
Licensing: Once you have satisfied the educational and experience requirements, you will have to be licensed by the Board of Accountancy in your state.
Do You Need a CPA to Be an Accountant?
Although being a CPA is a great option to pursue by many people in the accounting profession, it is not a requirement to become an accountant. It is possible to be an accountant without being a CPA, and yet there are some restrictions in this.
When You Can Work Without a CPA
You do not need to be a CPA in case you have a job that requires bookkeeping, preparing basic financial statements, or preparing tax returns of individuals. Most of the entry-level accounting jobs and even mid-level jobs do not necessitate the CPA credential. Without a CPA you are still able to carry out a variety of accounting duties and gain experience.
When You Need a CPA
But there are some cases when it is necessary to be a CPA or it can be very useful:
Auditing: A CPA is needed to carry out financial statement audits. Auditing of financial statements and issuing of audit reports can only be done by CPA.
Corporate Tax Preparation: Tax returns of corporations, partnerships, or other complex entities may be tax preparation that requires a CPA, where tax returns of individuals can be prepared by non-CPAs.
Government and High-Level Positions: A CPA is needed in some government agencies or in high level accounting positions. Also, most of the leading companies do not employ CPAs in junior positions.
Public Accounting: In case you are interested in offering services to the general population, e.g. consulting, auditing, or tax preparation to a broad scope of customers, you will generally require a CPA license.
Benefits of Becoming a CPA
Even though it is not a necessity always, there are a number of benefits of earning a CPA.
These are some of the primary advantages of becoming a CPA:
Job Opportunities and Advancement
A CPA certification will provide you with additional employment opportunities, and it will help you become more competitive in the accounting industry. Most of the accounting jobs that pay better demand or favor those with a CPA license. As an example, a CPA may be needed in a job as a public accountant, a financial consultant, or a top manager.
Credibility and Trust
The title of a CPA sends a message to the employers, clients, and colleagues that you are a highly qualified professional skilled enough to tackle complicated accounting tasks. CPA designation is accepted and valued in any industry and could be used to establish trust among clients and employers.
Higher Salary
CPAs typically earn higher salaries than non-CPA accountants. The knowledge and credentials of a CPA license usually led to higher monetary benefits.
Career Flexibility
As a CPA, your work is also flexible since you can work in different industries. CPAs may work in big accounting firms, corporations, governmental, non-profitable organizations, or even establish their own firms. The possession of the CPA credential allows flexibility of career and growth opportunities.
Continued Education and Networking
In the process of upholding the CPA designation, you must participate in continuing professional education. This will help you to keep up with the current accounting practice, tax laws and trends in business. Also, membership in such organizations as the AICPA offers networking and access to resources.
