A common question among CPA candidates is what is the difference between a CPA certificate vs license. Although the terms are sometimes confused, a certificate and license mean quite different things and implicate very different levels of responsibility and authority.
A CPA certificate is granted to a CPA candidate after they write and pass the CPA exam. Basically, the CPA certificate means that the candidate has passed the exam and fulfilled the minimum requirements to qualify. It is a piece of paper that tells you (and prospective employers) that you are on your way to becoming a CPA.
This does not mean, however, that a CPA certificate holder can actually practice as a CPA. In order to practice public accounting, one needs to have earned their CPA license. The license is only issued once all of the requirements are complete, including work experience and sometimes an ethics exam.
Where the Distinction Matters
The distinction between CPA certificate and CPA license is only relevant in states that have a two-tier certification process. In recent years, this has become less popular, with most states choosing to skip the ‘certification’ step in favour of a one-tier system.
In one-tier states, you may receive a congratulatory letter when you pass your exam, but you will not receive a certificate. At the end of the day, the letter and the certificate hold the same weight, and neither will let you practice as a CPA.
According to NASBA, only seven jurisdictions in the US remain two-tier states:
|CPA Certificate||CPA License|
|No work experience needed||Most states expect at least 1-2 years of relevant work experience|
|No CPE requirements||Most states require at least 40 hours of CPE per annum in order to maintain your license|
|Cannot sign tax returns, audit reports, or use the ‘CPA’ title on any official documents||You have full legal rights of a CPA|
|Some states will allow you to use the title ‘CPA’ on unofficial documents (eg: your CV)||You can use the ‘CPA’ title on any official documents or in any public setting|
|Cannot be the owner or partner of a public accounting firm||You are allowed to own a CPA firm|
|Requires a small fee to renew each year||Requires a significant fee to renew each year|