Accounting is known as the language of business, and as long as there is business there will be a need for accountants. While the main function of an accountant could be defined as recording and reporting on a business’s transactions, in practice the field of accounting is separated into various different areas of specialization. And while accounting is considered an administrative, office-type career, the different fields of specialization can result in quite different working conditions, career prospects, and levels of remuneration.
Public or Private Accounting
One of the first broad distinctions made in the direction that a career in accounting can take is whether you work as a public accountant or as an accountant in private industry or government. A public accountant generally offers services to clients, and charges a fee for those services, much the same way as an attorney or other professional. As a public accountant you may work independently in your own practice, in a partnership, or as a member of a firm of public accountants. Services are generally provided in the areas of tax preparation and consulting, auditing, and management advisory services. Public accountants can also provide bookkeeping and write-up services, assist with regulatory and other reporting, and basically provide any type of services related to finance and business.
If you have your own public accounting practice, you will be your own boss, and can set your own schedule, conditions, and terms. At the same time, you will have the final responsibility for your practice, for the advice and service you provide your clients, and for the ultimate success of your practice. In a partnership, you would share the decision-making, responsibility, and profits with your partners. And, as a member of a larger accounting firm, you may start as an employee, working for a salary and taking directions from a supervisor. But you will also have the opportunity to gain valuable training and experience. As you progress in the firm, you may move up to higher positions with more responsibility and a higher level of compensation, and may eventually be offered the opportunity to become a partner in the firm. This may involve a capital contribution, and will definitely involve a personal commitment on your part, but will also provide you with participation in decision-making and a share of the firm’s success in monetary terms as well as in terms of professional recognition.
Private accountants generally work as members of an accounting, finance, or administration team, with defined duties and responsibilities, reporting to a direct supervisor and earning a salary. The range of accounting positions available and the degree of specialization in a certain area of accounting will depend on the size and nature of the organization, and the type of business. But as the language of business, the basic principles and practices of accounting are basically the same for all businesses, both large and small, in all types of industries. An accountant working for a smaller company may have more exposure to all aspects of accounting, simply because the accounting department is smaller, while an accountant working for a large corporation may specialize in a certain area of accounting.
How Is The Working Environment?
An accountant, either public or private, works with information – namely financial information, generally in an office environment. Both public and private accountants work on their own to a large extent, and personal initiative and self-direction are important qualities to possess. Teamwork is also important, in working with fellow accountants as part of team providing a specific public service, as well as with members of the accounting department in a private company.
The level of contact with other people depends to a large extent on whether you work in public or private accounting, and the position you hold. For example, a public accountant will by definition have direct contact with clients, possibly in a broad range of positions and types of businesses, and perhaps in different industries, while a private accountant will have contact with members of other departments within the same company, at different levels of the organization, and with outside parties, depending on the accountant’s function and duties, including customers, suppliers, and officials from government regulatory agencies.
Normal working hours will also depend to a large extent on whether you work in public or private accounting, and on your position. Auditors in public accounting have a heavy workload during certain periods of the year, such as from the end of the accounting year until the date the financial statements and reports are issued. And tax accountants will obviously be much busier during the tax season than at other times of the year. In private industry, accountants responsible for closing the books will have a heavy workload after the end of each month. Budget accountants may have a heavier workload during the annual budgeting period. But in general terms, accountants normally work a regular office-type schedule.
What Are The Requirements?
Accountants are generally required to have a college or university degree, normally in business administration, accounting or finance. Many accountants start their careers as bookkeepers, accounting clerks, accounts receivable or payable clerks, inventory clerks, or in other related administrative capacities, and then complete their education to become professional accountants.
Generally, a college or university accounting curriculum will include courses in basic or general bookkeeping and accounting, intermediate and advanced accounting, cost accounting, tax accounting, auditing, finance, and business administration or management. Advanced mathematics courses are generally not required for an accounting degree. Accounting is a profession that involves the systematic and methodical application of accounting principles and practices, in an organized and structured manner. A thorough knowledge of these principles and practices, and the ability to apply them in practical business situations are needed to be successful as an accountant. While a talent for mathematics can be helpful, a high level of mathematical expertise is not necessary. And, since accountants work with information, the ability to use information systems, such as computer software, is needed. But while an accountant may take some programming courses, generally systems knowledge as a user is what an accountant needs.
