DEFINITION of 'Accountant'

An accountant is a professional person who performs accounting functions such as audits or financial statement analysis. Accountants can either be employed with an accounting firm, a large company with an internal accounting department, or can set up an individual practice. Accountants are given certifications by national professional associations, after meeting state-specific requirements, although non-qualified persons can still work under other accountants, or independently.

BREAKING DOWN 'Accountant'

Accountants must abide by the ethical standards and guiding principals of the region where they practice such as IFRS or GAAP. The most common accounting designations are Chartered Accountants (CA), Certified Management Accountants (CMA), and Certified General Accountants (CGA). Other Designations include Certified Internal Auditor (CIA), Public Accountant (PA), and Certified Public Accountant (CPA). A Certified Internal Auditor doesn't have to receive any license in order to practice, and neither do Certified Management Accountants.  

Accountants can have more than one designation and may preform multiple types of accounting duties. The type of educational background and designation that an individual has will determine their professional duties. Accountants have bachelor’s degrees, and they have to get a certificate which can take up to a year to obtain depending on the type of certification being pursued and in which state.

In the U.S., requirements for accountants can acquire these certificates and licenses vary from state to state. The one requirement that is uniform in every state is the passing of the Uniform Certified Public Accountant Examination, an exam that is written and graded by the national organization the American Institute of Certified Public Accountants.

Legal Requirements

Certified public accounts have a legal responsibility to their clients to be honest and to avoid negligence in their duties. CPA’s have real influence over their clients, and their judgments and work can affect not just an individual, but an entire company, their employees, board, and investors. Accountants can be liable for paying uninsured losses to creditors and investors in the case of a misstatement, negligence, or fraud. Accountants have two different types of liability: common law and statutory law. Common law liability includes negligence, fraud, and breach of contract, while statutory law includes any state or federal securities laws. 


The first professional association for accountants, the American Association of Public Accountants, was formed in 1887, and CPA’s were first licensed in 1896 when cost accounting, and accounting in general became of real importance. It grew as a profession during the industrial revolution as businesses grew and shareholders and bondholders who weren’t necessarily a part of the company but were monetarily invested wanted to know more about its financial wellbeing. 

After the start of the Great Depression and the formation of the Securities and Exchange Commission (SEC), the agency required all publicly traded companies to issue reports written by accredited accountants. Since the turn of the 19th century and the reforms put in place the Great Depression, accountants are a ubiquitous and large part of any business. 

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