Accountants and auditors help to ensure that the Nation’s firms
are run efficiently, its public records kept accurately, and its
taxes paid properly and on time. They perform these vital functions
by offering an increasingly wide array of business and accounting
services to their clients. These services include public,
management, and government accounting, as well as internal auditing.
Beyond the fundamental tasks of the occupation—preparing,
analyzing, and verifying financial documents in order to provide
information to clients—many accountants now are required to
possess a wide range of knowledge and skills. Accountants and
auditors are broadening the services they offer to include budget
analysis, financial and investment planning, information technology
consulting, and limited legal services.
Specific job duties vary widely among the four major fields of
accounting: public, management, government, and internal.
Public accountants perform a broad range of accounting,
auditing, tax, and consulting activities for their clients, who may
be corporations, governments, nonprofit organizations, or
individuals. For example, some public accountants concentrate on tax
matters, such as advising companies of the tax advantages and
disadvantages of certain business decisions and preparing individual
income tax returns. Others offer advice in areas such as
compensation or employee healthcare benefits, the design of
accounting and data-processing systems, and the selection of
controls to safeguard assets. Still others audit clients’
financial statements and report to investors and authorities that
the statements have been correctly prepared and reported. Public
accountants, many of whom are Certified Public Accountants (CPAs),
generally have their own businesses or work for public accounting
firms.
Some public accountants specialize in forensic
accounting—investigating and interpreting white collar crimes such
as securities fraud and embezzlement, bankruptcies and contract
disputes, and other complex and possibly criminal financial
transactions, such as money laundering by organized criminals.
Forensic accountants combine their knowledge of accounting and
finance with law and investigative techniques in order to determine
if illegal activity is going on. Many forensic accountants work
closely with law enforcement personnel and lawyers during
investigations and often appear as expert witnesses during trials.
In response to the recent accounting scandals, new Federal
legislation restricts the nonauditing services that public
accountants can provide to clients. If an accounting firm audits a
client’s financial statements, that same firm cannot provide
advice in the areas of human resources, technology, investment
banking, or legal matters, although accountants may still advise on
tax issues, such as establishing a tax shelter. Accountants may
still advise other clients in these areas, or may provide advice
within their own firm.
Management accountants—also called cost, managerial,
industrial, corporate, or private accountants—record and analyze
the financial information of the companies for which they work.
Other responsibilities include budgeting, performance evaluation,
cost management, and asset management. Usually, management
accountants are part of executive teams involved in strategic
planning or new-product development. They analyze and interpret the
financial information that corporate executives need to make sound
business decisions. They also prepare financial reports for
nonmanagement groups, including stockholders, creditors, regulatory
agencies, and tax authorities. Within accounting departments, they
may work in various areas, including financial analysis, planning
and budgeting, and cost accounting.
Government accountants and auditors work in the public
sector, maintaining and examining the records of government agencies
and auditing private businesses and individuals whose activities are
subject to government regulations or taxation. Accountants employed
by Federal, State, and local governments guarantee that revenues are
received and expenditures are made in accordance with laws and
regulations. Those who are employed by the Federal Government may
work as Internal Revenue Service agents or in financial management,
financial institution examination, or budget analysis and
administration.
Internal auditors verify the accuracy of their
organization’s internal records and check for mismanagement,
waste, or fraud. Internal auditing is an increasingly important area
of accounting and auditing. Internal auditors examine and evaluate
their firms’ 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. There are many
types of highly specialized auditors, such as electronic
data-processing, environmental, engineering, legal, insurance
premium, bank, and healthcare auditors. As computer systems make
information timelier, internal auditors help managers to base their
decisions on actual data, rather than personal observation. Internal
auditors also may recommend controls for their organization’s
computer system to ensure the reliability of the system and the
integrity of the data.
Computers are rapidly changing the nature of the work for most
accountants and auditors. With the aid of special software packages,
accountants summarize transactions in standard formats for financial
records and organize data in special formats for financial analysis.
These accounting packages greatly reduce the amount of tedious
manual work associated with data management and recordkeeping.
Computers enable accountants and auditors to be more mobile and to
use their clients’ computer systems to extract information from
databases and the Internet. As a result, a growing number of
accountants and auditors with extensive computer skills specialize
in correcting problems with software or in developing software to
meet unique data management and analytical needs. Accountants also
are beginning to perform more technical duties, such as
implementing, controlling, and auditing systems and networks, and
developing technology plans and budgets.
Increasingly, accountants also are assuming the role of a
personal financial advisor. They not only provide clients with
accounting and tax help, but also help them develop personal
budgets, manage assets and investments, plan for retirement, and
recognize and reduce exposure to risks. This role is a response to
client demands for a single trustworthy individual or firm to meet
all of their financial needs. However, accountants are restricted
from providing these services to clients whose financial statements
they also prepare.
