People use “accountant” to mean almost anyone who works with numbers. When you’re hiring, the differences matter. They affect what the person is allowed to do, what they know, and what you’ll pay.
At a glance
| Role | Licensed by | Typical work | Can represent you before the IRS? |
|---|---|---|---|
| Bookkeeper | Usually not licensed (optional certifications exist) | Recording transactions, reconciling accounts, invoicing, basic payroll | No |
| Accountant (no license) | Not licensed as such | Financial statements, management accounts, some tax preparation | Limited, and only in some cases |
| CPA | State board of accountancy | Tax, audit, financial statements, advisory | Yes, on any matter |
| Enrolled Agent (EA) | The IRS | Tax preparation, tax planning, IRS problems | Yes, on any tax matter |
Bookkeepers
A bookkeeper keeps your financial records accurate and up to date. That usually means entering or categorizing transactions, reconciling bank and card accounts, sending invoices, chasing unpaid bills and sometimes running payroll.
Good bookkeeping is the foundation everything else rests on. If your books are a mess, your accountant spends expensive hours cleaning them up. Many small businesses use a bookkeeper monthly and an accountant or CPA once or twice a year. Read more in bookkeeping vs accounting.
Bookkeepers generally aren’t required to be licensed. Certifications from bodies such as the AIPB or NACPB in the US, or AAT and ICB in the UK, show training and commitment.
Accountants
An accountant analyzes and reports on financial information. They prepare financial statements, produce management reports, help with budgets and forecasts, and often prepare tax returns.
In the US, “accountant” on its own isn’t a protected title, so someone can hold an accounting degree and work as an accountant without a CPA license. Many are very capable. What they can’t do is sign an audit opinion or represent you before the IRS on every kind of matter.
Certified Public Accountants (CPAs)
A CPA has met their state’s education requirements (usually 150 semester hours), passed the Uniform CPA Examination, completed supervised experience, and holds a license from a state board. They must complete continuing education to keep it.
Only licensed CPAs and CPA firms can perform audits and issue certain reports on financial statements. CPAs also have unlimited rights to represent taxpayers before the IRS.
Hire a CPA when: you need audited or reviewed financial statements, your business is growing and needs strategic advice, your tax situation is complex, or a lender or investor asks for CPA-prepared figures.
Enrolled Agents (EAs)
An Enrolled Agent is a tax specialist licensed directly by the IRS. To become one, a person either passes a three-part IRS exam covering individual tax, business tax and representation, or qualifies through relevant IRS work experience. EAs must complete continuing education every three years.
EAs have the same unlimited representation rights before the IRS as CPAs and attorneys. Because they focus only on tax, they are often a very good choice for individual and small-business tax returns, back taxes, audits, payment plans and penalty problems. Our guide on what an enrolled agent does goes further.
What about tax preparers?
Anyone paid to prepare US federal returns must have a Preparer Tax Identification Number (PTIN). A PTIN alone is not a qualification. Unenrolled preparers have only limited rights to represent clients, and only for returns they prepared.
UK and international equivalents
- United Kingdom: “Chartered accountant” means membership of ICAEW, ICAS or Chartered Accountants Ireland. ACCA members are “chartered certified accountants” and CIMA members are “chartered management accountants”. AAT covers accounting technicians. CIOT (Chartered Tax Adviser) and ATT are the specialist tax qualifications. Only registered auditors can carry out statutory audits.
- Canada: the CPA designation is administered by CPA Canada and the provincial bodies.
- Australia and New Zealand: CA ANZ, CPA Australia and the IPA. In Australia, anyone charging for tax return preparation must be a registered tax agent.
- Ireland: Chartered Accountants Ireland, ACCA, CPA Ireland and the Irish Tax Institute.
Which one should you hire?
| If you need… | Start with |
|---|---|
| Monthly books kept up to date | A bookkeeper |
| A straightforward personal tax return | An EA, CPA or qualified tax preparer |
| Help with an IRS letter, audit or back taxes | An EA or CPA |
| Business tax planning and entity choice | A CPA or EA with small-business experience |
| Audited or reviewed financial statements | A CPA firm |
| Fraud investigation or a litigation expert | A forensic accountant |
On My Accounting Hub every listing shows the professional’s regulatory body, so you can see at a glance whether you’re looking at a CPA, a chartered accountant, a tax adviser or a bookkeeper.
This guide is general information, not tax, legal or financial advice. Rules and thresholds change and depend on where you live - speak to a qualified professional about your own situation.