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Outline:
Nature of the Work
Working Conditions
Employment
Training, Other Qualifications, and Advancement
Job Outlook
Earnings
Related Occupations
Sources of Additional Information |
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Nature
of the Work
Managers
must have up-to-date financial information to make
important decisions. Accountants and auditors prepare,
analyze, and verify financial reports that furnish
this kind of information to managers in all business,
industrial, and government organizations.
Four
major fields are public, management, and government
accounting, and internal auditing. Public accountants
have their own businesses or work for accounting
firms. Management accountants, also called industrial
or private accountants, handle the financial records
of their company. Government accountants and auditors
maintain and examine the records of government agencies
and audit private businesses and individuals whose
dealings are subject to government regulations.
Internal auditors verify the accuracy of their firm's
financial records and check for waste or fraud.
Within
each field, accountants often concentrate on one
phase of accounting. For example, many public accountants
are employed primarily in financial auditing (examining
a client's financial records and reports and attesting
that they are in conformity with standards of preparation
and reporting). Others concentrate on tax matters,
such as preparing income tax forms and advising
clients of the tax advantages and disadvantages
of certain business decisions. Still others concentrate
on consulting and offer advice on a variety of matters.
They might develop or revise an accounting system
to serve the needs of clients more effectively or
give advice about how to manage cash resources more
profitably.
Management
accountants, the largest group of accountants and
auditors, provide the financial information executives
need to make sound business decisions. They may
work in areas such as taxation, budgeting, costs,
or investments.
Internal
auditing is rapidly growing in importance as top
management must increasingly base its decisions
on reports and records rather than personal observation.
Internal auditors examine and evaluate their firm's
financial and information systems, management procedures,
and internal controls to ensure that records are
accurate and controls are adequate to protect against
fraud and waste. They also review company operations--evaluating
their efficiency, effectiveness, and compliance
with corporate policies and procedures, laws, and
government regulations.
Accountants
and auditors also work for Federal, State, and local
governments. Many persons with accounting backgrounds
work for the Federal Government as Internal Revenue
Service agents or in financial management, financial
institution examination, and budget administration.
In
addition, a small number of persons trained as accountants
staff the faculties of business and professional
schools as accounting teachers, researchers, or
administrators. Some work part time as accountants
or consultants.
Computers
are increasingly being used in accounting and auditing.
With the aid of special computer software systems,
accountants summarize transactions in standard formats
for financial records, put the data in special formats
that aid in financial or management analysis, and
prepare income tax returns. Controls are placed
in systems to enable auditors to ensure the reliability
of the systems and the integrity of data. Software
systems coming into use in accounting and auditing
generally are easily learned and require few specialized
computer skills, but greatly reduce the amount of
tedious manual work with figures and records. Newer,
less expensive personal computers are enabling accountants
and auditors in all fields--even those who work
independently--to use these special software systems
and extract information from large mainframe computers.
A few accountants and auditors have extensive computer
skills and specialize in correcting problems with
software systems or developing special software
programs to meet unique data needs.
Working
Conditions
Most
accountants and auditors work in offices and have
regular hours. Self-employed accountants, who may
set up offices at home, work as many hours as the
business requires.
Tax
accountants work long hours under heavy pressure
during the tax season. Accountants employed by large
firms may travel extensively to audit or work for
clients or branches of the firm.
Employment
Accountants
and auditors held about 962,000 jobs in 2002. They
worked throughout private industry and government,
but nearly one-third worked for accounting, auditing,
and bookkeeping firms, or were self-employed. Many
accountants and auditors were unlicensed management
accountants, internal auditors, or government accountants
and auditors. However, in 2002 there were 501,000
State-licensed Certified Public Accountants (CPAs),
Public Accountants (PAs), Registered Public Accountants
(RPAs), and Accounting Practitioners (APs). Many
accountants and auditors have voluntarily earned
professional designations that certify their professional
competence in fields of accounting and auditing
that are not State regulated: About 16,500 were
Certified Internal Auditors, over 8,500 were Certified
Management Accountants, about 5,800 were Certified
Information Systems Auditors, and about 4,300 held
certificates of accreditation in accounting or taxation
awarded by the Accreditation Council for Accountancy.
Most
accountants and auditors work in urban areas where
public accounting firms and central or regional
offices of businesses are concentrated. About 10
percent of all accountants were self-employed and
fewer than 10 percent worked part time.
Training,
Other Qualifications, and Advancement
Most
public accounting and business firms require applicants
for accountant and internal auditor positions to
have at least a bachelor's degree in accounting
or a closely related field. Many employers prefer
those with a masters degree in accounting or a master's
degree in business administration with a concentration
in accounting. A growing number of employers prefer
applicants who are familiar with computers and their
applications in accounting and internal auditing.
