The terms “Certified Public Accountant” and “Accountant” are sometimes used interchangeably, but there are important differences between them.
The terms “Certified Public Accountant” and “Accountant” are sometimes used interchangeably, but there are important differences between them.
For many small or medium-sized businesses, an accountant is adequate to handle daily financial operations. However, a CPA conducts in-depth analysis of financial reporting, internal and external auditing, tax planning, tax preparation and others.
The American Institute of Certified Public Accountants (AICPA) highlighted that a CPA is not legally a fiduciary. However, by adhering to the AICPA Professional Code of Conduct, a CPA is expected to treat clients with honesty, truthfulness and objectivity, while staying conflict-free. Whether you are looking to hire a regular accountant or CPA tax accountants near San Francisco, read this blog to clear up any confusion.
CPAs have the following responsibilities, which an accountant lacks:
This is especially crucial when it comes to having audited reports filed with the Securities and Exchange Commission (SEC). A CPA can help fledgling businesses understand financial statements and what they signify for them now and in the future.
Anybody can prepare their taxes. Small businesses sometimes find it difficult to prepare business taxes. A CPA is the best individual for tax preparation because they are conversant with complex tax regulations, which accountants are not.
In addition to their deep understanding of tax rules and what you cannot legitimately deduct, a CPA can represent you before the IRS during an audit. While an accountant can draft your business tax return, only a CPA can defend it if the IRS or state tax authorities have any issues or concerns.
The majority of audits are performed by CPAs, while accountants may occasionally perform in-house audits. External audits, or auditing of public corporations, are always performed by a CPA.
An accountant has the following responsibilities:
An accountant’s typical responsibilities include coordinating and recording financial transactions. This includes accounts payable, receivable, collections, depreciation, journal entries, and budgeting.
Depending on the firm, accountants may also lead bookkeepers or accounting clerks and manage payroll.
At the end of each month, accountants reconcile bank and general ledger balances. For example, if the closing utility expense account in the general ledger is more or lower than planned, it is the accountant’s responsibility to determine why.
Experienced accountants may dissect and evaluate financial statements, including assessing cash flow, establishing accounting ratios, and making spending recommendations.
Accountants are also responsible for assessing business expenses and reviewing employee travel expenses, and they may be in charge of staff payroll, which includes processing and ensuring that all reports and tax payments are submitted on time.
Accountants are typically responsible for developing departmental and organizational budgets. Staff accountants are already familiar with company operations, so creating a budget is a natural extension of their knowledge and skills.
It depends on the current scenarios. Both CPAs and accountants are essential assets to any organization. In an ideal world, a firm would leverage its knowledge by hiring an accountant to oversee day-to-day financial activities and a CPA for audits, business consulting and taxes.
So, if you require a CPA for your business, it’s time to schedule an appointment with an accounting consulting service in San Francisco.
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