A Certified Public Accountant (CPA) and a general accountant both work with financial data, but their qualifications, legal authority, and scope of practice are fundamentally different. Understanding these separate roles and the rigorous processes required to attain the CPA designation clarifies the value each professional brings to the financial landscape.
Defining the General Accountant
A general accountant is a financial professional who manages and analyzes the financial records for individuals, companies, or organizations. The title “accountant” is broad and typically requires a bachelor’s degree in accounting or a related business field. This professional handles the day-to-day operations of a financial system, ensuring transactions are accurately recorded and categorized.
Their work involves routine tasks like bookkeeping, processing payroll, managing accounts payable and receivable, and preparing internal financial statements for management review. The general accountant’s focus is usually on internal financial reporting, providing data necessary for leadership to make informed business decisions. The title “Accountant” does not require any specific state license or certification to practice in the United States.
Defining the Certified Public Accountant (CPA)
A Certified Public Accountant is a regulated financial professional who has met state-level requirements for education, examination, and experience. The “Certified” and “Public” components signify that this individual has earned a license from a state Board of Accountancy, granting them the authority to practice public accounting. Only a fraction of accountants hold the CPA credential.
This designation requires adherence to a strict ethical framework, such as the American Institute of Certified Public Accountants (AICPA) Code of Professional Conduct. The CPA’s work is continually regulated by state boards, which mandate ongoing continuing professional education to maintain the license and ensure the professional remains current on complex regulations and standards. This oversight provides the public with assurance regarding the CPA’s competence and integrity.
The Critical Difference: Licensing and Scope of Practice
The primary distinction between a CPA and a general accountant is the CPA’s exclusive legal authority to perform specific functions known as “attest services.” Attest services involve an independent review and verification of a client’s financial statements, including issuing an opinion on their fairness and reliability. General accountants are legally prohibited from performing these services.
The most recognized attest service is the financial statement audit, often required by banks, investors, or regulatory bodies like the Securities and Exchange Commission (SEC). This function provides an independent third-party declaration that the company’s financial data is accurate and complies with Generally Accepted Accounting Principles (GAAP). State laws and federal regulations grant CPAs this authority because the public relies on their verified opinion to make major economic decisions. Attest services also encompass reviews, which offer limited assurance, and compilations, which involve presenting financial data without providing an opinion or assurance.
The Path to CPA Certification
Earning the CPA license involves a multi-step process often described by the “Three E’s”: Education, Examination, and Experience. The educational requirement mandates a minimum of 150 semester hours of college education, which is 30 hours beyond the typical four-year bachelor’s degree. This additional coursework ensures candidates have a comprehensive understanding of accounting and business subjects.
Candidates must then pass the Uniform CPA Examination, a four-part test covering Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG). This exam assesses the technical knowledge and skills required to protect the public interest. Finally, candidates must gain a specified amount of professional accounting experience, typically one to two years, which must be verified and supervised by a currently licensed CPA.
Career Implications and Earning Potential
The CPA designation acts as a career accelerator, providing an advantage in job mobility and earning potential over a non-certified accountant. The license is a recognized symbol of expertise and credibility, which frequently leads to faster promotions and access to higher-level positions. CPAs often command salaries that are 10% to 20% higher than their non-certified peers, reflecting the value of their specialized knowledge and legal authority.
The credential is often a prerequisite for senior leadership roles within a company, such as Controller, Vice President of Finance, or Chief Financial Officer (CFO). CPAs also have the flexibility to transition into specialized areas like forensic accounting, international taxation, or consulting, which increases their professional value. The commitment to obtaining the license translates into a higher ceiling for career advancement and greater long-term financial security.
When to Hire a CPA vs. a General Accountant
The decision of which professional to hire should be based on the complexity and legal necessity of the financial task. A general accountant is suitable for routine, internal financial management, such as daily bookkeeping, managing budgets, processing payroll, and preparing simple tax returns. Their services are often more cost-effective for small businesses or individuals who need ongoing administrative support.
A CPA is necessary when a higher level of assurance, legal authority, or specialized expertise is required. Businesses should hire a CPA when seeking an external audit or review for investors, applying for substantial bank loans that require verified financial statements, or dealing with complex federal or multi-state tax issues. Furthermore, any individual or business needing representation before the Internal Revenue Service (IRS) or requiring an expert opinion on compliance with regulatory standards must engage the services of a licensed CPA.