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. The questions many business people are asking are what is the disparity between the two financial professionals, and where does this difference come from? Who is better suited to help with my financial issues? To help you respond to these answers we have detailed comparisons between the two financial agents that will help you select the right one next time.
The primary difference between CPA and EA professionals is in the financial roles they play, CPA is authorized by law to help businesses and people with diverse financial related matters such as, preparing annual financial statements, bookkeeping, taxes among other accounting stuff, however, EAs are licensed professionals who specialize in taxation, therefore, EAs are limited to tax-related matters, also important to point out is that CPA professionals are state-licensed while EAs are licensed by the federal government, regardless both professionals are authorized to provide taxation services to businesses and individuals.
The other difference between CPA and EA professionals occurs in the qualification process, to become a CPA you are required to have a B.Sc. degree in accounting or finance s that you can be allowed to take a CPA certification exam, and once you pass you are required by law to work with a qualified and reputable CPA professional for a given period, but to become an EA a BSC degree is not compulsory but one need to pass a three-part examination namely taxation, representation and ethics to demonstrate their mastery of necessary knowledge in the field of taxation, additionally, EA professionals are required by law to renew their education after every three years to keep their license active.
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 of the major differences between CPA and EA professionals.