Dec 18 Comparing The 3 Main Types Of Accounting Professionals
Before you hire or employ any accounting professional, you should alas consider all the relevant occupational factors in line with your accounting needs. Some of the key professional considerations include qualifications & licensing, competence, specialization & experience, cost/service charges, industry reputation, availability etc. You can easily vet any prospective professional for any of these occupational concerns. The internet has really simplified the process of conducting background checks. In order to confirm and verify the academic and experiential qualifications and credentials of any accounting professional, you will have to visit the website of your state’s accounting licensing board. You will get a list of all certified and licensed accounting professionals in your area of interest on the board’s database. You can also check with various academic institutions and certification bodies, such as the American Institute of Certified Public Accountants (AICPA), to confirm academic accreditation. Online industry review sites and customer forums will furnish you with all other details regarding his industry reputation, competence, and even fair pricing. But before you go into all this trouble, you should first decide on the type of accounting professional to hire. There are three main types of accounting professionals, namely bookkeepers, general/business accountants, and Certified Public Accountants (CPAs), and they are all discussed below.
There are very many different professionals handling all kinds of specialized business and financial issues in the accounting world. We refer to these professionals using a myriad of titles based on their accounting specialties, such as tax lawyers, tax advisors, business consultants, investment advisors, auditors etc. But at the most basic level, we only have the three major types of accounting professionals listed above. Bookkeepers are at the lowest rung of the academic and professional ladder in the accounting industry. As their professional title suggests, bookkeepers are mainly tasked with the “keeping” of financial books. Bookkeeping is all about maintaining accurate records of all business transactions and accounting activities, and producing accounting reports when requested. Other tasks include payment of taxes and doing annual tax returns. Modern bookkeeping has improved greatly thanks to specialized accounting software like QuickBooks.
All accounting professionals are generally referred to as accountants. It is however very important to differentiate these professionals according to their academic training, certification, accreditation, and licensing. This helps in defining their professional scope, status and competence, and their legal capacity when dealing with the Internal Revenue Service (IRS). General or business accountants or just accountants are ranked second among the three major types of accounting professionals. In addition to bookkeeping, trained accountants are capable of preparing detailed financial statements and tax reports, and performing corporate audits. They have only one major professional weakness; they are not mandated by the IRS to represent taxpayers in tax-related legal issues.
Certified Public Accountants (CPAs)
A CPA is an expert accountant who has undergone additional training and passed certain academic and industry tests including the mandatory Uniform Certified Public Accountant Examination (Uniform CPA Exam). In order to ensure competency and legal compliance when hiring a Clifton NJ accountant for a business tax service, you should pick a fully certified, accredited, and licensed CPA. The national professional association for CPAs, AICPA sets the Uniform CPA Exam and the National Association of State Boards of Accountancy (NASBA) certifies all those who pass as CPAs. But they still have to get a practicing license from the state licensing board after fulfilling all the statutory and licensing requirements of that state. The main difference between CPAs and general accountants is that just like tax attorneys and enrolled agents, the former are legally allowed to represent taxpayers before the IRS, whereas the latter are classified as “unenrolled preparers” by the government tax agency.