If you’ve never worked with a tax professional before, it’s natural that you’d have questions about the difference between a Certified Public Accountant (CPA) and an accounting firm. For this blog post, we wanted to highlight some of the ways that CPAs and accountants are alike, while noting the key, important ways in which they differ.
Accounting firms help clients with a wide array of services, such as accounts payable / receivable, bookkeeping and payroll processing. They make sure that financial transactions are both accurate and legal, and they help individuals and businesses use financial statements to understand the health of their finances. If they work for a business, the accountant will provide information to investors that show how a company is performing during a period of time (ie: during the first quarter of the fiscal year.)
Certified Public Accountants (CPAs) are accountants who have passed a state licensing exam (note: licensing requirements vary from state to state.) In most cases, CPAs are required to have minimum education requirements, such as a bachelor’s degree in a related field. Whereas all CPAs are accountants, not all accountants are qualified to be CPAs.
Key differences between the two
First, it should be noted that CPAs are permitted to represent taxpayers before the IRS. Accountants, on the other hand, do not have standing with the IRS and can thus, not represent clients before the Internal Revenue Service. CPAs can also sign tax returns and represent clients during tax audits. Accountants cannot.
Although CPAs charge more than accountants, there’s good reason for that. CPAs must pass a rigorous texting exam in the state they want to practice. After candidates receive their CPA license, they’re required to take continuing education classes to ensure they remain up to date with the latest information and changes that have taken place within the tax code and within the accounting world.
If you need help with individual or business tax preparation services, there are many, many benefits in hiring a CPA over an accountant.
The professionals at Hughes, Snell & CO are committed to helping our clients with a variety of services, such as tax planning, estate planning, tax preparation and more. For more information on how our team of highly-trained CPAs and consultants can help guide you, regardless as to your financial needs, call us today at 239-939-2233 to learn more.