For
beginning accounting and auditing positions, the
Federal Government requires 4 years of college (including
24 semester hours in accounting or auditing) or
an equivalent combination of education and experience.
However, applicants face competition for the limited
number of openings in the Federal Government.
Previous
experience in accounting or auditing can help an
applicant to get a job. Many colleges offer students
an opportunity to gain experience through summer
or part-time internship programs conducted by public
accounting or business firms. Such training is invaluable
in gaining permanent employment in the field.
Professional
recognition through certification or licensure also
is extremely valuable. Anyone working as a Certified
Public Accountant must have a certificate and a
license issued by a State board of accountancy.
The vast majority of States require CPA candidates
to be college graduates, but some states substitute
a certain number of years of public accounting experience
for the educational requirement. Based on recommendations
made by the American Institute of Certified Public
Accountants, a few States require or are considering
requiring CPA candidates to have training beyond
the usual 4-year bachelor's degree--for example,
a 5-year bachelor's degree or a master's degree.
This requirement may become more common in the coming
years.
All
States use the four-part Uniform CPA Examination,
prepared by the American Institute of Certified
Public Accountants, to establish eligibility for
certification. The CPA examination is rigorous,
and candidates are not required to pass all four
parts at once. However, most States require candidates
to pass at least two parts for partial credit. Many
States require all sections of the test to be passed
within a certain period of time. Most States require
applicants for a CPA certificate to have some public
accounting experience. For example, bachelor's degree
holders most often need 2 years of experience, while
master's degree holders often need no more than
1 year.
To
become a licensed public accountant (LPA) or "accounting
practitioner," some States require only a high
school diploma; others require college training.
However, with dramatic growth in the number of CPA's,
some States no longer offer the LPA designation.
Information on requirements may be obtained directly
from individual State boards of accountancy or from
the National Society of Public Accountants (NSPA).
Professional
societies grant other forms of certification on
a voluntary basis. The Institute of Internal Auditors,
Inc., confers the designation Certified Internal
Auditor (CIA) upon graduates from accredited colleges
and universities who have completed 2 years' experience
in internal auditing and who have passed a four-part
examination. The EDP Auditors Association confers
the designation Certified Information Systems Auditor
(CISA) upon candidates who pass an examination and
who have completed 5 years' experience in auditing,
of which at least 2 involved auditing electronic
data processing systems. The National Association
of Accountants (NAA) confers the Certificate in
Management Accounting (CMA) upon candidates who
pass a series of uniform examinations and meet specific
educational and professional standards. The Accreditation
Council for Accountancy awards accreditation in
accountancy and taxation to persons who have passed
a comprehensive examination. Accreditation is maintained
by competing mandatory continuing education.
Persons
planning a career in accounting should have an aptitude
for mathematics, be able to analyze, compare, and
interpret facts and figures quickly, and make sound
judgments based on this knowledge. They must question
how and why things are done and be able to clearly
communicate the results of their work, orally and
in writing, to clients and managements.
Accountants
and auditors must be patient and able to concentrate
for long periods of time. They must be good at working
with business systems and computers as well as with
people. Accuracy and the ability to handle responsibility
with limited supervision are important.
Perhaps
most important, because millions of financial statement
users rely on their services, accountants and auditors
should have high standards of integrity.
A growing
number of States require both CPA's and licensed
public accountants to complete a certain number
of hours of continuing education before licenses
can be renewed. The professional associations representing
accountants sponsor numerous courses, seminars,
group study programs, and other forms of continuing
education. Increasingly, accountants and auditors
are learning how to operate computers so they can
use accounting software packages that enable raw
transactions data to be quickly transformed into
a variety of specialized reports and tabulations.
Capable
accountants and auditors should advance rapidly;
those having inadequate academic preparation may
be assigned routine jobs and find promotion difficult.
Many graduates of junior colleges and business and
correspondence schools, as well as outstanding bookkeepers
and accounting clerks who meet the education and
experience requirements set by their employers,
are successful in landing junior accounting positions.
Beginning
public accountants usually start by assisting with
auditing work for several clients. They may advance
to intermediate positions with more responsibility
in 1 or 2 years and to senior positions within another
few years. Those who deal successfully with top
industry executives often become supervisors, managers,
or partners, or transfer to executive positions
in private firms. Some open their own public accounting
offices.
Beginning
management accountants often start as ledger accountants,
junior internal auditors, or as trainees for technical
accounting positions. They may advance to chief
plant accountant, chief cost accountant, budget
director, or manager of internal auditing. Some
become controllers, treasurers, financial vice-presidents,
or corporation presidents. Many corporation executives
have backgrounds in accounting, internal auditing,
and finance.
Job
Outlook
Employment
of accountants and auditors is expected to grow
as fast as the average for all occupations through
the year 2010 due to the key role these workers
play in the management of all types of businesses.
