Accounting Report Essay, Research Paper
Anyone considering accounting needs to assess whether this career fits his or her interests, abilities, and aspirations. There are certain qualities and qualifications, however, that a person should consider before making a commitment to a particular career field. Selecting a career can take a lot of time, and many people do not choose until they are adults. Contributing to the difficulty in choosing a career is the vast number of vocations from which to choose. The field of accounting alone covers dozens of types of accountants and dozens of jobs. In trying to decide whether accounting is an appropriate career choice, a person should talk with bookkeepers and accountants that have years of experience. Ask questions about their daily work requirements, their likes and dislikes about accounting, and how they became interested in the profession. Questions such as these can give a person insight into the profession and help in considering accounting as a career
Accounting is a system used to provide financial information about a business or person. Accountants prepare and analyze financial records for individuals, companies, governments, or other organizations. Accounting is a basic need for every business, and the term business has been broadened to mean any operation that deals with money. That includes families and corporations, and also schools, theaters, art galleries, charitable organizations, and even some private persons. People sometimes call accounting “the language of business” because accounting data are used to detail firms activities. Accounting tells the history of a business or person in numbers.
Over one million people are employed as accountants, and most can be found in private business and industry. “Nearly 40 percent of all accountants are certified, and about 10 percent are self-employed’(Caruna, 1). In addition to openings resulting from growth, the need to replace accountants who retire or transfer to other occupations will produce thousands of job opening annually in this large occupation. The Occupational Outlook Handbook states that the expansion of accountants is related to: “increasingly complex taxation, growth in both the size and the number of business corporations required to release financial reports to stockholders, a more general use of accounting in the management of business, and outsourcing of accounting services by small business firms”(Bureau of Labor Statistics, 7). While the majority of jobs will be found in large cities with large businesses, smaller firms will start up and smaller business will continue to seek outside accountants. Accounting jobs are more secure than most during economic downswings. “Despite fluctuations in the national economy, there will always be a need to manage financial information, especially as the number, size, and complexity of business transactions increases”(8). However, competition for jobs will remain, certification will become more rigorous, and accountants with the highest degrees will be the most competitive.
In order to become an accountant, a person needs an aptitude for mathematics. In addition, a person must be neat, accurate, able to work with little supervision, and able to handle responsibility. Starting in high school, students preparing for an accounting career should be proficient in arithmetic and basic algebra. Familiarity with computers and their applications is equally important. Course work in English and communications will also be beneficial. “In college, a bachelors degree with a major in accounting is highly recommended by professional associations for those entering the field and is required by all states before taking the licensing exam”(Cosgrove, 5). It is possible, however, to become a successful accountant by completing a program at a private business school, junior college, university, or correspondence school. Better positions, particularly in public accounting, require a bachelor’s degree with a major in accounting. Large public accounting firms often prefer people with a master’s degree in accounting. “For beginning positions in accounting, the federal government requires four years of college including 24 semester hours in accounting or auditing”(5). Certified public accountants must pass a qualifying examination and hold a certificate issued by the state in which they practice. In all states, a college degree is required for admission to the CPA examinations. “Over 30 states require CPA candidates to have 150 hours of education, which is 30 hours beyond the standard bachelors degree, and other states are expected to follow suit in the next several years”(Cosgrove, 5). Nearly all states require at least two years of public accounting experience before a person can take the CPA exam. “The exam is very difficult in which only 25 percent of the applicants pass and more than 9 out of 10 successful CPA candidates in recent years have been graduates of four-year college or university programs”(Caruna, 9).
Other important skills needed by a public accountant are attentiveness to detail, patience, and industriousness. “The ability to generate clientele is crucial to a service-oriented business, as is honesty, integrity, and a respect for the work of others” (Crail). Good concentration, accuracy, attention, flexibility, and the ability to judge and make decisions are other key factors in becoming a successful accountant.
The advantages of accounting careers begins with education. The vast number of institutions and the variety of courses present students with many options. Students can decide to get a bachelors degree and study for the CPA examination after graduating or can complete graduate study, doing research and writing papers about the field. When entering the job market, accountants are not tied to one company or industry. Many careers are flexible, accounting offers a variety of choices because the knowledge and skills of an accountant can be used at many different companies. This flexibility gives accountants independence and variety. Another advantage of an accounting career is the possibility of job advancement. Company executives realize the importance of accounting and accountants to a firm and are often prepared to offer promotions more quickly. Accountants may also advance to such jobs as chief plant accountant, chief cost accountant, budget director, or manager of internal auditing. Some achieve corporate-level positions such as controller, treasurer, financial vice-president, or president.
“Public Accountants can advance from beginner through intermediate-level positions in one or two to senior positions in another few years as they gain experience and handle more complex accounts” (Careers, 4). In large accounting firms, they often become supervisors, managers, or partners. Some accountants transfer to executive positions in private firms or open their own public accounting offices. Entry-level accountants employed by the federal government are usually promoted within two years. Accountants are also rewarded by their annual salary. “The average annual salary of an accountant is $45,000”, according to a recent survey by the National Association of Accountants (3). This includes accountants at all levels of education with associates, bachelors, masters, or doctoral degrees. Salary levels rise with education level, reaching an average of $60,000 for those with the doctorate. “Some of the highest-paid accountants are company partners, executive vice presidents, and divisional vice presidents” (National Association of Accountants, 5). Their average total compensation is more than $100,000.
