What Is the Difference Between Accountant and CPA?

The terms "accountant" and "CPA" (Certified Public Accountant) are often used interchangeably in everyday business conversation, but they are definitively not the same. This common confusion stems from the fact that both professionals work with financial data and adhere to standard accounting rules.

The crucial distinction lies in licensing, authority, and professional scope. While all CPAs are accountants, only a select group of accountants are CPAs. The CPA designation is a high-level professional license that bestows specific legal rights and responsibilities.

This article will help readers understand what sets a CPA apart from an unlicensed accountant, detail the rigorous path to earning this credential, and explain why the CPA designation is vital for career growth, legal authority, credibility, and client trust in the financial world.

The Legal Distinction — Why a CPA Has a License and an Accountant Does Not

The primary difference between the two titles is the license. The title "accountant" is generally unregulated, whereas the title "CPA" is regulated by state law.

An Accountant is broadly defined as anyone trained in the recording, summarizing, and analyzing of financial transactions. No specific license or certification is required to use the title "accountant" or to work in most private industry accounting roles (e.g., staff accountant, bookkeeper). Their qualifications are typically based on education and practical experience.

A CPA (Certified Public Accountant) is a state-licensed professional who has met strict state-mandated requirements in education, examination, and experience.

Key aspects of the CPA's legal standing:

• Regulation: CPAs are regulated by the state Board of Accountancy in the state where they practice.

• Adherence to Standards: They must adhere to a strict code of professional ethics and fulfill mandated Continuing Professional Education (CPE) requirements to maintain their license.

• Legal Authority: CPAs have the legal authority to perform specific services—most notably, to sign audit reports, issue official financial opinions, and represent clients before the IRS. Unlicensed accountants do not possess these privileges.

Example: An in-house staff accountant can prepare the company’s internal financial statements. However, if the company seeks a bank loan or conducts an IPO, only a CPA can audit and officially certify those financial statements for external public or regulatory use.

Education and Experience Requirements — The Path to Becoming a Certified Public Accountant (CPA)

The path to becoming a CPA is one of the most rigorous in the business world, distinguishing licensed professionals from those with just a degree or experience.

The Academic Path

The foundation of the CPA credential is a demanding educational requirement:

• Bachelor’s Degree: A bachelor’s degree in accounting or a related field is the minimum starting point.

• 150 Semester Hours: Most U.S. states require candidates to complete 150 semester hours of higher education. This typically means earning a bachelor’s degree (120 hours) plus additional coursework, often satisfied by pursuing a master's degree in accounting or taxation, or through specialized post-baccalaureate programs.

The Uniform CPA Examination

Candidates must pass the comprehensive Uniform CPA Examination, a four-part, 16-hour test administered by the American Institute of CPAs (AICPA). The four sections test mastery of complex material:

Supervised Experience

After passing the exam, candidates must complete 1 to 2 years of supervised, qualified experience under a licensed CPA. This ensures practical application of the principles and ethical standards learned.

In contrast, an unlicensed accountant may have a bachelor’s degree or simply a significant amount of practical experience. There are no mandatory exam or continued education requirements for the general title.

The Authority of a CPA — Only a CPA Can Perform Audits and Sign Certain Tax Forms

The CPA license is a delegation of public trust, granting the holder exclusive rights and responsibilities that are critical to the financial system.

Exclusive Rights and Responsibilities of a CPA

These powers are granted by law to maintain public trust, ensure the integrity of the financial statements used by investors, and guarantee compliance with rigorous accounting and tax standards.

The CPA is often viewed as a trusted financial advisor, not just a recordkeeper. They are bound by ethical standards (like those established by the AICPA) that prioritize the public interest over client loyalty, particularly in auditing and assurance roles.

Salary and Career Opportunities — The Value of the CPA Designation in the Finance World

The CPA credential provides a significant and quantifiable boost to both earning potential and career mobility, serving as a powerful return on the investment made in education and the exam.

Earning Potential

The CPA designation typically commands a substantial salary premium due to the required expertise and legal authority.

Note: Salary ranges vary widely based on location, industry, and years of experience.

Career Flexibility and Roles

The CPA license opens doors to top-tier, high-responsibility roles that are generally unavailable to unlicensed accountants.

• Accountant: Common roles include bookkeeper, staff accountant, payroll specialist, or financial analyst in a private company.

• CPA: Eligible for leadership roles such as External Auditor (in public accounting firms), Controller, Chief Financial Officer (CFO), senior tax advisor, or Partner in a CPA firm.

The reputation and trust embedded in the CPA license are invaluable. Clients, investors, and employers see the designation as proof of professional integrity, technical competence, and a commitment to ethical standards.

Can an Accountant Become a CPA? The Steps to Earning the Credential

Absolutely, any accountant can pursue CPA licensure, provided they meet the educational and experience requirements mandated by their state's Board of Accountancy. The CPA is the natural next step for professional accountants seeking career advancement.

The process of transitioning from an accountant to a CPA involves a structured five-step path:

1. Complete 150 Credit Hours: The most common hurdle is the 150-credit hour requirement, often achieved via a master's degree or by taking additional undergraduate courses specifically focused on accounting, business, and ethics.

2. Apply and Sit for the Uniform CPA Exam: Successfully pass all four sections of the challenging exam.

3. Gain Qualified Work Experience: Secure the required 1-2 years of supervised work experience, often in public accounting (audit or tax), under the guidance of a currently licensed CPA.

4. Apply for Licensure: Submit the application to the state board, providing proof of education, exam success, and experience.

5. Maintain the License: Once licensed, fulfill the state’s mandatory CPE requirements to ensure skills remain current and ethical standards are upheld.

Pursuing CPA certification is an investment in credibility, career advancement, and earning power. Even small business accountants benefit profoundly from CPA skills—the enhanced trust and expanded service offerings (especially in tax representation and financial review) often lead to higher client retention and billing rates.

Conclusion

The distinction between an accountant and a CPA is not one of function, but one of authority and accountability. While accountants focus on the crucial tasks of recording and reporting daily financial transactions, CPAs carry the legal and ethical authority to audit, advise, and officially represent clients before regulatory bodies like the IRS and the SEC.

Earning a CPA license is more than just passing an exam; it is a significant professional milestone that demonstrates technical mastery, adherence to the highest ethical standards, and a commitment to public trust. For anyone pursuing a serious career in accounting or finance, aiming for the CPA credential is the most effective long-term goal for achieving professional excellence and unlocking the highest levels of opportunity.