Certified public accountants, or CPAs, first appeared in 1896 in New York. Since then, all 50 states and five non-state jurisdictions -- the District of Columbia, Puerto Rico, Guam, the U.S. Virgin Islands and the Northern Mariana Islands -- created state boards of accountancy to license and certify accountants. However, you need not be a CPA to prepare taxes or perform other bookkeeping tasks. The U.S. Bureau of Labor Statistics states that certification in a speciality improves job prospects for accountants. However, there are a number of differences.
To become an accountant, you usually complete a bachelor's degree in accounting or a similar field. After graduation, aspiring CPAs must complete a national exam and meet requirements set by the states, with 46 states requiring 30 hours of college coursework beyond a bachelor's degree. The American Institute of Certified Public Accountants gives the exam, the Uniform CPA Examination. Tax preparers take a less rigorous test: Registered Tax Return Preparer Competency Test. The 120 question test covers the 1040 series of forms, as well as professional ethics. It takes about one hour to complete.
Uniform CPA Examination
To become a CPA, you must pass the Uniform CPA Examination, a four-part test. You do not have to pass all four parts at once, but must pass all four parts within a set period, generally 18 months. The four parts are auditing, financial accounting and reporting, regulation, and business environment. These four parts are further broken down into sub-sections such as IT, business law, individual tax and finance.
The difference between a CPA's and a tax preparer's job is largely one of scope. A CPA can, theoretically, perform just about every type of accounting under the sun. He is licensed to submit reports to the Securities and Exchange Commission. As such, a CPA is a much sought-after commodity in the world of accounting. Tax preparers, on the other hand, might be trained in general bookkeeping, but perform only tax-related accounting when working as tax preparers. This includes calculating overpayments, underpayments, interest, penalties and other tax-related charges.
The BLS does not keep statistics for CPAs separate from other accountants. Tax preparers averaged $39,410 annually as of 2010. However, accountants averaged $61,690 annually as of 2010. The BLS also reports far more jobs as a general accountant than a tax preparer -- 1,216,900 in 2010 versus 59,180, respectively.
- U.S. Bureau of Labor Statistics: Accountants and Auditors
- U.S. Bureau of Labor Statistics: Occupational Employment and Wages; Tax Preparers
- MyPlan.com: Tax Preparers
- Internal Revenue Service: Like Share Print IRS Test Requirements for Becoming a Paid Tax Professional
- Accounting Institute Seminars: CPA Exam Dates & Structure
- H-Net.org: Profiling the New Industrial Professionals: The First CPAs of 1896-97
- Accounting Coach: CPA Requirements
- Comstock Images/Comstock/Getty Images