Accounting Degrees And Careers

About Accountants And Auditors

Accountants and auditors are business professionals who perform a wide range of financially related tasks. As a group, accountants and auditors record, report, and analyze financial information. There are four major branches of accounting and an accountants's job specifics vary depending on the branch:

1. Government accounting and auditing - Government accountants and auditors work in the public sector (federal, state, and local government). Depending on which branch of government they work in, they:
• Analyze and administer budgets
• Audit private companies and individuals who are subject to government regulation or taxation
• Ensure that government revenues are received and expenditures are made in accordance with applicable laws and regulations
• Examine financial institutions
• Maintain and examine the financial records of government agencies
2. Internal auditing - Internal auditors evaluate their company's internal controls, financial and information systems, and management procedures to ensure that financial records are accurate and that internal controls are adequate to identify fraud, mismanagement, and waste. They also evaluate the company's compliance with corporate policies and government regulations, as well evaluating company efficiency.
3. Management accounting - Management accountants may also be referred to as cost, managerial, industrial, corporate, or private accountants. Regardless of their title, management accountants responsibilities include:
• Analyzing and interpreting financial information to support sound business decisions by corporate management
• Managing assets
• Budgeting
• Cost management
• Preparing financial reports for groups such as creditors, regulatory authorities, stockholders, and tax authorities
• Recording and analyzing the financial information of the company for which they work
4. Public accounting - Public accountants provide services to corporations, governments, non-profit organizations and individuals. Public accountants are not employed by, and are independent of, the organizations for which they provide services. Services that a public accountant may provide include:
• Advising on compensation, employee health care benefits and other financial matters
• Advising on tax matters
• Auditing client financial statements and providing their opinion for investors and regulatory authorities of the accuracy and compliance of those statements with accounting standards
• Designing of accounting data-processing systems
• Forensic accounting-investigating and interpreting white-collar crimes
• Preparing income tax returns
• Selecting financial controls to safeguard assets

It should be noted that accountants that audit an organizations financial records may not also provide advice on human resources, technology, investment banking, or legal matters to the same company.

Accounting and Auditing Job Characteristics

Accountants and auditors work in office settings. While many work a "normal" work week of approximately 40 hours, many may work substantially more hours during "crunch times" such as:

• Tax season for tax accountants
• End of quarter or end of year for management accountants
• End of year for public accountants providing audit services

As of 2006, there were approximately 1.3 million accounting jobs in the United States according to the U.S. Department of Labor Bureau of Labor Statistics (USDL BLS). Of these, 21% were working for accounting, tax preparation, bookkeeping, and payroll services firms. 10% were self-employed.

The U.S. Department of Labor Bureau of Labor Statistics expects "strong growth" (18 percent between 2006 and 2016, which is "faster than average") in accounting jobs due to stricter accounting and auditing regulations such as Sarbanes-Oxley (SOX), as well as the potential implementation of new standards such as the International Financial Reporting Standards (IFRS). Accounting ranks as the 10th hottest job area in terms of growth through 2012 according to the USDL BLS.

Increasing focus on financial crimes (embezzlement, bribery, and securities fraud) will drive the demand for forensic accountants (forensic auditors or investigative auditors), accountants who specialize in auditing and investigation and provide analysis that is suitable for use in court proceedings.

Demand for accountants and auditors, combined with somewhat decreased supply of individuals going into the field after the institution of the 150 semester hour education requirement, helps accounting salaries to remain strong. In fact, according to a 2006 Hudson survey published on CFO.com, accounting and finance employees are more likely than the rest of the workforce to have received a raise in the last year (Job Satisfaction Higher in Finance. Stephen Taub. CFO.com. June 8, 2006). That same survey indicates that finance and accounting employees are also more satisfied with their jobs than other workers.

The top three attributes that hiring companies find most desirable when comparing accountants seeking a job are:

1. 41% - Internship
2. 33% - Software/ technology knowledge
3. 15% - Certification or advanced accounting degree

Source: Average Starting Salary for Accountants (PDF), Compiled by: The Florida Institute of Certified Public Accountants, 2008 from the 2008 Salary Guide: Accounting & Finance from Robert Half International.

Accounting Degree Programs, Certification, and Licensing

Accountants and auditors must have at least a bachelor's degree in accounting or a related field. Accountants who will be filing reports with the Securities and Exchange Commission (SEC) are required to be Certified Public Accountants (CPAs). Accreditded accounting degree programs are widely available at a large number of colleges and universities across the U.S.

Nearly all states (42) require that a CPA complete 150 semester hours of college coursework, which is 30 semester hours beyond the typical bachelor's degree. In addition, for all states CPAs must also pass the Uniform CPA Examination prepared by the American Institute of Certified Public Accountants (AICPA) and be licensed by their state board of accountancy. Continuing education for CPAs, referred to as continuing professional education (CPE), is also required by nearly all states.

The specific requirements to be licensed in a specific jurisdiction (state, territory etc.) vary. An individual who wishes to become a CPA in a specific jurisdiction should familiarize themselves with the specific requirements for that jurisdiction. The National Association of State Boards of Accountancy provides the Accountancy Licensing Library, which is an excellent resource for CPA licensing information.

