CPA vs LPA – 8 Differences You Must Know
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When it comes to the accounting profession in the US, there are two somewhat similar qualifications – Chartered Public Accountant (CPA) and Licensed Public Accountant (LPA). Both qualifications offer good career opportunities but differ in terms of recognition and career paths. This blog will take you through the differences between CPA and LPA.
What Is CPA?
The Certified Public Accountant is a globally renowned qualification in the field of accounting. The CPA is awarded by the American Institute of Certified Public Accountants (AICPA). CPAs are also trusted advisors to businesses and individuals alike. CPAs ensure financial accuracy and compliance, scrutinizing statements for any discrepancies. They also stay updated on tax laws, providing invaluable guidance for complex financial decisions and optimizing tax strategies.
- CPA course consists of 4 exams – Auditing and Attestation (AUD), Business Environment and Concepts (BEC), Financial Accounting and Reporting (FAR), and Regulation (REG).
- The salaries of CPAs is high in the US, India and other countries around the world.
- You need 150 credits to avail CPA license. CPAs can work as tax consultants, financial analysts, auditors, and in various other job roles.
What Is LPA?
LPA or Licensed Public Accountant is a designation given to accountants who were practising public accounting before their state introduced regulations. The designation of LPA allowed them to continue their work without the need for additional education, as their experience proved their qualification. The LPA designation was introduced primarily to grandfather in experienced accountants when states began regulating public accounting.
- LPA was more of an experience-based qualification as these professionals had been practising accounting even before the state regulations were introduced.
- Unlike CPAs, LPAs did not have to pass any exam, it was a course relying only on practical experience.
- LPAs can perform the same duties as CPAs
CPA vs LPA – 8 Differences
| Parameter | CPA | LPA |
| Scope of Work | CPAs can do audits and reviews of financial statements. | LPAs can only do compilations. |
| Recognition | The CPA is recognised in all 50 states of USA. | LPA is recognised only in 3 states. |
| Educational Qualifications | CPA requires a bachelor’s degree and 4 other exams to be cleared. | Only a graduation would suffice for LPA, its requires practical experience. |
| Job Roles | You can get wide range of roles in auditing, tax, finance, and corporate finance. | You can get roles in public accounting firms. |
| Course Duration | It takes 12-18 months to complete the course. | The duration varies by state, depending on specific requirements. |
| Regulatory body | Regulated by the American Institute of Certified Public Accountants (AICPA) and state boards of accountancy. | Regulated by the respective state board of accountancy wherever this qualification is accepted |
| Market Value | Recognised as gold standard in accounting | Lesser known qualification, only recognised in 3 states of the USA. |
FAQs
Can I practice accounting with an LPA in any state in the USA?
LPAs are typically restricted to practising within the state they are licensed in, whereas CPAs have more flexibility to practice in different states and countries.
Is the CPA exam difficult?
While the CPA exam is difficult, you can ace it with full-fledged preparation, referring to the right CPA study material and being thorough with the basics of accounting. Brownie points if you hold hands-on experience in accounting.
Dwij K
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