A wise man once said: “A person should not go to sleep at night until the debits equaled the credits.” That man was Luca Pacioli, a 15th century monk, mathematician and author of “Summa de Arithmetica, Geometria, Proportioni et Proportionalita,” where the basics of double-entry bookkeeping were first explained. Though the part about voluntary insomnia may have been a bit exaggerated, Pacioli’s quote underscores the importance of accountants not only during his time, but also in ours.
What Do Accountants Do?
As their name implies, accountants account for anything and everything that can be measured in monetary terms. Their job can be summed up as RCSI: recording financial transactions, classifying these transactions using a chart of accounts, summarizing all the data using financial statements and interpreting the same for their clients. Depending on their specialty, they can also prepare tax returns, investigate financial fraud, and perform other duties and responsibilities, which will be discussed in more detail later.
Is Accounting the Right Career for You?
According to a 2006 study published in The Accounting Educators’ Journal, people who have the ESTJ personality profile are the most likely to take up accounting in college. That’s because accounting requires you to be:
- Respectful of Rules. If you live and breathe rules, you’ll enjoy accounting. In order to be a good accountant, you have to be knowledgeable and always up-to-date on the latest accounting principles.
- Detail-Oriented. When you’re dealing with a ton of numerical data, errors are bound to happen. As an accountant, you should be able to spot and fix these as soon as possible.
- Organized. Then again, if you’re meticulous enough to keep the likes of custom cabinets for your files, it’s highly unlikely that you have to correct errors in the first place.
- Patient. Occasionally, you’ll have a client who’s organized enough to keep things like a decent billing and reporting system for different financial transactions. For the most part, though, expect to deal with situations like missing or destroyed documents, conflicting financial information and other things that make your job much harder than it should be.
- Logical. There are times when things just don’t make sense, no matter how extensive your skills and experience are. In these cases, you’ll have to rely on your sharpest instincts a la Sherlock Holmes, and decide for yourself the best course of action for the moment.
- Ethical. No matter how hairy things get, though, it’s best to stick to your morals. Otherwise, you’ll get involved in something like the Enron-Arthur Andersen fiasco, which was one of the reasons the Sarbanes-Oxley Act of 2002 exists.
- Technologically Savvy. It goes without saying, but knowledge on several types of accounting software will give you an advantage over your less tech-savvy competitors.
- People Savvy. There’s a reason public accounting firms are rarely one-man shows. Having – and knowing how to deal with – a team goes a long way in the field.
If you have all these qualities, congratulations: You’ll be a fine accountant. If not, but you’re still determined to be an accountant, you can always work harder than the rest and get around your weaknesses somehow.
Salary Outlook and Job Opportunities
To say that accountants have excellent job prospects is putting it mildly. The Bureau of Labor Statistics predicts that employment of accountants will grow by 13 percent from 2012 to 2022, due to the growing economy, increasing demand for stricter financial accountability and continued globalization. As you’ll see below, accountants of every stripe are compensated well for their respective expertise.
- Financial Accounting. As a financial accountant, you prepare reports for the likes of CEOs, banks, government agencies, stock investors and other bigwigs. If you want to be part of a Big 4 accounting firm, this is your ideal career path.
Average Salary (Median): $50,819
- Management/Managerial Accounting. Whereas financial accountants focus on past accounting information, management accountants focus on the present. The latter helps their clients make the best financial decisions for their company, given the relevant data.
Average Salary (Median): $52,975
- Auditing. Auditors are to financial accountants what editors are to writers. They check whether financial statements are accurate and compliant with best practices, based on random sampling methods.
Average Salary (Median): $51,750
- Tax Accounting. Tax accounting has its own unique set of challenges. For example, if you’re a tax accountant in, say, Los Angeles, you’ll have to follow a different set of rules from a tax accountant in NYC. Still, helping disorganized business owners sort out their taxes can be a fun and – dare I say it – lucrative career.
Average Salary (Median): $51,263
- Fund Accounting. If you’re interested in working with nonprofit organizations, try being a fund accountant. Here, you’ll be managing federal funds, fiduciary funds, restricted/unrestricted current funds and the like.
Average Salary (Median): $44,447
- Cost Accounting. As a cost accountant, your focus is on costs, particularly in the manufacturing sector. You’ll learn concepts like activity-based costing, cost-volume-profit analysis, lean accounting and throughput accounting.
Average Salary (Median): $51,235
- Forensic Accounting. Granted, forensic accounting isn’t anywhere near as glamorous as what you see on “CSI.” However, if you enjoy investigating anomalies in divorce settlements, insolvencies and securities frauds, this might be the field for you.
Average Salary (Median): $64,353
- Budget Analysis. Basically, budget analysts handle the organization of financial plans and the negotiation of projects for your clients. There’s a healthy demand for them in both public and private sectors, which more than compensates for the lack of glamour in the field.
Average Salary (Median): $55,481
These are just a few of the jobs you can land with an accounting degree. Whether you want to work for a corporation, a public accounting firm, the government or yourself, the possibilities are limited only by your imagination, resourcefulness and pluck.
As an accounting student, you’ll be required to take up basic business and economics courses. You’ll also have to study the following:
- Basic Accounting for Service Businesses
- Basic Accounting for Merchandising Businesses
- Accounting for Partnerships and Corporations
- Management Accounting
- Financial Accounting
- Cost Accounting
- Advanced Accounting
Assuming you’re able to complete all of the above, you can proceed to becoming a certified public accountant (CPA), certified management accountant (CMA) or certified internal auditor (CIA).
- Certified Public Accountant. Talk to anyone about being an accounting major, and chances are they’ll say: “Wow, so you want to be a CPA!” This isn’t surprising, since this certification is the most widely known in the accounting field. As a CPA, you can offer your services for individuals and businesses alike.
Generally, you become a CPA by completing a bachelor’s degree, earning a few years of work experience and taking a special set of exams. However, the requirements may differ according to the state where you live, so be sure to check this link before you proceed. (Website)
Average Salary (Median): $58,666
- Certified Management Accountant. As a management accountant, you’re valuable to any employer. As a certified management accountant, you’re at least 20 percent more valuable. That’s because CMAs are expected to be knowledgeable not just in financial management, but also in strategic management.
Unlike CPAs, CMAs aren’t required to have work experience. If you have a bachelor’s degree and the wherewithal to pass the necessary exams, you’re on the right track. (Website)
Average Salary (Median): $62,288
- Certified Internal Auditor. With a CIA title, you’ll demonstrate your competency and professionalism as an internal auditor to your employer. It’s the only internationally recognized certification in the field, after all. (Website)
Average Salary (Median): $51,842
When you’re an accountant, the business world is your oyster. If you’re willing to pour a lot of effort, push a lot of pencils and go beyond your comfort zone like never before, accounting will suit you.
Exploring careers in business? Be sure to check out the entire series of career exploration posts!
A Career in Real Estate
A Career in Marketing
A Career in Business Law
A Career in Finance
A Career in Accounting
A Career in Insurance
A Career in Supply Chain
A Career in Human Resources
A Career in Management
A Career in Sales
A Career in Consulting