Accounting is the study of how businesses track their income and assets over time. Accountants engage in a wide variety of activities besides preparing financial statements and recording business transactions including computing costs and efficiency gains from new technologies, participating in strategies for mergers and acquisitions, quality management, developing and using information systems to track financial performance, tax strategy, and health care benefits management. Accountants and auditors help to ensure that the Nation’s firms are run efficiently, its public records kept accurately, and its taxes paid properly and on time. They perform these vital functions by offering an increasingly wide array of business and accounting services, including public, management, and government accounting, as well as internal auditing, to their clients.
There are great career opportunities in accounting. The field of accounting offers stimulating and challenging work that is constantly evolving. Because accountants spend a lot of time looking under the hoods of businesses they really learn how business works. It’s no surprise that many successful players in business began their careers as accountants. It’s also no surprise that most Chief Financial Officers of large corporations have a background in accounting. An accountant is perfectly positioned to become a CFO because he or she probably has the best understanding of what drives business and profits in a company.
Employment of accountants and auditors is expected to grow rapidly for all occupations through the year 2014. An increase in the number of businesses, changing financial laws and regulations, and increased scrutiny of company finances will drive growth. In addition to openings resulting from growth, the need to replace accountants and auditors who retire or transfer to other occupations will produce numerous job openings in this large occupation.
As the economy grows, the number of business establishments will increase, requiring more accountants and auditors to set up books, prepare taxes, and provide management advice. As these businesses grow, the volume and complexity of information developed by accountants and auditors regarding costs, expenditures, and taxes will increase as well. An increased need for accountants and auditors will arise from changes in legislation related to taxes, financial reporting standards, business investments, mergers, and other financial events. The growth of international business also has led to more demand for accounting expertise and services related to international trade and accounting rules, as well as to international mergers and acquisitions. These trends should create more jobs for accountants and auditors.
An Accounting major provides tremendous opportunities. Accounting students may choose a specialized career path including, preparation for the Certified Managerial Accountant exam, Internal Auditor exam, or continued education, such as an MBA, which would also prepare them for the Certified Public Accountant exam.
Professional recognition through certification or licensure provides a distinct advantage in the job market.
To begin your career, you may start at a public accounting firm such as Ernst & Young or PriceWaterhouseCoopers. Most people do not make partner at public accounting firms but the experience and training can be excellent. From there, many move on to careers with an accounting focus in business or government.
According to a salary survey conducted by the National Association of Colleges and Employers, bachelor’s degree candidates in accounting received starting offers averaging $43,269 a year in 2005; master’s degree candidates in accounting were offered $46,251 initially.
According to a 2005 salary survey conducted by Robert Half International, a staffing services firm specializing in accounting and finance, accountants and auditors with up to 1 year of experience earned between $28,250 and $45,000 a year. Those with 1 to 3 years of experience earned between $33,000 and $52,000. Senior accountants and auditors earned between $40,750 and $69,750, managers between $48,000 and $90,000, and directors of accounting and auditing between $64,750 and $200,750. The variation in salaries reflects differences in size of firm, location, level of education, and professional credentials.
In the Federal Government, the starting annual salary for junior accountants and auditors was $24,677 in 2005. Candidates who had a superior academic record might start at $30,567, while applicants with a master’s degree or 2 years of professional experience usually began at $37,390. Beginning salaries were slightly higher in selected areas where the prevailing local pay level was higher. Accountants employed by the Federal Government in non-supervisory, supervisory, and managerial positions averaged $74,907 a year in 2005; auditors averaged $78,890.
Public Accountants work in partnerships which provide accounting services to individuals, businesses and governments. The largest, high-profile public accounting firms are known as the Bix Four and dominate the field of accounting. This field offers advancement potential to audit manager, tax manager or partner reached by only two to three percent of new hires.
Public accountants perform a broad range of accounting, auditing, tax, and consulting activities for their clients, which may be corporations, governments, nonprofit organizations, or individuals. For example, some public accountants concentrate on tax matters, such as advising companies about the tax advantages and disadvantages of certain business decisions and preparing individual income tax returns. Others offer advice in areas such as compensation or employee health care benefits, the design of accounting and data-processing systems, and the selection of controls to safeguard assets. Still others audit clients’ financial statements and inform investors and authorities that the statements have been correctly prepared and reported. Public accountants, many of whom are Certified Public Accountants (CPAs), generally have their own businesses or work for public accounting firms.
Some accountants specialize in forensic accounting—investigating and interpreting white-collar crimes such as securities fraud and embezzlement, bankruptcies and contract disputes, and other complex and possibly criminal financial transactions, including money laundering by organized criminals. Forensic accountants combine their knowledge of accounting and finance with law and investigative techniques in order to determine whether an activity is illegal. Many forensic accountants work closely with law enforcement personnel and lawyers during investigations and often appear as expert witnesses during trials.
Management accountants work in companies and participate in decisions about capital budgeting and line of business analysis. Major functions include cost analysis, analysis of new contracts and participation in efforts to control expenses efficiently. This work often involves the analysis of the structure of organizations. Is responsibility to spend money in a company at the right level of our organization? Are goals and objectives to control costs being communicated effectively?
Usually, management accountants are part of executive teams involved in strategic planning or the development of new products. They analyze and interpret the financial information that corporate executives need in order to make sound business decisions. They also prepare financial reports for other groups, including stockholders, creditors, regulatory agencies, and tax authorities. Within accounting departments, management accountants may work in various areas, including financial analysis, planning and budgeting, and cost accounting.
Government accountants may work at the local/state level or the federal level and administer and formulate budgets, track costs and analyze programs. This work can have high impact on the public good but can also get political and is subject to bureaucratic obstruction. Government accounting offers advancement in most organizations to controller and possibly to higher administrative positions. Places which hire heavily at the federal level include the Department of Defense, the General Accounting Office and the Internal Revenue Service.
Work in audit involves checking accounting ledgers and financial statements within corporations and government. This work is becoming increasingly computerized and can rely on sophisticated random sampling methods. Audit is the bread and butter work of accounting. This work can involve significant travel and allows you to really understand how money is being made in the company that you are analyzing. It’s great background!
Tax accountants prepare corporate and personal income tax statements and formulate tax strategies involving issues such as financial choice, how to best treat a merger or acquisition, deferral of taxes, when to expense items and the like. This work requires a thorough understanding of economics and the tax code. Increasingly, large corporations are looking for persons with both an accounting and a legal background in tax. A person, for example, with a JD and an CPA would be especially desirable to many firms.
Financial analysts and personal financial advisors provide analysis and guidance to businesses and individuals to help them with their investment decisions. Both types of specialist gather financial information, analyze it, and make recommendations to their clients. However, their job duties differ because of the type of investment information they provide and the clients they work for. Financial analysts assess the economic performance of companies and industries for firms and institutions with money to invest. Personal financial advisors generally assess the financial needs of individuals, providing them a wide range of options.
A time-honored form of employment is to become a CPA and hang out your own shingle. This form of work requires you to generate your own business, but has the benefits of offering close customer contact, a high degree of independence and, depending on how good you are, high financial rewards. This work can be risky but puts you in the midst of community affairs.
Budget analysts are responsible for developing and managing an organization’s financial plans. There are plentiful jobs in this area in government and private industry. Besides quantitative skills many budget analyst jobs require good people skills because of negotiations involved in the work.