Most accountants and auditors work in a typical office setting.
Self-employed accountants may be able to do part of their work at
home. Accountants and auditors employed by public accounting firms
and government agencies may travel frequently to perform audits at
branches of their firm, clients’ places of business, or government
facilities.
Most accountants and auditors generally work a standard 40-hour
week, but many work longer hours, particularly if they are
self-employed and have numerous clients. Tax specialists often work
long hours during the tax season.
Accountants and auditors held about 1.1 million jobs in 2002.
They worked throughout private industry and government, but 1 out of
5 wage and salary accountants worked for accounting, tax
preparation, bookkeeping, and payroll services firms. Approximately
1 out of 10 accountants or auditors were self-employed.
Many accountants and auditors are unlicensed management
accountants, internal auditors, or government accountants and
auditors; however, a large number are licensed Certified Public
Accountants. Most accountants and auditors work in urban areas,
where public accounting firms and central or regional offices of
businesses are concentrated.
Some individuals with backgrounds in accounting and auditing are
full-time college and university faculty; others teach part time
while working as self-employed accountants or employed as
accountants for private industry or government.
Most accountant and auditor positions require at least a
bachelor’s degree in accounting or a related field. Beginning
accounting and auditing positions in the Federal Government, for
example, usually require 4 years of college (including 24 semester
hours in accounting or auditing) or an equivalent combination of
education and experience. Some employers prefer applicants with a
master’s degree in accounting, or with a master’s degree in
business administration with a concentration in accounting.
Previous experience in accounting or auditing can help an
applicant 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. In addition,
practical knowledge of computers and their applications in
accounting and internal auditing is a great asset for jobseekers in
the accounting field.
Professional recognition through certification or licensure
provides a distinct advantage in the job market. CPAs are licensed
by a State Board of Accountancy. The vast majority of States require
CPA candidates to be college graduates, but a few States substitute
a number of years of public accounting experience for a college
degree. As of early 2003, based on recommendations made by the
American Institute of Certified Public Accountants (AICPA), 42
States and the District of Columbia required CPA candidates to
complete 150 semester hours of college coursework—an additional 30
hours beyond the usual 4-year bachelor’s degree. Another five
States—Arizona, Minnesota, New Mexico, New York, and
Virginia—have adopted similar legislation that will become
effective between 2004 and 2009. Colorado, Delaware, New Hampshire,
and Vermont are the only States that do not require 150 semester
hours. Many schools have altered their curricula accordingly with
most programs offering masters degrees as part of the 150 hours, and
prospective accounting majors should carefully research accounting
curricula and the requirements of any States in which they hope to
become licensed.
All States use the four-part Uniform CPA Examination prepared by
the AICPA. The 2-day CPA examination is rigorous, and only about
one-quarter of those who take it each year passes every part they
attempt. Candidates are not required to pass all four parts at once,
but most States require candidates to pass at least two parts for
partial credit and to complete all four sections within a certain
period. Most States also require applicants for a CPA certificate to
have some accounting experience. In May 2004, the CPA exam will
become computerized and offered quarterly at various testing centers
throughout the United States.
The AICPA also offers members with valid CPA certificates the
option to receive the Accredited in Business Valuation (ABV),
Certified Information Technology Professional (CITP), or Personal
Financial Specialist (PFS) designations. The addition of these
designations to the CPA distinguishes those accountants with a
certain level of expertise in the nontraditional areas in which
accountants are practicing more frequently. The ABV designation
requires a written exam, as well as completion of a minimum of 10
business valuation projects that demonstrate a candidate’s
experience and competence. The CITP requires payment of a fee, a
written statement of intent, and the achievement of a set number of
points awarded for business experience and education. Those who do
not meet the required number of points may substitute a written
exam. Candidates for the PFS designation also must achieve a certain
level of points, based on experience and education, and must pass a
written exam and submit references.
Nearly all States require CPAs and other public accountants to
complete a certain number of hours of continuing professional
education before their licenses can be renewed. The professional
associations representing accountants sponsor numerous courses,
seminars, group study programs, and other forms of continuing
education.
Accountants and auditors also can seek to obtain other forms of
credentials from professional societies on a voluntary basis.
Voluntary certification can attest to professional competence in a
specialized field of accounting and auditing. It also can certify
that a recognized level of professional competence has been achieved
by accountants and auditors who have acquired some skills on the
job, without the formal education or public accounting work
experience needed to meet the rigorous standards required to take
the CPA examination.
