When the time comes to advance your career as an accountant, you will find options are available. Knowing which accounting certification will be of most benefit to you is of great importance, as the right choice will not only help you get promoted, it will likely increase your salary and open up more job opportunities. For this reason, men and women often ask whether they should become a CPA or EA. Knowing the similarities and differences between the two will help make the choice easier.
Certified Public Accountant Accounting Certification
Certified public accountants are regulated at a state level. To become a CPA, you must complete 150 undergraduate hours as well as pass the AICPA-administered four-part CPA exam. The sections covered in this test are auditing and attestation, business environment and concepts, financial accounting, and reporting and regulation. Fortunately, CPA Exam Study Materials are available to help candidates prepare for this test. As this type of accounting certification is administered at the state level, a certified public accountant may only practice within that state. Nevertheless, reciprocity may be granted in certain situations, and certified public accountants are permitted to represent a client before the Internal Revenue Service.
In contrast, enrolled agents are tax practitioners who have obtained a federal license. This license allows you to represent taxpayers before the Internal Revenue Service. To obtain this certification, you must work for the IRS for five years in a position that requires interpretation and application of the tax code on a regular basis or successfully pass a three-part exam. This exam covers individuals, businesses and representation, practice, and procedure. Furthermore, an EA applicant must pass an IRS background check which examines his or her personal tax history.
The Similarities and Differences
Enrolled agents only handle tax issues. As a result, these men and women often work with a CPA or at a tax preparation company. On the other hand, CPAs work in a variety of environments and may take on many duties as part of their job description. This may influence which certification you choose to pursue.
CPAs typically spend eight or nine years before this certification is obtained. This is due to the credit courses required to sit for the exam. Furthermore, some states additionally require the candidate to work under the direct supervision of a certified public accountant for a specific number of hours before taking the exam. Finally, the CPA exam is extremely difficult to pass and the candidate must do so within 18 months or miss the opportunity. This adds to the time needed to obtain this certification.
Becoming an enrolled agent takes significantly less time. The exam is the only requirement before applying for licensure. In fact, some individuals find they don’t even need to take the exam if they have an established record in tax preparation and analysis. Keep this in mind as the choice is being made.
CPAs do make more than enrolled agents over the life of their career. This is due to the expanded job opportunities open to those who become certified as a public accountant. However, an enrolled agent makes more when first starting out in this job, so one must look at earnings over a lifetime as opposed to a snapshot of one or two years.
Consider both options to determine which is right for you. It largely depends on your career goals and what you enjoy doing on a daily basis. If you love taxes, becoming an enrolled agent is often enough. For those who want variety, however, the CPA option is best.