What Can a CPA Do That an Accountant Can't?

Credit: Photo by Nataliya Vaitkevich

The question of whether to hire a CPA vs. an accountant depends highly on what your business needs. Overall, for straight-forward, financial documentation and tax preparation, you may be able to get away with a non-CPA accountant. As your needs grow you’ll likely want a CPA. Further, if you are subject to an audit, you will also likely need a CPA if you want to be represented by an accountant to the IRS.

Starting With Key Terms: What Does "Accountant" Mean?

An accountant is pretty important for businesses of all sizes, as they handle the recording and checking of financial transactions and related reporting. Cash inflows and outflows only cover the very tip of the accounting iceberg. 

For a business of any size, figuring out cash flow is incredibly important. Accountants and CPAs help ensure the business owner is aware of their company's financial performance.

A regular accountant is often fine for the small business just starting out, and general accounting principles are still upheld as a result. However, growing or complex private businesses and public companies will have a growing need for CPAs.

The Sharp Financial Group is a full service financial services company that can help you with:

• Taxes and Accounting
• Business Planning
• Wealth Management
• Family Office

What Does CPA Stand For?

First and foremost, CPA stands for Certified Public Accountant, and it’s a pretty big deal: every CPA is an accountant, but not every accountant is a CPA. The certified public accountant (CPA) is a licensed designation. 

A CPA has specific state requirements, including passing the CPA exam and demonstrating deep knowledge of public accounting. 

To become a CPA, a candidate generally needs to obtain a high amount of credit hours in accounting, but doesn’t have to have a degree in accounting. They do have to be able to pass the uniform CPA examination, an exam that’s taken through the American Institute of Certified Public Accountants. 

A CPA isn’t just a job; given the high amount of personal investment, it truly is a career. The CPA license comes with high-level codes of ethics that require license holders to apply higher professional standards than an unlicensed accountant. 

So What can a CPA do That an Accountant Can’t?

CPAs commonly handle far more than just an individual’s company’s books, payroll or tax returns. Not only can they sign tax returns, and represent an individual or a company in front of the IRS, they also bring a greater breadth and depth of financial expertise from their professional requirements. 

Audited financial statements are also the purview of the CPA, something that a regular accountant cannot do. 

Managing financial transactions and reporting is important for an accountant, but the stakes are higher with CPAs since they can legally attest to the company’s financial statements. 

This legal ability comes with a higher degree of responsibility, which is why the CPA designation requirements are higher.

The Heavy Responsibility That CPAs Face

While all accounting professionals try to give the average small business their very best, the CPA license requires a focus on ethical behavior and professional excellence. 

The American Institute of CPAs has a strict code of conduct, and bad professional behavior can lead to legal action and the loss of the CPA designation entirely.

Credit: Kelly Sikkema

Why Most Businesses Need CPAs

The only person or firm who can provide independent audit services of financial statements is a CPA, and public companies are required to publish independently audited financial statements. However, that isn’t the only reason there’s a business need for CPAs. 

In a word, it’s about trust. Being able to produce financial analysis and reporting that has been prepared, reviewed, or audited by a CPA means that a business owner can build higher trust with stakeholders relying on the financial information, and help set the stage for greater growth. 

There are plenty of great accountants out there, but the knowledge specialization of CPAs is almost always greater, just given the inherent steps required to becoming a CPA in the first place. 

Utilize Insightful CPA Services With The Sharp Financial Group

Companies of all sizes can benefit from the depth of knowledge that CPAs bring to the table. The business environment is changing, and new defenses and strategies are required on all levels, including the financial element. 

To address this concern, The Sharp Financial Group has six full-time CPAs on staff, ready and able to help small businesses and high-asset individuals navigate an ever-changing financial space that requires more and more vigilance every year.

Schedule a consultation today and let a CPA analyze where your business is and where it can go by the numbers.