Accountants are often stereotyped as little more than math geeks, sitting in dark cubicles tabulating endless, mind-numbing streams of numbers. While they do need solid math skills, the job involves much more than just number crunching.
Modern-day accounting is a blend of analysis, problem-solving, and detective work. In order to do the job right, you must be able to communicate effectively and deal with people—not just numbers. As such, the job's tasks are much more diverse than many people assume. If you're thinking about a career in accounting or auditing, read on to find out more about what the job entails and how you can get into it.
- Accountants work for individuals, companies, and governments to ensure firms operate efficiently, records are kept up to date, and taxes are paid.
- Although accountants work nine-to-five, they may work longer hours during busy periods.
- There are as many as four different accounting fields and just as many unique career paths.
- To work as an accountant, you'll need at least an undergraduate degree and additional certifications also help.
- Expect to start as a junior accountant before you can work your way up.
The Daily Grind
Accountants work for companies, individual clients, and governments to ensure that firms run efficiently, records are kept accurately and taxes are paid. As such, they may be hired internally or as external consultants. Other duties include analyzing budgets and providing financial planning services as well as information technology consulting and limited legal services.
Accounting tends to be a typical nine-to-five office job, although longer hours are common during busy periods, such as tax time or when corporations and governments have to submit financial reports for their fiscal year ends.
According to statistics from the Bureau of Labor Statistics (BLS), about 24% of accountants worked for accounting, tax preparation, bookkeeping, and payroll service firms while 4% were self-employed. The remaining professionals worked for private industry and the government.
What You Need to Become an Accountant
If you want to work as an accountant, you'll need an undergraduate degree in accounting, economics, finance, or a related field. Keep in mind, though, that many junior colleges and business correspondence schools offer diplomas that may allow graduates to work as junior accountants and eventually advance with experience.
In order to file any report with the Securities and Exchange Commission (SEC), an accountant must become a CPA. You can accomplish this by meeting your state's requirements and passing a national exam. The four-part CPA exam, prepared by the American Institute of Certified Public Accountants (AICPA), is very difficult. According to the BLS, most states require candidates to pass all four parts of the CPA exam within 18 months after successfully completing the first part.
- Certified Management Accountant (CMA)
- Certified Information Systems Auditor (CISA)
- Accredited Business Accountant (ABA)
- Certified Fraud Examiner (CFE)
Consider this: You can become certified in any one or more of these in addition to or instead of the CPA designation. Doing so may provide you with an edge in the job market.
Almost all states require that a CPA candidate have a college degree along with an additional 30 hours of college coursework. As such, accounting majors should get to know their state's requirements for CPA candidacy and ensure that they complete the correct number of college hours while they can.
Key Characteristics for Accountants
There's a lot more to accounting than just crunching numbers. The geeky accountant who does nothing but hammer away on his adding machine is virtually a thing of the past. These days, accounting is a very team-oriented profession.
In your first job, you're likely to start as a junior member of a team responsible for, say, preparing financial statements, or auditing a particular account or a client's financial statements. If you're a public accountant, you may also spend a significant amount of time face-to-face with clients, providing individualized solutions to their unique tax and accounting issues. As such, the ability to communicate and cooperate with other people is a must.
You may not need to be a math whiz, but if you're not extremely skilled with computers, accounting is not for you. Most of your work will be done electronically, and firms are always implementing new accounting software and systems for submitting and preparing financial statements.
If you have a laid-back personality and tend to let things slide, stay away from this career. Accountants must be conscientious and should tend toward perfectionism. After all, you could be making decisions worth millions of dollars, and if your conclusions aren't 100% accurate, there could be very serious repercussions.
Salary Expectations for Accountants
According to the BLS, the median annual earnings for accountants in 2021 was $77,250. The top 10% earned $128,970 in their field while the bottom 10% made about $47,970 each year.
Where you fall on the pay scale depends entirely on a number of factors, including:
- The state in which you work
- Your experience
- Your education and certifications
- The type of job and accounting field you choose
Demand for accountants and auditors is expected to grow by 6% between 2021 and 2031, which is considered to be as fast as average for all occupations according to the Bureau of Labor Statistics.
Different Accounting Fields
There are four major fields of accounting and auditing. The kind of work these professionals do is determined, in part, by what field of work they choose:
- Management Accountants: Management accountants tend to work for companies as part of teams. They provide company executives with the information and analysis they need to make decisions. Executives also use this information to prepare the financial reports that are distributed to shareholders, creditors, regulatory agencies, and the Internal Revenue Service (IRS).
- Government Accountants/Auditors: Accountants are employed by federal, state, and local governments for a variety of reasons. Not only do they do the books for government agencies, but they also audit businesses and individuals who are required to conform to government regulations or pay taxes. Accountants who work for the federal government may be employed by the IRS and may be responsible for auditing branches of government organizations to ensure financial objectives are being met.
- Public Accountants: This is one of the broadest accounting fields, as public accountants provide accounting, tax, auditing, and consulting services for governments, corporations, nonprofits, and individuals. Many public accountants are Certified Public Accountants (CPAs), but they may concentrate their efforts on a few services, such as tax preparation for businesses and individuals or auditing financial statements.
- Internal Auditors: Internal auditors act as detectives. They work to examine the internal controls of an organization and attempt to sniff out and prevent inaccuracy, mismanagement, and fraud.
Unique Career Paths for Accountants
If you're looking for a more unique career path, the American Institute of Certified Public Accountants provides some exciting suggestions:
- Forensic Accounting: Uncovering financial fraud and putting the perpetrators in prison is all in a day's work for a forensic accountant. Companies lose billions each year to fraud, making this sector one of the fastest growing.
- Environmental Accounting: As the green movement grows in business, environmental accountants are sought to analyze the costs of pollution prevention for manufacturing and compare it against other alternatives, including missed tax credits, fines, and bad relations with neighbors.
- Showbiz Accounting: If you're lucky, you could end up providing financial services to studios, production companies, artists, and technicians. This job would deal with the traditional areas of tax, audit, and financial analysis, but working in Hollywood could add that touch of glamor that some people seek.
- Trustee In Bankruptcy: These accountants are appointed by the U.S. Department of Justice in bankruptcy court proceedings. They are appointed in all Chapter 7, 12, and 13 bankruptcy cases to ensure that unsecured creditors, such as a corporation's shareholders, are represented so that they can receive a portion of the proceeds of corporate liquidation—if there's anything left over.
The Bottom Line
People have traditionally thought of accountants as being number crunchers—people who sit with calculators and file tax returns or make sure there are checks and balances in financial statements. But that's all changed.
Accounting has become a diverse career path with virtually unlimited options. If you have the right set of skills for the job, you can find a way to employ them that also suits your tastes, personal strengths, and personality.