There are also voluntary certifications for accountants, including:

• The Institute of Management Accountants (IMA) - Certified Management Accountant (CMA)
• The Institute of Internal Auditors (IIA) - Certified Internal Auditor (CIA), Certified in Control Self-Assessment (CCSA), Certified Government Auditing Professional (CGAP), and Certified Financial Services Auditor (CFSA)
• The ISACA (formerly the Information Systems Audit and Control Association) - Certified Information Systems Auditor (CISA)
• The Accreditation Council for Accountancy and Taxation (ACAT) - Accredited Business Accountant (ABA), Accredited Tax Advisor (ATA), Accredited Tax Preparer (ATP), and Elder Care Specialist (ECS) for accountants preparing their clients for retirement
• The Association of Certified Fraud Examiners (ACFE) - Certified Fraud Examiner (CFE)
• The Association of Government Accountants (AGA) - Certified Government Financial Manager (CGFM)
• The AICPA offers CPAs - Accredited in Business Valuation (ABV), Certified Information Technology Professional (CITP), and Personal Financial Specialist (PFS)

Resources for Accountants and Auditors

• Accounting Salaries, American Institute of Certified Public Accountants (AICPA)
• Average Starting Salary for Accountants (PDF), Compiled by: The Florida Institute of Certified Public Accountants, 2008.
• Federal Accounting Standards Advisory Board (FASAB)
• Governmental Accounting Standards Board
• International Accounting Standards Board (IASB)
• National Association of State Boards of Accountancy (NASBA)
• NASBAtools - Tools about accountancy licensing and CPE compliance from the National Association of State Boards of Accountancy (NASBA)
• Steps to Become a CPA, American Institute of Certified Public Accountants (AICPA)
• Uniform CPA Candidate Bulletin, American Institute of Certified Public Accountants (AICPA)

Major Employers of Accountants and Auditors

Most companies, as well as federal, state, and local government entities employ accountants and auditors. The largest employers of accountants and auditors as a percentage of total work force, however, are the public accounting firms. Following is a listing of the top 10 public accounting firms.

The "Big 4 Public" Accounting Firms:

1. PricewaterhouseCoopers (New York) - $25.2 billion (fiscal 2007), 146,000 employees
2. Deloitte (New York) - $23.1 billion (fiscal 2007), 150,000 employees
3. Ernst & Young (New York) - $21.1 billion (fiscal 2007), 130,000 employees
4. KPMG (Amsterdam, Netherlands) - $19.8 billion (fiscal 2007), 123,322 employees

The "Little Six" Public Account Firms

1. BDO International headquartered in Brussels, Belgium - BDO Seidman, LLP (Chicago)
2. Grant Thornton International (London) - Grant Thornton (Chicago)
3. McGladrey & Pullen LLP/RSM McGladrey (Bloomington, MN)
4. Baker Tilly International (London) - Baker Tilly USA
5. Horwath International (New York) - Crowe Chizek and Company LLC. (Indianapolis, IN)
6. Praxity (London) - Aronson & Company (Washington DC),BKD, LLP (Springfield, MO), Dixon Hughes PLLC (High Point, NC), Feeley & Driscoll, P.C. (Boston, MA), Kaufman, Rossin & Co., P.A. (Miami, FL), Mazars (New York), Moss Adams LLP (Seattle, WA), Plante & Moran, PLLC, and Weiser LLP (New York)

Source: World Accounting Intelligence

Accounting Terminology

10-K or Form 10-K - is an annual comprehensive report of a public company's performance that is required by the SEC. The 10-K contains audited financial statements for a public company.

10-Q or Form 10-Q - Similar to a 10-K but filed on a quarterly basis with the SEC. 10-Q's are generally less complete and not audited.

CPA - Certified Public Accountant is an individual who has met the educational requirements and passed the 4-part Uniform CPA Examination to become licensed as a CPA within a specific jurisdiction (state, territory, etc.).

CPE - Continuing Professional Education that is required of CPAs to maintain their status as a CPA.

GAAP - Generally Accepted Accounting Principles is the the standard framework of guidelines for financial accounting that is used mainly in the United States.

GAO - The Government Accountability Office is the audit, evaluation, and investigative arm of the U.S. Congress.

FASB - The Financial Accounting Standards Board's main purpose is to develop generally accepted accounting principles (GAAP) within the U.S.

IASB - The International Accounting Standards Board is the developer of the International Financial Reporting Standards (IFRS) accounting and financial reporting framework.

IFRS - International Financial Reporting Standards is the accounting and financial reporting framework used by most of the world.

PCAOB - Public Company Accounting Oversight Board was created by the Sarbanes-Oxley Act of 2002 to oversee the auditors of public companies.

SEC - The Securities and Exchange Commission is a U.S. government agency that is primarily responsible for enforcing federal securities laws.

SOX - The Sarbanes-Oxley Act of 2002 (Pub.L. 107-204, 116 Stat. 745, enacted 2002-07-30), which is also known as the Public Company Accounting Reform and Investor Protection Act of 2002, is a far-reaching set of reforms of U.S. business practices establishing new or enhanced standards for all U.S. public company boards, management, and public accounting firms.

Schools for Accountants And Auditors are listed in the column to the left.

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