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CPA vs. Accountant: What Are the Differences?

By Noelle
Sep 5, 2023

If you’ve thought about pursuing a career in accounting, you may have wondered about the differences between an accountant and a Certified Public Accountant (CPA). The terms “accountant” and “CPA” are often used interchangeably, but there are some significant differences to factor in when considering your career aspirations.  

While every CPA is an accountant, not every accountant is a CPA. An accountant can get started in the field with a bachelor’s degree in accounting. A CPA, on the other hand, has additional education and licensing credentials from the American Institute of Certified Public Accountants (AICPA) and is monitored by the Boards of Accountancy. CPAs will need to pass a licensing exam in the state in which they intend to practice, as well as meet any other criteria their state may require.  

This blog takes a deeper dive into the differences between accountants and CPAs, as well as the career outlook for both. 

Understanding CPAs and Accountants

Both CPAs and accountants are professionals in the field of finance. Accountants manage financial records, prepare tax returns, audit records, and offer financial planning for both individuals and organizations. CPAs are accountants who have met rigorous licensing requirements and possess advanced expertise. They often specialize in taxation, auditing, or consulting. Both roles involve providing financial insights, guiding strategic decisions, and ensuring financial transparency for individuals, small businesses, corporations, and other organizations.  

Tasks and Responsibilities of a CPA

As finance professionals, CPAs possess an in-depth knowledge of accounting principles and practices. Their responsibilities include auditing, financial consulting, tax services, analyzing financial data, and representing clients. Getting started in this career field will require earning an accounting degree and passing the CPA exam. Continuing education is also necessary for CPAs to stay updated with the latest industry trends and changes.

A CPA credential is highly regarded for those in the accounting profession, and there are some accounting services that only licensed CPAs are eligible to execute. For example, accountants must be CPAs to file reports with the SEC (Securities and Exchange Commission), and auditors must also have the licensing requirements of a certified public accountant.

Tasks and Responsibilities of an Accountant

Accountants play a vital role in financial management for both individuals and organizations. Their responsibilities include tax preparation, managing financial records, preparing financial statements, ensuring compliance with tax codes, and analyzing financial data. Typically, accountants need at least a bachelor's degree in accounting or a related field, and many pursue professional certifications such as CPA to enhance their expertise and credibility in the field. In addition to education and certifications, accountants need a solid understanding of math, strong organizational skills, an analytical mindset, and proficiency with accounting software.

Chartered Accountants: A Global Perspective

Chartered accountants operate globally, specializing in various areas of accounting such as taxation, financial accounting and reporting, international audits, applied finance, and strategic financial management. They are essential in the finance sector, especially in commonwealth countries where the designation is recognized. To become a chartered accountant, individuals need to complete a bachelor's degree, gain work experience, undergo specialized training, and pass an examination.

Chartered Accountant vs. CPA: Overlap and Differences

The key distinction between chartered accountants and CPAs is geographical. CPAs are certified for U.S. work, while chartered accountants operate internationally. Both provide advanced accounting services such as auditing financial statements, corporate tax filings, and financial consulting and have expertise in taxation, applied finance, and management accounting. Chartered accountants play a vital role in creating strategic financial growth and influencing financial decisions both domestically and internationally, serving as leaders, advisors, and decision-makers across various industries.

CPA vs. Accountant: Career Prospects

The demand for financial transparency and compliance ensures a wide range of opportunities for accountants in public accounting, corporate finance, government agencies, and non-profit organizations. Accountants can advance from entry-level positions to managerial and executive roles, specializing in areas like audit, taxation, financial analysis, and management consulting. CPAs enjoy extended career opportunities exclusive to their license. For example, they possess the authority to file reports with the SEC and conduct attestations. Many public accounting firms and law offices prioritize hiring CPAs due to these specialized legal responsibilities. 

Career Prospects for a CPA

Holding a CPA credential not only validates your expertise but also unlocks doors to various roles, allowing CPAs to shape their careers according to their interests, strengths, and aspirations. Career opportunities and potential salaries for certified public accountants include: 

Compliance auditor: Ensuring adherence to local, state, and federal regulations, and internal company standards. Average salary: $67,270 per year.

Forensic accountant: Examining financial data for missing funds, recovering funds, and presenting findings as evidence in legal cases. Average salary: $79,753 per year.

Budget analyst: Preparing budget reports, monitoring spending, analyzing financial goals, and supporting budget planning. Average salary: $80,987 per year. 

Accounting professor: Educating students in finance and accounting departments, developing curricula, and assessing students' understanding. Average salary: $79,736 per year. 

Treasury manager: Managing revenue, cash flow, financial activities, advising management. Average salary: $95,859 per year. 

Finance director: Developing financial plans, forecasting, tax and audit oversight, policy development. Average salary: $107,696 per year.

Chief financial officer (CFO): Overseeing all financial activities, tracking cash flow, analyzing financial health. Average salary: $149,025 per year. 

Career Prospects for an Accountant

A career in accounting offers diverse opportunities across various sectors. Accountants contribute significantly to economies by facilitating smooth transactions and preventing fraud. They find roles in auditing, tax, managerial, and cost accounting such as:

Tax accountant: Specializing in tax returns, earning around $77,000, with a 6% growth projection.

Financial consultant: Guiding individuals in financial planning, earning about $94,000 annually, with a 15% job growth. 

Financial manager: Leading financial aspects, advising on profits, averaging $132,000 yearly, and expecting a 17% job growth. 

Personal financial advisor: Assisting in budgeting, planning, and earning over $94,000 annually, with a 15% job growth. 

Financial analyst: Optimizing profits through data analysis, earning about $92,000, with a 9% growth projection.  

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