Communications ability, as in so many fields, is also very important for accountants. Accountants need to be able to communicate effectively with people at various different levels in an organization, and in various functions. This communications ability includes both verbal and written communication skills. Along with the ability to effectively express and explain results, findings, and to give instructions and advice, accountants need a well-developed level of comprehension, in order to understand the terms and conditions of business transactions, contracts, financial reports and explanatory notes, as well as a working knowledge of commercial and tax law. Depending on the accountant’s field of specialization, this level of comprehension will be focused on a certain area.
Qualities and Characteristics
Accountants need to be able to understand, analyze, and summarize information, adhering to standards of objectivity, completeness, and fairness. They need to be organized and orderly, thorough and detail-oriented, methodical and focused in their approach.
Accountants need to be able to understand and interpret data in a clear and objective manner. Analytical ability is therefore very helpful for accountants – the capacity to see what a transaction means in terms of its effects on the business, and to be able to clearly express that effect in terms of an accounting entry.
Accountants work with information that is confidential and that has economic consequences. They must maintain high ethical standards, with a well-developed sense of integrity, independence, and objectivity. Accountants have a fiduciary responsibility that extends beyond a directing supervisor-subordinate type of working relationship, and are responsible for the ultimate results of their work.
Many accountants, both public and private, go on to pursue their license as a Certified Public Accountant (CPA). This is a professional license granted by each jurisdiction in the United States after passing a uniform national examination and completing the applicable jurisdiction’s (state’s) experience and education requirements. A CPA license is generally considered the standard for practicing public accounting in the U.S. and enables an accountant to offer public accounting services as a qualified professional.
Obtaining a CPA license is not required for working in private accounting, but many employers establish the CPA license as a qualifying criteria in their hiring parameters for accountants.
The CPA exam consists of four sections:
1. Auditing and Attestation (AUD), covering auditing procedures, generally accepted auditing standards, and other standards related to attest engagements.
2. Business Environment and Concepts (BEC), covering the knowledge candidates need in order to understand the underlying business reasons for and the accounting implications of business transactions.
3. Financial Accounting and Reporting (FAR), covering generally accepted accounting principles for business enterprises, not-for-profit organizations, and governmental entities.
4. Regulation (REG), covering federal taxation, ethics, professional and legal responsibilities, and business law.
The CPA license requirements of a particular jurisdiction can be found on its Board of Accountancy website. Links to these Boards of Accountancy can be found at www.nasba.org.
Continuing Professional Education
In order to maintain professional status as a licensed CPA, an accountant must meet the continuing professional education requirements of the jurisdiction. The intent of these requirements is to keep CPAs up-to-date on changes in accounting and auditing principles, practices and standards, changes in tax and business law, and developments within the profession. Courses are designated as qualifying courses for purposes of meeting the continuing professional education requirements, and are generally assigned a certain number of credit hours toward meeting the total number of credit hours required each year.
A Master’s Degree in Business Administration (MBA) is generally not required for working as an accountant, although it can be considered a valuable qualification for both public and private accounting. A person who receives a bachelor’s degree in Business Administration – Accounting may wish to pursue an MBA, specializing in finance, marketing, or any of a number of other areas, in order to pursue a career with an accounting background, but working in another area of business.
A master’s degree or doctorate (PhD) in accounting is generally not required for either public or private accountants, but may be considered an important qualification for entering a career in education, as a professor of accounting, for example.
What Possibilities Does A Career in Accounting Offer?
There are many different career possibilities as an accountant. If you decide to go into public accounting, you can set up your own practice and offer your services as a general practitioner of accounting or as a specialist in a certain area. Or you can enter a larger accounting firm and work as an auditor, tax professional, or in management consulting or another field. As a private accountant, the opportunities are as varied as there are types of businesses and industries.
Advances in technology may reduce the number of jobs that have traditionally been considered more clerical in nature, but there is a constant demand for professional accountants, and the demand is increasing as a result of economic growth in general and the needs and requirements for reporting and scrutiny of publicly-owned companies. And a strong background in accounting, as the language of business, can always be useful in any career in business, or in starting up and operating your own business.