Although increased demand will generate many new
jobs, most openings will result from the need to
replace workers who leave the occupation, retire,
or die. While accountants and auditors tend to leave
the profession at a lower rate than members of most
other occupations, replacement needs will be substantial
because the occupation is large.
As
the economy grows, the number of business establishments
increases, requiring more accountants and auditors
to set up their books, prepare their taxes, and
provide management advice. As these businesses grow,
the volume and complexity of information on costs,
expenditures, and taxes will grow as well. Plant
expansion, mergers, or foreign investments may depend
upon the financial condition of the firm, tax implications
of the proposed action, and other financial considerations.
Also, growing international competition is forcing
many businesses to develop more cost information
to help make their operations more efficient. Requirements
may also be affected by changes in legislation related
to taxes, financial reporting standards, business
investment, and other financial matters. In addition,
increases in investment and lending associated with
general economic growth also should spur demand
for accountants and auditors. Growth in demand for
management advisory services and personal financial
planning assistance may also contribute to growth
in requirements for public accountants.
Opportunities
are expected to be favorable for college graduates
seeking accounting and auditing jobs. Certified
accountants, particularly CPA's, should have a wider
range of job opportunities than other accountants.
However, competition for jobs with prestigious accounting
firms will remain keen; a master's degree in accounting
should be an asset. Opportunities for accountants
without a college degree will occur mainly in small
businesses and accounting firms.
Many
employers prefer graduates who have worked part
time in a business or accounting firm while in school.
In fact, experience has become so important that
some employers in business and industry seek persons
with 1 or 2 years' experience for beginning positions.
Accountants
rarely lose their jobs when other workers are laid
off during hard economic times. Financial information
must be developed regardless of the state of the
economy.
Earnings
According
to a survey conducted by the National Association
of Colleges and Employers, bachelor's degree candidates
in accounting received offers averaging $27,900
a year; inexperienced master's degree candidates,
$31,500.
Beginning
public accountants employed by public accounting
firms averaged $25,400 a year in 1993, according
to a national survey. The middle 50 percent had
starting salaries ranging from $23,000 to $28,200.
Salaries of junior public accountants who were not
owners or partners of their firms averaged $28,100,
but some had salaries of more than $39,500. Many
owners and partners of firms earned considerably
more. The starting salary of management accountants
in private industry averaged $23,100 in 1990, according
to the same survey. The middle 50 percent had starting
annual salaries ranging from $20,800 to $25,300.
Salaries of non-supervisory management accountants
averaged $34,850 in 1990, and some of the most experienced
had salaries of over $78,000. Chief management accountants
who direct the accounting program of a company or
one of its establishments averaged $55,450 a year.
Their salaries ranged from $39,525 to more than
$100,900, depending upon the scope of their authority
and the size of their professional staff.
According
to the same survey, beginning trainee internal auditors
averaged $24,500 a year in 1990. The middle 50 percent
had annual starting salaries ranging from $21,8500
to $26,000. Internal auditors averaged $34,225,
but some of the most experienced had salaries of
more than $48,900.
In
the Federal Government, the starting annual salary
for junior accountants and auditors was about $18,700
in 1995. Candidates who had a superior academic
record could begin at $23,200. Applicants with a
master's degree or 2 years'
professional
experience began at $28,300. Accountants in the
Federal Government averaged about $50,500 a year
in 1995; auditors, about $53,600.
Related
Occupations
Accountants
and auditors design internal control systems and
analyze financial data. Others for whom training
in accounting is invaluable include appraisers,
budget officers, loan officers, financial analysts,
bank officers, actuaries, underwriters, tax collectors
and revenue agents, FBI special agents, securities
sales workers, and purchasing agents.
Sources
of Additional Information
Information
about careers in public accounting and about competency
tests administered in colleges and public accounting
firms may be obtained from:
American
Institute of Certified Public Accountants, 1211
Avenue of the Americas, New York, N.Y. 10036.
Information
on specialized fields of accounting and auditing
is available from:
National
Association of Accountants, P.O. Box 433, 10
Paragon Dr., Montvale, N.J. 07645.
National
Society of Public Accountants and Accreditation
Council for Accountancy, 1010 North Fairfax
St., Alexandria, Va. 22314.
The
Institute of Internal Auditors, 249 Maitland
Ave., P.O. Box 1119, Altamonte Springs, Fla.
32701.
The
EDP Auditors Association, 373 South Schmale
Rd., Carol Stream, Ill. 60188.
For
information on accredited accounting programs and
educational institutions offering a specialization
in accounting, contact:
American
Assembly of Collegiate Schools of Business,
605 Old Ballas Rd., Suite 220, St. Louis, Mo.
63141.