The Institute of Management Accountants (IMA) confers the
Certified Management Accountant (CMA) designation upon applicants
who complete a bachelor’s degree or attain a minimum score on
specified graduate school entrance exams. Applicants, who must have
worked at least 2 years in management accounting, also must pass a
four-part examination, agree to meet continuing education
requirements, and comply with standards of professional conduct. The
CMA program is administered by the Institute of Certified Management
Accountants, an affiliate of the IMA.
Graduates from accredited colleges and universities who have
worked for 2 years as internal auditors and have passed a four-part
examination may earn the Certified Internal Auditor (CIA)
designation from the Institute of Internal Auditors (IIA). The IIA
recently implemented three new specialty
designations—Certification in Control Self-Assessment (CCSA),
Certified Government Auditing Professional (CGAP), and Certified
Financial Services Auditor (CFSA). Requirements are similar to those
of the CIA. The Information Systems Audit and Control Association
confers the Certified Information Systems Auditor (CISA) designation
upon candidates who pass an examination and have 5 years of
experience in auditing information systems. Auditing or
data-processing experience and a college education may be
substituted for up to 2 years of work experience in this program.
For instance, an internal auditor might be a CPA, CIA, and CISA.
The Accreditation Council for Accountancy and Taxation, a
satellite organization of the National Society of Public
Accountants, confers three designations—Accredited Business
Accountant (ABA), Accredited Tax Advisor (ATA), and Accredited Tax
Preparer (ATP)—on accountants specializing in tax preparation for
small- and medium-sized businesses. Candidates for the ABA must pass
an exam, while candidates for the ATA and ATP must complete the
required coursework and pass an exam. Often, a practitioner will
hold multiple licenses and designations.
The Association of Government Accountants grants the Certified
Government Financial Manager (CGFM) designation for accountants,
auditors, and other government financial personnel at the Federal,
State, and local levels. Candidates must have a minimum of a
bachelor’s degree, 24 hours of study in financial management, and
2 years’ experience in government, and must pass a series of three
exams. The exams cover topics in governmental environment;
governmental accounting, financial reporting, and budgeting; and
financial management and control.
Persons planning a career in accounting should have an aptitude
for mathematics and be able to analyze, compare, and interpret facts
and figures quickly. They must be able to clearly communicate both
written and verbally the results of their work to clients and
managers. Accountants and auditors must be good at working with
people, as well as with business systems and computers. At a
minimum, accountants should be familiar with basic accounting
software packages. Because financial decisions are made based on
their statements and services, accountants and auditors should have
high standards of integrity.
Capable accountants and auditors may 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 bookkeepers and
accounting clerks who meet the education and experience requirements
set by their employers, can obtain junior accounting positions and
advance to positions with more responsibilities by demonstrating
their accounting skills on the job.
Beginning public accountants usually start by assisting with work
for several clients. They may advance to positions with more
responsibility in 1 or 2 years, and to senior positions within
another few years. Those who excel may become supervisors, managers,
or partners; open their own public accounting firm; or transfer to
executive positions in management accounting or internal auditing in
private firms.
Management accountants often start as cost accountants, junior
internal auditors, or trainees for other accounting positions. As
they rise through the organization, they may advance to accounting
manager, chief cost accountant, budget director, or manager of
internal auditing. Some become controllers, treasurers, financial
vice presidents, chief financial officers, or corporation
presidents. Many senior corporation executives have a background in
accounting, internal auditing, or finance.
In general, public accountants, management accountants, and
internal auditors have much occupational mobility. Practitioners
often shift into management accounting or internal auditing from
public accounting, or between internal auditing and management
accounting. However, it is less common for accountants and auditors
to move from either management accounting or internal auditing into
public accounting.
Employment of accountants and auditors is expected to
grow
about as fast as the average for all occupations through the
year 2012. An increase in the number of businesses, changing
financial laws and regulations, and increased scrutiny of company
finances will drive growth. In addition to openings resulting from
growth, the need to replace accountants and auditors who retire or
transfer to other occupations will produce numerous job openings in
this large occupation.
As the economy grows, the number of business establishments will
increase, requiring more accountants and auditors to set up books,
prepare taxes, and provide management advice. As these businesses
grow, the volume and complexity of information developed by
accountants and auditors regarding costs, expenditures, and taxes
will increase as well. Increased need for accountants and auditors
will arise from changes in legislation related to taxes, financial
reporting standards, business investments, mergers, and other
financial matters. The growth of international business also has led
to more demand for accounting expertise and services related to
international trade and accounting rules, as well as to
international mergers and acquisitions. These trends should create
more jobs for accountants and auditors.
