Saturday, April 19, 2008

Accounting Careers & Your Future in Numbers

Career Center - by Get Degrees Staff

Accounting Related Terms:

Accountant, CPA, certified public accountant, certified accountant, payroll, payroll accountant, payroll services, withholding, back office, bookkeeper, bookkeeping, ledger, accounting ledger, accounting journal, P&L, profit and loss statement, pro forma, budgeting, budget, tax accountant, tax accounting, tax consultant, public accountants, private accountants, business accounting, agency accounting, forensic accounting, auditor, auditing, internal auditing, external auditing, audit accountant, government accountant, government accounting, special funds accounting, trust accounting, fiduciary accounting, accountancy, accruals, accounting variances, accounting clerk, general ledger, accounts receivable, accounts payable, invoices, invoicing, monthly statement, annual statement, accounting software, operating costs, wages and benefits, risk management, tax accountant, 1099, exemptions, income tax preparation, gross income, adjusted gross income, dependents, FICA, wages, job cost accounting, managerial accounting, inventory accounting, outsourced accounting, throughput accounting, non-profit accounting, financial statements, internal auditor

Accounting Summary:

In the simplest terms, accountants measure, record and report financial activities.  Those activities may be of a business in the form of a 10K; for a corporation in the form of an annual report; for a government entity in the form of a report, an audit or a year-end budget; or for an individual in the form of a tax return. 

There are several variations of the accounting profession.  Accounting is the “language” of finance and the several distinct types of financial analysis and reporting that take place in today’s world require a wide range of training and specialization.

Public accounting is the term reserved for your accountant who has hung out a shingle and operates a business providing accounting services for small businesses and individuals.  These individuals may be defined as public accountants or, if they have gone through additional training, certified public accountants.  The certification aspect of the job is not terribly important for run-of the-mill accounting activities such as tax preparation or monthly business book keeping for a small firm.

Financial accounting refers to the accounting process required of large public companies, for the purpose of quarterly reports, annual reports and reports to shareholders.  Managerial accounting is another job – conceivably within the same publicly held corporation – that provides financial analyses used for managerial decision making.  A managerial accountant’s work is generally seen only by senior executives, analysts and consultants.  Tax accounting (within a large business framework) is the section of the financial office that focuses on tax requirements and reports for various governmental jurisdictions.

There are also accounting positions that focus on internal auditing and external auditing.  Both types of accounting involve reviewing accounting records to determine authenticity and accuracy.  Internal accounting is an in-house monitoring of the bookkeeping activity; external auditing is the work of an outside independent firm (or agency such as the IRS) to determine if the accounting work meets the rules and regulations governing the accounting records under review. 

Accounting FAQs

What are the educational requirements for an accountant?

A Bachelor’s Degree in Accounting is necessary for a primary accounting position within a business.  There are Associate’s Degrees in accounting, but they generally lead to bookkeeping and ledger entry type jobs. 

What is required to become a CPA?

Individuals who wish to become certified public accountants generally are required to hold a bachelor’s degree.  Some states require a certain number of college credits that suggest post graduate work; however the principal challenge is usually passing the state-administered exam.

Are there other “certified” positions?

There are certified bookkeepers, certified general accountants, certified internal auditors, certified management accounts – and on it goes.  As with many professions, there is a wealth of “certifying” agencies and organizations.  Some carry the weight of legitimacy more than others.  Once you have focused on an interest in accounting, explore the certification requirements – if any – for the type of accounting that interests you.  If certification is optional, find out how important it is.

What are the guidelines for an audit?

In the United States, external audits apply what are referred to as “Generally accepted accounting principals.” 

Who defines “generally accepted accounting principles?”

Generally accepted accounting principles (GAAP) are just as they are described: principles rather than codified or statutory law.  Most nations have a national body that puts definitions and guidelines to these principles. In the U.S, the Financial Accounting Standards Board (FASB) sets the guidelines for public and privately held firms, and for non-profits.  Many nations, including the United States, have gravitated to the International Financial Reporting Standards, which are maintained by the International Accounting Standards Board.

Why Should I see an Accountant?

Generally, the value of an accountant’s services rise in proportion to the financial complexity of your life.  As you accumulate things such as a home, children, a business, and even an inheritance the applicable tax laws become more and more complex.  An accountant will maximize the protection of your assets, especially your income, through a thorough understanding of current tax law.  It is critical that every consumer understand that tax laws change all the time, for all sorts of taxes.  It takes a professional to keep current with all of them.

What is the difference between a general public accountant and a Certified Public Accountant?

At the corporate level, most firms want CPAs in positions of responsibility, as the additional training ensures that the individual has had thorough training.  An accountant filing a report with the Securities and Exchange Commission must be a CPA.  A general accountant licensed by the state often has a successful small business handling tax returns for individuals, and both bookkeeping and tax chores for small business.  Certification and training are key for careers at the corporate level. 

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