Certified Public Accountant vs. Auditor: What’s the Difference?
Accounting and auditing are important professional fields that play a fundamental role in business management and financial market regulation. There is often confusion between a regular accountant, a certified public accountant (CPA), and an auditor, with some people believing that they are the same or interchangeable. In fact, there are some key differences between a CPA and an auditor, which we will explore in this article.
What is a Certified Public Accountant?
A CPA is a person who has the qualifications and experience necessary to prepare, analyze, and interpret financial statements. It is important that this CPA be an independent person and not an employee of the same company. CPAs typically have a bachelor’s degree in accounting or a related field, as well as practical experience in accounting and auditing. They also have a license to practice accounting and auditing from the relevant authorities in the country where they practice their profession.
What is an Accountant?
An accountant is a person who has a bachelor’s degree in accounting or a related field of financial management. They perform daily tasks such as bookkeeping and do not necessarily have extensive experience. They may start as an accountant and eventually become a financial manager. They are usually employees within the same company that they are recording the accounts for.
What are the Duties of a CPA or Auditor?
The main duties of a regular accountant are to perform daily financial transactions and record them in the books until they reach the financial statements, whether monthly, quarterly, or annually.
A CPA or auditor has many tasks that they can perform based on their skills and experience. These tasks are summarized as follows:
- External accounting and auditing: A CPA audits the financial statements of a company or organization to determine their accuracy and compliance with the accounting standards applied in the country where they work. They usually have a lot of practical experience in the fields of accounting and auditing and are certified as a CPA. They then issue an opinion on the company’s financial statements.
- Bookkeeping: Some companies and accounting firms have a team to manage the financial operations of companies through a team specialized in financial and accounting activities. Some companies choose this option to get a skilled person with good practical experience at the lowest possible cost. The accounting firm records financial transactions through a qualified team.
- Internal auditing for companies: Some companies in Saudi Arabia, especially listed companies registered with the Capital Market Authority, need internal auditing activities on financial transactions to increase compliance with regulations and laws and prevent financial fraud.
- Financial and accounting consulting services: Through the extensive experience of auditing and accounting firms in Saudi Arabia, they can provide consulting and advisory services to companies in various financial fields.
- Tax and Zakat consulting services: Auditing firms and accountants provide tax and Zakat consulting services to companies to avoid future tax and Zakat problems.
- Training and development: Accounting firms train some of the company’s employees on the future developments in accounting and auditing standards.
Differences Between a CPA and an Auditor
Here are some of the key differences between an accountant and a CPA or auditor:
- Responsibilities: The company, through the company’s accountant, is responsible for preparing, analyzing, and interpreting financial statements, while the CPA or auditor is responsible for auditing the financial statements of a company or organization to determine their accuracy and compliance with accounting and legal standards.
- Skills: An accountant needs strong skills in accounting, financial analysis, and bookkeeping for daily transactions and operations, while a CPA or auditor needs strong skills in all accounting areas as well as data inspection and analysis.
- License: A CPA must obtain a license from a professional association or body, while an auditor does not need a license.
Conclusion
Accounting and auditing are important professional roles that play a fundamental role in business management and financial market regulation. While there are some similarities between an accountant and a CPA or auditor, there are also some key differences between the two roles, which should be well understood in order to benefit from the services provided by each.
Ibrahim Al-sulmi Company offers a comprehensive range of accounting and consulting services, including accounting, auditing, financial and tax consulting, and handling tax and zakat issues. The company has a distinguished team with high capabilities and practical experience in dealing with all types of cases.
