Los Angeles is regarded as having the largest economy in the U.S. It is also the third-largest metropolitan economy. This means there are a lot of businesses contributing to the financial growth of the city.

The main income source comes from the service sector. With so many businesses around, Los Angeles corporate income tax CPA services are in high demand. These professionals provide several financial services to their clients.

In some cases, a business can do without hiring one depending on its needs. In such cases, you can make do with an accountant. However, there are things that a regular accountant cannot and is not licensed to do. Such tasks can only be handled by a CPA.

Now you might be wondering, how do I know when to use a CPA or just stick with an accountant? Maybe you don’t even know what a CPA is, don’t worry, we’re here to help. In this article, we’ll reveal things that a Los Angeles CPA can do that an accountant cannot to help you determine which of these financial professional services you need. But before we go into that, let’s start with the basics.

Who is an Accountant?

To get an understanding of the differences between these professionals in focus, we need to first understand their basic functions. For-profit organizations and even NGOs need an accountant irrespective of their size. This is because these individuals are trained to record and check financial transactions, as well as provide a detailed report when needed.

Although the basics of their job involve taking account of the inflow and outflow of cash, the full scope of accounting is broader. These professionals (and CPAs) ensure that the owner of the business knows exactly how well the company is performing finance-wise. For a small business, an accountant should be able to handle all your financial accounts. However, as your business begins to expand or you already run a large private business or public company, you need a CPA.

Who is a CPA?

So far, we’ve been mentioning “CPA,” but what does it mean? A CPA is a Certified Public Accountant. You can visit https://www.franklin.edu/ to learn the difference between private and public accounting. Woah, woah, woah, hold it right there; are we trying to tell you that they are just accountants?

The answer is yes and no. You see, although all CPAs are accountants, not all accountants are CPAs. Confusing? Let’s explain some more…

Certified Public Accountants are designated or certified (hence the name) with a license that allows them to perform certain tasks that a non-CPA can’t undertake. There are requirements specific to each state that an individual must meet before becoming a CPA. This means a Los Angeles-certified public accountant must meet the requirements set by the state of California.

Moreover, they must pass the CPA exam. This exam is set by the American Institute of Certified Public Accountants. Another requirement is that the individual must have and display a deep knowledge and understanding of public accounting.

Once they meet all these requirements, they get licensed. This career path requires upholding the strictest standards of professional excellence and ethics. As such, CPAs are held to higher standards compared to unlicensed accountants. Failure to adhere to these standards can lead to the permanent loss of the license and legal action against the professional.

What Can a Los Angeles CPA Do That an Accountant Cannot?

The basic idea is that certified public accountants can do all that an unlicensed accountant can do and much more. In other words, they can handle your company’s tax returns, payroll, and books, which a regular accountant does. You can read this post to learn the signs that indicate that your tax preparer may be a fraud. Apart from these responsibilities, they can represent your company or you as an individual before the IRS, which is a service you can’t get from unlicensed accountants.

Furthermore, their high level of expertise and professionalism allow them to handle audited financial statements. Although a regular accountant can manage and report financial transactions, there are higher stakes when a CPA is involved. Their license allows them to legally attest to the financial statements of a company. This higher level of responsibility is not within the scope of regular accountants.

Conclusion

CPAs are the only professionals licensed to conduct independent financial statement audits. Because of the requirements of public companies to publish these statements, the demand for these professionals won’t be reducing any time soon. Besides, financial analysis and reports prepared by these experts create a higher level of trust with stakeholders since they believe the reports to be well-prepared.

While CPAs are still accountants, they offer much more value. In the article above, we’ve been able to discuss the differences between these two financial professional groups and what the CPAs can do that their non-licensed counterparts can’t. We also touched on situations that determine which of them your company should work with.

Veeramachineni Lalitha

I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin