Accounting is generally concerned with transferring an organization’s information to people who need it. The information is structured in the form of financial statements. In a business organization, there is a lot of information that is required in order to assess the performance of the business, its future viability, credit worthiness, and to project its future.
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Some of the people who need this information include investors, suppliers, creditors, customers, the government, commissioner of tax, and the general public. The information is usually bulky, thus it has to be summarized into monetary form and presented as financial statements. Accounting principles are applicable in three major categories: auditing, accounting as well as bookkeeping (Alba, Manisha and Matthew 31).
One can take various paths in accounting as a career. The path one takes depends on the type of organization they are working in. Such organizations include government institutions, public companies and public institutions, tax departments, auditing departments, and private companies.
The difference occurs mostly with the person each accountant reports to. One can, therefore, take a path in public accounting. Public accountants are accountants who provide accounting services to companies. They can also work as partners, sole proprietors, or as individuals. One can also take a path in government accounting. These are accountants who work mostly for the government and government institutions.
They deal with government funds. Tax accounting, as the name suggests, deals with taxes for individuals and businesses. Finally there is the auditing career path, which mostly deals with verification of the financial information given by the organization’s accountant (Alba, Manisha and Matthew 31). The auditor seeks to ensure that the information is true and fair.
This essay focuses on differentiating between each career path in terms of scope of work, requirements, and any other difference. The paper will also give any similarities that may exist between the various career paths.
A public accountant is an accountant who performs a wide range of functions. Public accountants work in organizations, corporations, NGOs, individual, as well as in government institutions. In addition, they work in organizations that range from small organizations to large organizations.
Some of the functions that a public accountant carries out include auditing, offering consultancy services, tax, financial analysis and financial statement preparation, as well as any other accounting activities. Public accountants can give advice to individuals regarding tax matters, as well as other accounting related information. In most cases, public accountants work or offer their services to the public. They are usually hired by accounting firms and offer their services to a wide range of clients (Alba, Manisha and Matthew 65).
To become a public accountant, one is usually required to attain a bachelor’s degree in accounting and/or being a Certified Public Accountant (CPA). For one to become a CPA in the United States of America, they must have passed the Uniform Certified Public Accountant Exam. After passing this exam, the American Institute of Certified Public Accountants will approve that one has completed and has the right experience to work as a public accountant.
He is then given the designation of CPA designation (Alba, Manisha and Matthew 55). It is important to note that there are different certifications of becoming a public certified accountant in different countries. However, the general principles of accounting have to be followed, regardless of the country of origin. For instance, in a country like Canada certified public accountants are referred to as Chartered Accountants (CA).
However, the qualifications to become a CA are similar to those of becoming a CPA. Other certifications that one can acquire and become a public accountant include Certified Management Accountant (CMA), Enrolled Agents (EA), as well as Certified Fraud Examiner (CFE). CPA is more popular since it is the most common certification in most countries.
Despite the fact that a public accountant is usually employed by accounting firms, they can also be self-employed. They usually work in office settings at the workplace in the firms where they are employed. Public accountants can, however, work at home in some situations. A public accountant can be working for various clients at the same time.
In such cases, they travel often to the various clients. Similarly, they can be working in an organization that has several branches, thus they are required to travel to the various branches to carry out their duties. Accountants mostly work 8 hours a day and five days a week, translating into 40 hours per week. However, this working time may change depending on the scope of work and the terms of work in the organization they are working for. Those who are self-employed may work for longer hours (Alba, Manisha and Matthew 68).
This refers to the extent to which one is satisfied with the job they do. There are a number of factors that influence individual job satisfaction. The factors may differ depending on the type of job. Generally, there is high job satisfaction in public accounting.
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This is because as the business environment is becoming more and more competitive, organizations are finding ways to satisfy their employees in order to reduce the rate of turnover and increase the organizational productivity. Qualified accountants are generally few and, therefore, organizations offer them good working conditions to increase their satisfaction. Job satisfaction is, therefore, high in public accounting, but this may vary depending on personal factors.
This is the accounting that mostly deals with government transactions. Governments are expected to respond to a number of individuals and groups. For instance, they are answerable to the general public for their funds usage. Governments are also answerable to the elected officials, government creditors, as well as government investors (Alba, Manisha and Matthew 69).
he government is, therefore, expected to produce reports on how it uses its funds. Government accountants are responsible for preparing these reports, which are usually in the form of financial statements. They prepare financial reports in order to enhance the accountability and transparency of the government. In the United States of America, government accounting standards differ according to the two levels of government in the country.
There is the federal government and the states’ governments. In the former, government accountants follow the standards set by the Federal Accounting Standards Advisory Board (FASAB). In the latter, the government accountants follow the standards set by the Governmental Accounting Standards Board (GASB).
In every country, there are varying standards for government accounting, although they might have some similarities. Government accounting has a number of differences from the rest of the accounting fields. For instance, in government accounting the focus is on the flow of financial resources and not economic resources as the case is in other forms of accounting. In addition, revenue is not acknowledged when earned, but when money is available in treasury.
On the other hand, expenses are only recognizable once the money has been spent on various governmental projects. The financial statements compare the projected expenses with the actual expenses, and the difference is recognized as either surplus in case the projected expenses exceed the actual expenses or as deficit in case the actual expenses exceed the projected expenses (WetFeetFirm 78).
Possessing a bachelor’s degree in business qualifies one to become a government accountant. Having a bachelor’s degree in accounting can also be considered for the same position. At times, one may be required to have a master’s degree in accountancy or related fields.
There are other additional skills that might be required for a government accountant. For instance, one is expected to have skills in analyzing data and mathematical skills. Strong communication skills and professional integrity are important skills that can help enhance success in the government accountancy career. Having a certification like CPA, CFE, CA, CIA, CGAP, or CGFM is also an added advantage.
Government accountants can work in various divisions within the government. They usually work 8 hours a day and five days a week, translating into 40 hours per week. Government accountants work in office settings where they carry out their duties. Unlike the public accountants, it is not common for government accountants to travel frequently in order to execute their duties. In addition, they cannot work at home and cannot be self-employed (Lewis 110).
A government accounting job is arguably the most satisfying among the other accountancy career paths. The remuneration is usually very competitive. The government gives a wide range of benefits to the accountants, as well as allowances. The working hours are favorable for most people.
The availability of various levels also increases the level of satisfaction for government accountants. In most governments, all workers get retirement benefits once they leave employment on the basis of age. A government accountant is, therefore, motivated by the fact that they will be getting a certain amount of money after they retire (WetFeetFirm 77).
This is a different field of accounting in that it does not focus on financial statements; instead, it focuses on taxes. Tax accounting differs even in the principles that guide it (Lewis 106).
While Generally Accepted Accounting Principles (GAAP) standard is followed in public accounting, tax accounting is guided by different principles. Usually, Internal Revenue Code is responsible for governing tax accounting. In the United States of America, the accounting principles set for the purposes of tax are usually very comprehensive and they differ from those of other countries.
The tax principles are outlined in the tax laws. It is important to note that there are countries that do not have separate tax principles. However, the general rule is that tax statements are prepared differently from financial statements (Alba, Manisha and Matthew 75). In the preparation of tax statements, balance sheet items are considered and recorded differently from the way they appear in financial statements.
A first degree in accounting is a prerequisite in becoming a tax accountant. Related academic fields can also substitute for the bachelor’s degree in accounting. Having a master’s degree will be an added advantage in case one wants to become an advanced tax accountant (Lewis 108).
When taking a master’s course it is important to take a program that will focus more on taxation. It will also be beneficial to be a Certified Public Accountant in order to get the accounting license. This means that one has to complete the CPA exams. Other certifications such as CA, CIA, CGAP, and CGFM are also eligible depending on the country or state in question.
