STIRRING UP THE ALPHABET SOUP OF ACCOUNTING
When most people hear the title of accountant, the first thing they think of is “Oh, yeah, a CPA.” While that might be true, it is not necessarily so. People are frequently confused about all the classifications, certifications, names and titles given to people practicing in the field of accounting. To make matters worse, accounting professionals themselves don’t always agree between distinctions.
Probably the most recognized abbreviation in the USA is CPA, which stands for Certified Public Accountant. CPAlicensing requirements vary from state to state, but all CPAs must pass a series of rigorous tests administered by the AICPA, the American Institute of Certified Public Accountants.
CA stands for Chartered Accountant and is a designation most often used in countries other than the United States. Requirements vary from country to country, but to use the CA designation people typically must belong to the Institute of Chartered Accountants for their country. The Chartered Accountant designation is an approximate equivalent to the United States’ Certified Public Accountant.
The Association of Chartered Certified Accountants is a global body for professional accountants. Members of the ACCA are known as Chartered Certified Accountants. The ACCA is not generally recognized in the United States.
The Institute of Management Accountants is a US organization which strives to be the leading resource for developing, certifying, connecting and supporting accountants and financial professionals working in business. This organization is specifically for professionals working inside an organization, and not for outside auditors.
WHAT LETTERS ARE IMPORTANT?
In the United States, the most recognized certification for accounting professionals is the CPA. To hold a CPA license, an accountant must take and pass a series of rigorous tests. Additionally, certified public accountants are bound by a code of ethics. CPAs must provide their clients with good, sound, ethical advice. To maintain a CPA license, the holder must complete 120 hours of continuing education courses every three years. This ensures that CPAs stay abreast of the constantly changing laws and regulations.
In the United States, not all accountants hold a CPA license. You can be certain that those who do hold a CPA license have been thoroughly tested and trained, and are current in their knowledge of the law.
One very important distinction between non-licensed accountants and Certified Public Accountants is that in the case of an IRS audit, CPAs can represent you to the IRS. Working with a Certified Public Accountant may mean you do not even have to talk to the IRS!