Difference Between CPA & PA

CPA vs PA Comparison Table

What is CPA?

A CPA is an accounting professional who has passed the Uniform CPA ExamCPA ExamA Certified Public Accountant (CPA) is a US state board-issued license to practice the accounting professionread more 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 officerChief Financial OfficerThe full form of CFO is Chief Financial Executive, and he or she is a top level executive of the firm who is responsible for the firm’s overall finance functions and has the authority to make financial decisions for the organization. read more, consultant, analysts, corporate controller, tax manager, internal auditorInternal AuditorInternal audit refers to the inspection conducted to assess and enhance the company’s risk management efficacy, evaluate the different internal controls, and ensure that the company adheres to all the regulations. It helps the management and board of directors to identify and rectify the loopholes before the external audit.read more, 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 informationFinancial InformationFinancial Information refers to the summarized data of monetary transactions that is helpful to investors in understanding company’s profitability, their assets, and growth prospects. Financial Data about individuals like past Months Bank Statement, Tax return receipts helps banks to understand customer’s credit quality, repayment capacity etc.read more.

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 accountingBasic AccountingAccounting is the formal process through which a company attempts to present its financial information in a way that is both auditable and usable by the general public. read more, auditing, taxation, and consulting activities for a client on behalf of a public accounting firmAccounting FirmPricewaterhouseCoopers (PwC) LLP, Ernst &Young LLP, Deloitte LLP, KPMG LLP, and Grant Thornton LLP are among the top accounting firms that provide services to various individuals, organizations, and other entities.read more. 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 accountingForensic AccountingForensic accounting is the investigation of fraud and misrepresentation.read more, 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 PrinciplesGenerally Accepted Accounting PrinciplesGAAP (Generally Accepted Accounting Principles) are standardized guidelines for accounting and financial reporting.read more (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.

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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