Just like the rest of the accountants, a tax accountant usually works for 8 hours a day, five days a week. They carry out their duties in office settings. In doing their work, tax accountants usually utilize various software that assist them in carrying out tax computations. Such software as Excel, Great Plains, as well as accounting packages such as sage, pastel and QuickBooks are used.
Tax accountants can be self-employed, where they establish their self-owned businesses. In such a situation, the tax accountant can work at home and even work for long hours depending on the scope of work that one has. It is important to note that in tax accounting, there is usually the busiest time when most companies have prepared their annual financial statements and are doing computations for tax payable (Lewis 110). This is usually the period between January and May.
Job satisfaction in tax accounting is relatively high. However, there are a number of issues associated with the job, despite the fact that the salary scale is usually competitive. For instance, tax rules are highly dynamic and keep changing every often. This means that the tax accountant should constantly be updated on the changes.
The demand for knowledge is, therefore, high. For those tax accountants who are employed, the organizations they work for try to make their working conditions highly favorable to increase their job satisfaction. This is because tax accountants are in high demand and have to be satisfied to prevent them from moving on to other organizations (Alba, Manisha and Matthew 75).
In accounting, the term auditing is used to refer to the independent assessment carried out by an auditor with the aim of ensuring that the financial statements are accurate and that they presented in a true and fair manner (Alba, Manisha and Matthew 73). There are situations whereby the financial statements may be misstated, thereby misleading the company or organizational investors to make the wrong investment decisions in regard to the organization.
The transparency of the statements is guaranteed by sourcing for an auditor to assess them. Auditors are, therefore, hired by shareholders, unlike the rest of the accountants. It is important to note that there is an internal auditor who works in the organization throughout the financial year and the external auditor who is only hired at the end of the financial year to verify the financial statements for that year.
For one to become an audit accountant, he or she should have at least a bachelor’s degree in accounting or finance. In addition, the candidate should have a certification in accounting, such as CPA, CA, CIA, CGAP, or any other acceptable certification.
The certification differs depending on the country, but most of these are accepted worldwide. Unlike the other accounting career paths, an auditor should have some training on auditing and should have a license to conduct audits. Therefore, one has to pass exams offered by the Chartered Institute of Internal Auditors (CIIA).
The institution offers a designation known as the Chartered Internal Auditor (CIA). This is a certification that has worldwide recognition; therefore, one can work in any country in the world. Once the candidate has acquired the Audit Certificate, they are now ready to do auditing in any organization. It is important to note that one has to be a qualified accountant before acquiring the audit certificate (Alba, Manisha and Matthew 74).
Employed auditors operate from offices. However, an auditor may be self-employed. In such cases, the auditor may work at home. There are auditors who are usually employed by accounting firms. Such auditors have to travel frequently to various clients or business organizations where they are required to offer their services.
The working hours for auditors are normally 40 hours per week. It is, however, possible to find auditors who work for longer hours. Just like taxation, auditing accountants are usually very busy during the final months of the year when most organizations are preparing their annual financial statements.
Auditing offers the accountants with a high level of job satisfaction. The job is well paid and the working conditions are good, thereby increasing the level of satisfaction. For auditors to be able to perform their duties properly, they need to be offered conditions that will increase their satisfaction. The job is highly competitive and, therefore, organizations try to retain their auditors by offering them good terms and conditions that increase their satisfaction.
The accounting profession is one of the most common and widely pursued professions by many college and university students. Accounting is known to offer many employment opportunities to people mainly due to the fact that organizations are ever increasing. Each organization, whether profit or non- profit making, needs an accountant, thereby raising the number of opportunities in accounting. The jobs are well paying, but they are demanding in terms of scope.
Alba, Jason, Manisha Bathija, and Matthew Thornton. Vault Career Guide to Accounting. New York, NY: Vault Inc, 2005. Print.
Lewis, Eve. Investing in Your Future. New York, NY: Thomson Texere, 2005. Print.
WetFeetFirm. Careers in Accounting. San Francisco, CA: WetFeet, 2008. Print.