A Detailed Overview of Certified Public Accountant and Enrolled Agent
A time comes when a business needs to prepare and file taxes, balance its books, as well as prepare an annual financial statement, when this moment arises most business people especially newly established small and medium-sized businesses find it confusing on the professional they need to select to help them with these matters, a lot of businesspeople state that they have no idea of the actual difference between certified public accountant (CPA) and enrolled agent(EA). If you ask many business people even the small one you will notice CPA professionals are quite popular even if people cannot tell the difference in financial tasks between CPA and EAs, the reality is there are some areas in finance EAs can do a better job especially for small and medium businesses. It is important as a business person to know the differences between CPAs and EAs so that you can pick the one who can effectively solve your accounting issues, to help you get more insight into the two financial professionals we have detailed some of the main differences between the two so you can have strong knowledge about them to choose right in the future.
One of the differences between CPA and EA professionals is that CPA is a financial certified individual who deals with a variety of financial services such as business audit, bookkeeping, tax preparations among others, where EA is a licensed financial individual who specializes in tax-related matters, it is also important to recognize that CPAs are licensed by the state where EAs get their license from the federal government, but the thing is the two professions are authorized to assist businesses and individuals in tax-related issues.
It is also important to know that CPA and EA professionals differ in terms of their qualifications, to become a CPA one is required to have a BSc degree in finance or accounting to be allowed to take CPA exams and before one is issued with a CPA license after passing the exam one must work under qualified and reputable CPA professional for some time, however, to become EA one a degree is not necessary but one has to study and pass three-part exams namely, taxation, representation, and ethics before they are issued a license, EAs are also mandated by law to update their knowledge after every three years about tax matters to ensure they stay updated with current tax regulations that tax man keep changing.
The confusion normally arises when it comes to selecting between CPA or EA, in case you run a big business or a corporation it is mandatory to have the business audited, prepare annual financial reports which must be authenticated by independent CPA professional, similarly partnerships although not required by law can benefit from CPA who can help them with complex investments in preparing and maintaining the accounting books and other financial advice, EAs are good with taxation matters, if you are preparing to file your returns for your business or individual, EAs are the ideal to consult because they are always updated with the ever-changing tax laws and regulations. Those are some major comparisons between CPA and EAs professionals.