CPA vs PA

CPA vs PA

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Difference Between CPA & PA

Both Certified Public Accountant (CPA) and public accountant (PA) are professionals rendering accounting, auditing, consulting, and taxation services. The primary difference between CPA vs PA is that the former is a specialized and certified version of the latter. CPAs are well-trained and more experienced professionals than PAs. While PAs handle lower-level accounting tasks, CPAs manage high-level responsibilities. PAs with the necessary education and experience can proceed to gain certification to practice as CPA.

CPA vs PA Comparison Table

Particulars CPA PA
Definition State board licensed professional who has fulfilled the education, exam, and experience requirements. Entry-level accounting expert providing accounting, auditing, or tax-related services.
Regulatory body AICPA or NASBA
Professional Requirements Uniform CPA Exam
Bachelor’s Degree with 120-150 credit hours
Experience (1-3 years)
These may vary as per the chosen jurisdiction.
Bachelor’s degree in accounting or related field
Job Responsibilities Supervising budget and financial management Organizing and upgrading financial records Conducting periodic audits Preparing schedules, filling forms, and filing tax Returns Checking for financial loopholes Forecasting revenues and analyzing ledgers Preparing and verifying financial reports Auditing and reviewing accounts Planning finances Advisory services Handling tax matters Analyzing budgets
Exclusive Rights Drafting audited financial statements Filing a report with the SEC Signing a client’s tax return as a paid preparer No such exclusive rights.
Related Industries Public, Corporate, Education, Non-Profit, Government, Self-employed, Consulting Government, Finance and insurance, Corporate, Self-employed, Consulting, Non-profit organizations
Required Skills Problem-solving, analytical and research skills, Leadership and communication skills, Technical know-how, Personal skills, Project management skills, High ethical standards, Client-focused, Keen business sense Communication skills, Math Skills, Organizational skills, analytical skills, Upgraded Tax Knowledge, Innovative
Specialization (Not Mandatory) Financial planning, Tax management, Investment planning, Audit Financial forensics, IT, Business valuation   Accounting, Auditing, Tax, Forensic accounting Advisory
Job Roles CFO/CEO, Consultant, Corporate, controller, Internal auditor, Tax Manager, Financial analyst Internal auditor, Management accountant, Forensic accountant, Financial advisors, Tax accountant
Average annual salary (approx.) $ 76,161 $ 62,400

What is CPA?

A CPA is an accounting professional who has passed the Uniform CPA Exam and fulfilled the state boards of accountancy’s necessary experience and educational requirements. The American Institute for Certified Public Accountants (AICPA) coordinates with the National Association of State Boards of Accountancy (NASBA) to conduct the CPA exam and issue the license. 

CPA exam and licensing requirement

To gain this globally recognized credential, you must fulfill the four E’s:

  • Education (bachelor’s degree with 120-150 credit hours)
  • Exam (score at least a 75 in the each exam section)
  • Experience (1-3 years)
  • Ethics exam

These requirements may change as per your state board. Please note that you must sustain your CPA license through the Continuing Professional Education (CPE) every 1-3 years.

Roles and responsibilities

The CPA titleholders are strategic business advisors and decision-makers who help an organization attain its financial goals with ease. From consulting on taxation and accounting to investigating criminal fraud, their job profile encompasses a broad range of activities across industries. 

Career opportunities

This credential opens up countless career opportunities for you as a chief financial officer, consultant, analysts, corporate controller, tax manager, internal auditor, etc. Their financial expertise and high ethical standards make them the ultimate choice for managing all financial aspects of a business.

Career Prospects

During the last 20 years, CPAs have gained immense prominence in almost every business sector out there. Even during the COVID-19 pandemic, their demand in the industry increased as businesses relied on them for sound financial advice to ensure market sustenance. 

Benefits of CPA license

CPA is a rewarding title. As per the AICPA’s 2017 salary survey of CPAs in the U.S., the national average annual CPA salary is $119,000, excluding bonus. Besides an impressive salary, the CPA license guarantees a stable career, global exposure, excellent career prospects, and an enviable professional stature.

Privileges of CPA vs PA

Please note that all CPAs are PAs, as CPAs usually start out as PAs. Hence, they are well-versed with all the job responsibilities of a PA. CPAs are PAs with an additional badge of certification. Certification ensures high professional standards in performing their job. The state boards of accountancy regulate their practice.

The certification also imparts them the expertise to go beyond the low-grade accounting tasks performed by a PA. Their intense training and exposure to various financial concepts confer them higher-order skills to analyze and interpret a company’s financial information.

CPAs enjoy certain privileges owing to their certification. They are entitled to sign all audited financial records of a publicly traded company, file a report with the U.S. Securities and Exchange Commission (SEC), and represent you before the Internal Revenue Service (IRS) in case of any tax dispute.

What is PA?

A PA is an entry-level accounting expert who manages the basic accounting, auditing, taxation, and consulting activities for a client on behalf of a public accounting firm. A public accounting firm is a firm that provides third-party accounting services to businesses and corporations.

Education

You must have a bachelor’s degree in accounting or a related field to practice as a public accountant. Moreover, you may specialize in taxation, forensic accounting, and advisory services. In addition to that, you need to possess good communication, computing, analytical, and organizational skills.

Role and responsibilities

PAs work on financial documents and tax returns that a client needs to report as per law. Their primary responsibility is to prepare, analyze, and audit financial statements to ensure accuracy and conformity to the Generally Accepted Accounting Principles (GAAP). 

They also offer advice to clients on important financial matters. They make the most of their knowledge to design the best possible financial strategies for their clients.

Career opportunities

Since all companies need to maintain financial records and file returns, PAs have good job prospects. They usually start at junior positions in big public accounting firms. With experience, they proceed to acquire certification and take up senior roles. Moreover, they can also work as accountants or auditors in private or public companies.

As the name suggests, their allegiance lies with the public, enhancing the credibility of their interpretation of financial records. Their client profile varies from corporations, government agencies, and individuals to non-profit entities.

Career prospects

While comparing the salary of PAs to CPAs, it is evident that PAs get paid much less than CPAs. The U.S. Bureau of Labor Statistics (BLS) reports $73,560 as the median pay for accountants and auditors in the year 2020.

However, PAs can advance their career, both professionally and monetarily, by acquiring the CPA certification. Accounting firms usually hire public accountants and encourage them to get certified.

Please note that PAs can move from public accounting to government, corporate or management accounting. However, the reverse happens rarely. According to the BLS, accountants and auditors’ expected job growth rate is 4% (2019-2029).

CPA vs PA debate

CPAs almost always dominate the CPA vs PA debate. PAs rank way below CPAs in the workplace hierarchy. Though their roles are pretty similar, PAs, in the absence of certification, are not authorized to sign the audited statements of a public limited company, submit a report to the SEC, or deal with the IRS on tax issues. Due to their lack of experience, training and certification, they usually work as subordinates to CPAs.

As per human resource consulting firm Robert Half’s Accounting and Finance Salary Guide, the CPAs earn 5-15% higher remuneration than their non-certified counterparts. As mentioned earlier, employers consider CPA certification a symbol of credibility and expertise and pay them a higher salary.

CPA vs PA Infographics

This has been a guide to CPA vs PA. Here we discuss the difference between CPA and PA based on education, roles and responsibilities, career prospects, career opportunities etc. You may also have a look at the following articles –

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