In most jurisdictions across the globe, you do not have to have an accounting designation or license to call yourself an accountant. Most unlicensed accountants will tell you that there is no difference between them and a licensed accountant. That is not accurate.
In most countries, the recognized accounting designation is CPA. In Canada, this stands for “Chartered Professional Accountant.” Other countries use “Certified Professional Accountant” but it indicates the same thing. In general, the designation will be called a CPA.
So what? Well, there are a few requirements that come with being a CPA that unlicensed counterparts are not subject to.
First, CPAs are required to partake in continuing professional development. This is a minimum number of hours each year that need to be dedicated to keeping their knowledge of tax, financial reporting, regulatory, compliance, and ethics developments in the accounting world. Unlicensed counterparts do not have such a requirement.
Second, holding a CPA designation in Canada has a combination of education requirements, examinations, and practical experience. There is a standard that must be met in order to hold a CPA designation. This is not the case for unlicensed counterparts; with virtually no training or experience, anyone can claim to be an unlicensed accountant.
Third, a CPA is required to have professional liability insurance, which protects both the CPA and the client. This is because a CPA is considered an expert in their practice and has a duty to provide quality services to the public. Unlicensed counterparts do not have this requirement, which exposes the client to risk in the event an error is made.
Lastly, CPAs are regulated by Provincial bodies and are bound to a code of conduct. If a CPA does consistently crappy work, rips off clients, engages in negligence, deceives the public, or lacks integrity, the Provincial body will take away their license. With the average CPA salary in Canada being $62,000 per year, you can be assured they will follow codes of conduct to protect their livelihoods.
With all this being said, there are unlicensed accountants out there that perform quality work. There are some that will proactively engage in professional development, obtain professional liability insurance, and operate with quality and integrity. However, if you choose to pick an unlicensed accountant, it is important that you vet these aspects to ensure you are protected and receiving quality services.