Accounting careers offer other advantages in addition to the financial reward. Many accountants enjoy the responsibility and professionalism involved. “Finding a variety of clients is an advantage,” said Steve Crail, “I enjoy being exposed to different people, issues, and situations”. Finally, the other aspect most accountants enjoy is the service to others. “I enjoy counseling and assisting the public about investments, and they are dedicated to serving the public interest.
Employment in accounting should be steady and secure for the future. During good and bad times, companies need accountants. “Whether a business is booming or bankrupt, an accountant is needed to compile financial statistics and create reports” (Rosenthal, 25). Accountants are very important figures in a business and are usually the very last to be fired. Also, accountants can receive great benefits such as unemployment insurance, pension and retirement benefits provided by large employers and government agencies. Often employed accountants receive stock options and life insurance, as well as health insurance.
Another advantage of an accounting career is the excellent working conditions. “Most offices are well lighted, well ventilated, and air-conditioned” (Rosenthal, 26). The hours of work vary, but private accountants working for businesses or government agencies usually work forty-hour week. The workload of accountants increases for public accountants at the end of the year and into the spring because of tax season. This becomes a very large money making period in which some of the profits and benefits go to the accountants.
Many of the advantages of an accounting career can also be disadvantages. For some people working in an office 40 hours a week is appealing, but to many seems quite boring. Nor do the nine to five hours appeal to everyone. “I spend an average of 35 percent time of my time on paperwork, document review, and accounting procedures, while most of the time I spend my time on the phone, traveling to different locations, or meeting with executives, clients, representatives, and other divisional accountants” (Crail). Some people do not like the responsibility involved in accounting jobs. Accountants are responsible for actively searching for financial fraud in companies they audit, and being the bearer of unpleasantness more often than blessings. Accountants are required to state whether they have any doubts about a company’s financial strength. “I didn’t know how many people just don’t pay attention to their own numbers,” said Steve Crail, “and how defensive people are when they are wrong.” Besides the responsibilities in accounting, the risks of lawsuits also have caused some accountants to leave the field. Some firms no longer perform auditing, and those that do have raised their fees to compensate for the increased risk. With this responsibility, there also comes a certain amount of tension. There are no health hazards of being an accountant, but working in the field can be very stressful at times. When accountants have to balance books, meet with clients, and work from morning to nighttime, mistakes can prove to be very worrisome and frustrating, and some people prefer a career with virtually no stress.
All jobs have positives and negatives. For most of those entering the accounting profession, however, the advantages can outweigh the disadvantages. Accounting can be anything a person makes it. It can be glamorous and exciting or tedious and dreary. Much depends on a person’s attitude. Many people who enter the profession are happy and perfectly satisfied being accountants. They have reached their goal.
There are four major areas of work within the public accounting field: accounting and auditing, taxation, management consulting, and entrepreneurial services. In large firms, these are separated into different departments. In smaller firms, the areas may not formally divided because the same person may perform more than one of these functions.
The first level on entry into the public accounting field is accounting and auditing. Accounting and auditing are basic functions of most public accounting firms and in most large firms still generate a large portion of the firms revenues. An auditor’s job is to determine whether the economic activities of an organization are fairly reflected in its financial statements. Auditors need to go beyond the numbers of a company and look at the operations from a businessperson perspective. They need to review a company’s internal control system, safeguard business assets, and look at the accuracy of the financial records. The auditor then reaches a conclusion, using the information gained from analyzing the company and from overall knowledge.
The second level of entry into the public accounting profession is taxation. “Taxation is a complex and challenging area of the accounting profession because of constantly changing tax policies, the growth of multinational firms, and the greater complexity of business in general” (Gaylord, 4). The CPA offers services such as tax planning and advice, the filling of tax returns and supporting documents, representation of clients before government agencies, estate planning, and other assistance to clients in regard to complying with tax laws. “Typical tax consulting projects include: advising a client on acquisitions and mergers, evaluating tax aspects of various leasing agreements, guiding a client in reducing taxes, and counseling corporate executives on minimizing business taxes” (5).
The third level on entry for a public accountant is management counseling services. “The role of management consulting professionals is to help clients define the information needs of their organization and to identify and assemble the data needed to create the information” (Gaylord, 5). An important function of management consulting services is to help with a company’s financial planning and control. “Other examples of consulting projects of CPA firms are: advising and developing a system for a stock exchange, assisting a new integrated financial management system for New York City, and helping several major railroads with resource planning” (Rosenthal, 22). A career in management consulting offers the opportunity to work with a company’s executives in applying the concepts of modern management and information technology.
The final level of entry into public accounting is entrepreneurial services. In the book Careers in Accounting, it says that working in the entrepreneurial field “is a fast-growing and dynamic area that has been formed in most large firms in the last few years” (5). The person working in this area deals with the special requirements of a startup or growing company. Professionals in this group are involved in counseling and advising the emerging or middle-market company that may lack the resources to successfully handle planning, cost control, attracting capital, going public, or choosing the right information system or compensation plan. Audit, tax, and management consulting skills are all used to fill the needs of an emerging business.