When it comes to managing finances—whether for a small business, a growing company, or personal needs—many people find themselves confused by the roles of financial professionals. Terms like CPA, bookkeeper, and accountant are often used interchangeably, but each plays a distinct and important role in the financial health of an individual or organization. Understanding the differences between these professionals can help you choose the right expert for your specific financial needs, ensure compliance with tax laws, and support better financial decision-making. In this article, we’ll break down the unique responsibilities, qualifications, and services provided by CPAs, bookkeepers, and accountants to help clarify who does what—and when you might need each one.
Bookkeeper: Anyone can be a bookkeeper, there is no educational, training or experience requirement. The range of experience can be a new individual or have years of experience. They typically specialize in the basic, day to day accounting transactions, data entry and journal entries.
Accountant: Typically, an accountant will have a degree in accounting, whether it’s an associate, bachelor’s or master’s degree. They have received formal education and will usually have more varied and detailed knowledge base than a bookkeeper. Of course, this will vary based upon their experience level.
Certified Public Account or CPA: To be a CPA, an individual must meet educational, knowledge and experience requirements, including passing the CPA exam. Other requirements include passing a background check (state and federal), passing a professional ethics exam, and just as importantly, CPAs are required to take continuing professional education every year in order to renew their license and keep their accreditation, on an annual basis. This assures that every CPA in good standing stays current of the ever-changing tax laws, IRS tax code, and the Financial Accounting Standards Board pronouncements of changes and updates to Generally Accepted Accounting Standards detailed by GAAP.
Every CPA (based in the U.S.) is required to adhere to GAAP when preparing certified financial statements, which is required by certain regulatory agencies such as the Securities and Exchange Commission (SEC) and is typically required by business organizations where you are required to submit periodic financial statements, such as Financial Lenders, Commercial Banks and Investors. Adherence to GAAP assures that all certified financial statements are following the same rules and regulations and are adequately stated. Also of note, the Internal Revenue Service (IRS) has strict requirements for tax preparers, who are subject to significant fines if they do not adhere to competency and ethical standards. Did you know, for example, that a tax preparer must sign your tax return if they accept compensation for preparation of the return? This makes the tax preparer responsible for the competency, accuracy and completeness of your return. Note: This does not always mean that the taxpayer is not responsible for omissions or intent to defraud the IRS, as well as assessment of penalties and interest.
Lastly, every CPA must continually adhere to their State Board of Accountancy’s ethical statutes, as well take an ethics course and pass an exam, every two to three years, depending on their state’s requirements. This assures that CPAs in good standing are aware of their ethical responsibilities to the public, consisting of Integrity, Objectivity, Professional competence and due care, Confidentiality, and Professional behavior.
If you have concerns about your CPA, you may request proof of their license (State Boards issue an annual card noting the CPA’s annual license expiration date). If you need to report a CPA who practices in Texas for being unprofessional, professional misconduct or you believe has violated the code of conduct, you can report the office or your complaint to the Texas State Board of Public Accountancy.
In the world of financial management, it’s crucial to understand the distinct roles of a bookkeeper, accountant, and CPA. Bookkeepers handle the day-to-day recording of transactions, ensuring that financial data is accurate and up to date. Accountants take that data a step further by analyzing, interpreting, and preparing financial statements to support decision-making. CPAs, or Certified Public Accountants, offer the highest level of financial expertise, often providing audit services, tax planning, and strategic financial advice backed by rigorous education, licensing, and continuing education requirements.
By recognizing these differences, businesses and individuals can make informed decisions about which financial professional to engage based on their specific needs. Whether it’s basic recordkeeping, in-depth financial analysis, or certified tax representation, choosing the right expert can make a significant impact on financial success and compliance.
For more information, please contact Askew CPA Consulting Firm https://askewcpaservices.com
The Public Accountancy Act, Chapter 901 of the Occupations Code, authorizes the Texas State Board of Public Accountancy (TSBPA) to investigate and prosecute allegations of professional misconduct against Certified Public Accountants from any source, including the public and other CPAs. You may visit the TSBPA to learn more or may file a complaint by clicking on the following link or visiting the following website: https://www.tsbpa.texas.gov/enforcement/filing-complaint. Or if you have any further questions, please feel free to contact the Enforcement Division:
Enforcement Division
Texas State Board of Public Accountancy
505 E. Huntland Drive, Suite 380
Austin, Texas 78752-3757
Phone: 512-305-7866
Facsimile: 512-305-7854
