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A wide assortment of people gets confused between the CPA license and a CPA certificate. Both of them have different meanings. In addition to this, they confer various types of legal authority as well as responsibility.
The CPA certificate happens to be an acknowledgment. It indicates that the student has successfully passed the examination after filling the minimum requirements for taking it.
On the other hand, the CPA license is known to be issued after the completion of various requirements from the accountancy board for becoming the CPA.
After this, the state will provide you the permission for practicing public accounting. Here are a few crucial differences between CPA license and CPA certification:
Few aspects of the CPA certificate
For the completion of the CPA certification, you do not need any prior work experience. There is no requirement for continuing educational needs. In addition to this, the holder of CPA certification is not eligible for signing audit reports, tax returns, or using the title of CPA on any of the legal or official reports.
The CPA certificate holder cannot be a partner or owner of any public accounting firm.
Few states grant the permission for using the CPA designation on different unofficial documents after the name, such as resumes.
A small amount of fees is necessary for renewing the CPA certificate every year.
What is a CPA license?
The majority of the states need relevant experience of 1 to 2 years in accounting under CPA. The majority of the states need continuing education for forty years every year.
The person having a CPA license will be having the different legal rights of CPA, which is inclusive of signing the audit reports and tax returns. The person, owning a CPA license is eligible to own and run the CPA firm.
It is possible to make use of the title of CPA license in the official or public setting. You need a significant fee for renewing the license every year.
Difference between CPA license and CPA certificate
You need to keep in mind that every state accountancy board has its regulations and rules for becoming CPA.
While the majority of the requirements are common, each of them is found to be different in some shape, way, or form. In the past, the majority of the same used to possess the two-tiered certification process.
It indicates that after the candidate has accomplished the requirements for appearing in the CPA examination and you have passed it successfully, the certificate is issued to them.
It indicates that you have gained success in completing the first step towards becoming the CPA.
However, at times, the candidates require completing the work experience program, extra education requirements as well as ethics program for the fulfillment of the licensure requirements of the state.
However, they were capable of calling themselves CPA during the duration as they possess a certificate. Thus, it is possible to indicate on job applications and resume that they have passed the examination successfully and they are on the way to be licensed. After the completion of the remaining requirements, you are eligible for getting the license.
Now, you can practice CPA with every designation right. At present, the majority of the states bade a bye to the two-tiered system and they are not issuing the certification, just after the completion of the examination. They have moved to use the terminology for defining varied license level.
Various levels of CPA license: Inactive and non-reporting
Such a title appears to be a bit misleading as it is an indication that it is not possible to be fully licensed. However, the fact is that a student is either licensed or not. There is no possibility of anything in the middle. But, few states provide inactive or non-reporting licenses.
Apart from this, a bunch of states has got rid of the two-tier system and enabling the non-practicing CPA so that the full-blown license can be switched into the certificate.
In such a manner, you do not require paying a huge renewable fee and maintaining continuing education of forty years every year. However, they are allowed to call themselves a CPA for certain informal purposes.
A college accounting professor happens to be a perfect instance of this. He or she might be willing to maintain the credential as it provides more authority in the field. But, there are no obvious reasons for them to be licensed.
They do not require performing an audit or any other tax functions which are performed by CPAs. Hence, there is no requirement for them to become licensed.
The majority of the states enable such kind of downgraded license so that the certificate holders can renew the license at either time by the filling of the right paperwork and payment of the licensure fees.
It is considered to be another positive aspect of the accounting professor. If he or she is willing to get the CPA license once again, it is essential to sign up and make payment of the fees. The student does not need any additional qualification or testing for the same.
CPA license or CPA certification for the International Candidates
A plethora of international candidates has the notion that it is possible to procure the certification simply and using the same as the license. However, it is not the case.
A student is not CPA licensed just because he or she has been practicing CPA in any outer state of the United States. It is mandatory to be a licensed CPA, inactive, or active for calling yourself the CPA as well as performing the different functions of the certified public accountant.
To reap the full benefits of the career, it is essential for the individual to be a full-blown licensed CPA. Thus, you will gain all the respect and opportunities in the specific field. The primary aspect of pursing the specific career goal is appearing for the CPA examination.
You need to opt for certain training courses in this regard. Hock International is one of the leading training institutes which stand second to none in providing the course training materials for CPA.