An Accounting Overview
The accounting industry
has much to offer in terms of opportunities, professional development, and
exciting career paths. To be successful in an accounting position one must
possess strong analytical abilities, be detailed-oriented, and have the ability
to work very quickly and adeptly with numbers. Moreover, those who are the most
successful possess not only strong analytical abilities, but also the ability
to synthesize, interpret and develop applicable business strategies utilizing
financial data. Thus, a career in accounting offers its professionals the
opportunity to challenge themselves, work closely analyzing financial data and
provide significant value-add to corporations, governments and organizations
around the world.
This handout is
prepared with the direct assistance of “Vault Career Guide to Accounting,” and
various other sources. For more information about a career in accounting,
please refer to Kresge Database.
A career in accounting
can entail many different specific job functions ranging from an audit or
tax-consulting career with a public accounting firm, to an accounting position
with an industrial company, to a position with the Government Accounting Office
or a non-profit organization.
Types of Accounting:
As noted above,
accounting organizations provide a range of services. Traditionally, the two
primary services provided are audit and tax. However, many accounting firms
have grown their advisor services to offer: corporate finance, risk management,
transaction services, business process outsourcing, people and change
consulting, IT advising, and personal financial planning.
- Audit:
An auditor examines the financial statements of a company or organization and
independently certifies the statements are valid, accurate, and relevant.
Additionally, an auditor often also provides advisory services such as
recommending ways to improve profitability, etc.
- Tax: Accountants who
provide tax services primarily create strategies to minimize tax liabilities
for their clients. Additionally, they prepare tax returns, advise on tax laws,
assure clients tax law compliance, etc.
- Advisor:
The advisor role within public accounting serves to analyze key data issues,
patterns and trends to identify implications, and improve efficiency and
effectiveness for clients. The division of specialty that fall within the
advisor line of service differs among the firms.
Types of Accountants:
- Public Accountants: Public accountants
generally work for a public accounting firm (for example: Ernst & Young)
and provide accounting services to companies, governments, etc. Large public
accounting firms provide the range of services discussed above in “Types of
Accounting,” and because public companies are required to have yearly audits, a
large part of public accounting firms’ business is providing auditing services
to public companies.
- Private Accountants: Private accountants
work directly for a company, government or non-profit organization. They
receive their paycheck from the organization for which they are providing
accounting services (for example: Internal Accountant at Kraft Foods).
Generally, these accountants prepare the financial statements for the public
accountants to audit and certify. Additionally, private accountants may also
prepare their company’s tax statements, consult its management on changing
accounting principles and ensure the financial integrity of the company’s
business transactions.
Changes in the Field
While students’
interest in accounting related fields ebbs and flows depending on the economy,
a career in accounting has long been considered “recession proof” and offers
significant job security. In 2008, Forbes ranked Accounting Executive #4 and
Accounting Staff #5 in its list of “10 Most Recession Proof Jobs.”
Additionally, the U.S. Bureau of Labor Statistics ranked Accountants and
Auditors in the Top 20 Occupations with the most demand for 2006-2016.
Accountants are
especially in demand when the economy is in a downturn. This is because in
times of economic uncertainty the public becomes distrustful of current
accounting and reporting systems, leading to changes in regulation and
accounting practices. The collapse of companies such as Enron and Worldcom led
to the passage of the Sarbanes-Oxley Act of 2002. The SOX Act enhanced
accounting standards for corporations and those auditing corporations and
organizations—leading to increased demand for exceptional accountants. With the
inception of SOX, public accounting firms began to divest their consulting
services to more easily comply with the tighter regulatory scrutiny. However,
firms have recently begun to rapidly rebuild their consulting arms and expand
hiring to BBAs again. The recent financial crisis calls for even greater
accounting scrutiny and stronger accounting standards and offers those entering
the accounting field immense potential for an exciting, promising and
challenging career.
The median base
compensation for the Ross BBAs entering the accounting field in 2010 was $55,
000. At the Ross School of Business, the employers of the highest number of
BBAs have consistently included the “Big 4” public accounting firms—Deloitte,
Ernst & Young, KPMG, and PricewaterhouseCoopers, as well as mid-tier firms
such as BDO, The Rehman Group, and Plante & Moran. In addition to the audit
and tax positions available at the public accounting firms, several students
each year go to work for industrial employers as accountants and financial
analysts.
Masters in Accounting
In most states, only
licensed Certified Public Accountants (CPAs) may provide qualified public
opinions and audits on financial statements. In order to qualify for a CPA
license, one must fulfill the education and work experience requirements, and
pass the Uniform Certified Public Accountant Examination. Education requirements
vary b state, but in most states, 150 credit hours are required to sit for the
Certified Public Accounting Examination. Ross students most commonly meet this
requirement through a fifth year of education, such as the Masters of
Accounting program, at Ross or another institution.
Conclusion :
To be successful in accounting position we should
have strong analytical skills, be detail-oriented, and have the ability to work
very fast and nimble with numbers.
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