When many people think of accountants, they might imagine the bespectacled fellow with an office on Main Street who does their taxes, but that’s only a small aspect of the field. There are about 1.3 million accountants and auditors in the U.S., according to the Bureau of Labor Statistics. The reach and scale of the profession touches everything.
In essence, accountants help businesses, government entities and nonprofits track their income, expenditures and assets. They prepare financial statements, record transactions, measure the effect of new technologies and healthcare benefits on an organization, help them in planning, and search out fraud and waste. Accounting is known as “the language of business” because it communicates the successes, failures and overall state of organizations.
Accountants need to be detail-oriented and well-organized analytical thinkers to do their job correctly. They also need good communications skills to help in marketing, arguing before the IRS in hearings, and to write clear and concise memos and opinion letters to clients.
The math involved is not especially difficult – accountants need to calculate depreciation, interest, stockholder’s equity and the like. None of this is beyond the scale of basic algebra, but it calls for thoroughness, problem solving ability, and research skills.
By making financial information easily accessible, accounting is often described as the language of business. Having a background in accounting does not mean you actually work as an accountant. Plenty work in management and finance, and some rise to the controller position, or even serve as chief financial officers, setting budgets and drawing financial plans for an entire firm.
Consider also the FBI. Accountants made up more than a third of the FBI’s roster when it formed in 1908. These accountants were the ones who found the evidence to indict Al Capone. Today, about 15% of the FBI’s agents are accountants, and it employs a cadre of non-agent accountants to help it with complex financial cases. In 2009, it standardized an investigative support position for forensic accountants to financially profile individuals and businesses suspected of illegal activity. Private businesses also use forensic accountants to check for internal fraud and when entering deals with outside companies
Pretty cool, eh?
There are other sub-fields within accounting that might intrigue those with particular interests. Those who like working with computers could consider becoming an accounting information systems auditor – where they’d get to manage software for financial professionals. There are also accountants that specialize in sports – monitoring a team’s finances, and entertainment – amortize the production costs for film and television or handling royalty distributions. Merger and acquisition accountants help when a business is trying to acquire another firm. They need to research and understand what the acquired firm’s assets and liabilities are, what effect golden parachutes and stay bonuses will likely have on liabilities, and how to factor in those parts of the acquired company that the purchaser may not want or need.
A fairly new sub-field is environmental accountants, who help businesses budget for pollution management while maintaining profitability, and assist government agencies report on natural resources. An older one is mortgage credit – professionals who oversee the underwriting process for mortgages and loans.
Of course, there’s nothing wrong with setting up a small accounting office on Main Street. Many people enjoy being their own boss, though this might be a struggle for a younger person just starting out.
The accounting field pays well too. The Bureau of Labor Statistics pegged the median salary for an accountant at $63,550 in 2012. Those living in metropolitan areas such as New York earned more than that, on average, as did those employed by the federal executive branch and for securities and commodity exchanges.
New accountants usually earn more at large firms than at smaller companies. The largest accounting and advisory organizations are known as the Big Four – KPMG, Deloitte Touche Tohmatsu Limited, Ernst & Young, and PricewaterhouseCoopers. Each of these globe-spanning professional service networks employs nearly 200,000 people, on average. (To give a sense of scale to the Big Four, note that the fifth smallest firm, BDO, has 1200 offices around the world and its still less than a third the average size of a Big Four.) An incoming accountant at the Big Four will make about $50,000. If they do well, and stick around enough years to become partners they’ll earn well into the six-figure range (and even seven figures for senior partners and division leadership).
Don’t want to work at an accounting firm? No problem. Almost every company larger than a lemonade stand uses an accountant. If they have annual revenue exceeding $10 million, those accountants are likely to be on staff. The staffing firm Robert Half International says that senior internal auditors at large companies – those with more than $250 million in annual sales – will make from $76,500 to $102,500. Once they reach the vice president/internal audit director level, salaries can exceed $250,000 a year.
You can buy a lot of spectacles with that.
The Bottom Line
Accounting is a field that offers a great deal of flexibility and a broader range of job options than you might imagine.