As a result of the recent accounting scandals, Federal
legislation was enacted to increase penalties, and make company
executives personally responsible for falsely reporting financial
information. These changes should lead to increased scrutiny of
company finances and accounting procedures, and should create
opportunities for accountants and auditors, particularly Certified
Public Accountants, to more thoroughly audit financial records. In
order to ensure finances comply with the law before public
accountants conduct audits, management accountants and internal
auditors will increasingly be needed to discover and eliminate
fraud. And, in an effort to make government agencies more efficient
and accountable, demand for government accountants should increase.
Increased awareness of financial crimes such as embezzlement,
bribery, and securities fraud will also increase the demand for
forensic accountants to detect illegal financial activity by
individuals, companies, and organized crime rings. Computer
technology has made these crimes easier to commit, and it is on the
rise. But, development of new computer software and electronic
surveillance technology has also made tracking down financial
criminals easier, thus increasing the ease and likelihood that
forensic accountants will discover their crimes. As success rates of
investigations grow, demand will also grow for forensic accountants.
The changing role of accountants and auditors also will spur job
growth, although this growth will be limited as a result of
financial scandals. In response to demand, some accountants were
offering more financial management and consulting services as they
assumed a greater advisory role and developed more sophisticated
accounting systems. Since Federal legislation now prohibits
accountants from providing nontraditional services to clients whose
books they audit, opportunities for accountants to do non-audit work
could be limited. However, accountants will still be able to advise
on other financial matters for clients that are not publicly traded
companies, and for nonaudit clients, but growth in these areas will
be slower than in the past. Also, due to the increasing popularity
of tax preparation firms and computer software, accountants will
shift away from tax preparation. As computer programs continue to
simplify some accounting-related tasks, clerical staff will
increasingly handle many routine calculations.
Overall, job opportunities for accountants and auditors should be
favorable. After most States instituted the 150-hour rule for CPAs,
enrollment in accounting programs declined; however, enrollment is
slowly beginning to grow again as more students are attracted to the
profession because of the attention from the accounting scandals.
Those who pursue a CPA should have excellent job prospects. However,
many accounting graduates are instead pursuing other certifications
such as the CMA and CIA, so competition could be greater in
management accounting and internal auditing than in public
accounting. Regardless of specialty, accountants and auditors who
have earned professional recognition through certification or
licensure should have the best job prospects. Applicants with a
master’s degree in accounting, or a master’s degree in business
administration with a concentration in accounting, also will have an
advantage. In the aftermath of the accounting scandals, professional
certification is even more important in order to ensure that
accountants’ credentials and ethics are sound.
Proficiency in accounting and auditing computer software, or
expertise in specialized areas such as international business,
specific industries, or current legislation, may be helpful in
landing certain accounting and auditing jobs. In addition, employers
increasingly seek applicants with strong interpersonal and
communication skills. Because many accountants work on teams with
others from different backgrounds, they must be able to communicate
accounting and financial information clearly and concisely.
Regardless of one’s qualifications, however, competition will
remain keen for the most prestigious jobs in major accounting and
business firms.
In 2002, the median wage and salary annual earnings of
accountants and auditors were $47,000. The middle half of the
occupation earned between $37,210 and $61,630. The top 10 percent of
accountants and auditors earned more than $82,730, and the bottom 10
percent earned less than $30,320. In 2002, median annual earnings in
the industries employing the largest numbers of accountants and
auditors were:
| Federal Government |
$51,070 |
| Accounting, tax preparation, bookkeeping,
and payroll services |
49,520 |
| Management of companies and enterprises |
49,110 |
| Local government |
44,690 |
| State government |
42,680 |
According to a salary survey conducted by the National
Association of Colleges and Employers, bachelor’s degree
candidates in accounting received starting offers averaging $40,647
a year in 2003; master’s degree candidates in accounting were
initially offered $42,241.
According to a 2003 salary survey conducted by Robert Half
International, a staffing services firm specializing in accounting
and finance, accountants and auditors with up to 1 year of
experience earned between $29,500 and $40,500. Those with 1 to 3
years of experience earned between $34,000 and $49,500. Senior
accountants and auditors earned between $41,000 and $61,500;
managers earned between $47,500 and $78,750; and directors of
accounting and auditing earned between $66,750 and $197,500 a year.
The variation in salaries reflects differences in size of firm,
location, level of education, and professional credentials.
In the Federal Government, the starting annual salary for junior
accountants and auditors was $23,442 in 2003. Candidates who had a
superior academic record might start at $29,037, while applicants
with a master’s degree or 2 years of professional experience
usually began at $35,519. Beginning salaries were slightly higher in
selected areas where the prevailing local pay level was higher.
Accountants employed by the Federal Government in nonsupervisory,
supervisory, and managerial positions averaged $69,370 a year in
2003; auditors averaged $73,247.
Source - Bureau of Labor Statistics
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