Education and Training: College
Salary: Median—$50,770 per year
Employment Outlook: Very good
Definition and Nature of the Work
Businesses have money coming in—income—and money going out—expenditures. Records must be kept of all this money. Companies must keep accurate records of their costs and their profits and losses to satisfy legal requirements and appease shareholders. Accurate financial records also help business people to see whether they are using their money efficiently. Management accountants, often referred to as corporate accountants or private accountants, preside over the financial record keeping of a business. They keep records of and analyze all the company's financial data such as revenue, income, taxes owed, and the amount of cash a company has. They prepare financial statements such as balance sheets, cash-flow statements, and income statements. They also present additional reports to senior managers so that they can make important decisions. In addition, management accountants supervise record-keeping departments, such as bookkeeping and data processing.
Management accountants often specialize in one area of accounting. Tax accountants keep track of how much tax a company owes local, state, and federal governments. They also look into all the ways a company can save money on its taxes through deductions and tax shelters. At the beginning of each year they compile all their tax data from the previous year and prepare and file returns. Cost accountants determine the exact cost of producing a product. Once the costs are known, accountants can suggest a selling price for the product that will recover costs and provide a profit. Cost accountants also try to identify ways to control production costs to keep them as low as possible. Budget accountants plan budgets for their firms and agencies. They plan expenditures so that money is used efficiently. They work with cost accountants to keep expenditures low. They analyze the budget on a regular basis to ensure that the company is on track financially and make budget recommendations if the company is not.
Education and Training Requirements
A person must have a degree in accounting to become a management accountant. Interested individuals should begin to prepare in high school by taking math courses. In college they should follow an organized program of courses to build a well-rounded knowledge of accounting. Many employers prefer to hire people with a master's degree in accounting, but some firms hire people with an undergraduate accounting degree directly out of college. However, a master's program gives a person a chance to develop a special area of interest, such as cost or tax accounting.
While certification is an advantage for management accountants, it is not al ways a necessity. The most widely accepted is the Certified Public Accountant (CPA) designation. The CPA designation is awarded to accountants who pass an examination given by the state board of accountancy. All states use the fourpart Uniform CPA Examination issued by the American Institute of Certified Public Accountants (AICPA). The exam lasts for two days and typically has a pass rate of only 25 percent. Before candidates can take the exam, most states require that they have 150 hours of college-level coursework, which is the equivalent of a master's degree and an undergraduate degree.
Getting the Job
A college or graduate school placement office can help a student find a job in management accounting. Many employers send representatives to college campuses to recruit accountants. Interested individuals can also contact business and industrial firms directly. If individuals are interested in government work, they should arrange to take the necessary civil service examination. Candidates can check the classified ads of their local newspapers and Internet job banks for openings in all areas of accounting. Employment agencies that specialize in placing professional workers may offer job leads.
Advancement Possibilities and Employment Outlook
Management accountants have many opportunities to advance because their work is essential to the operation of any business or agency. Management accountants can start in junior positions assisting experienced accountants. Then they can advance to more responsible jobs in cost accounting, tax accounting, or systems accounting. Some accountants become supervisors of large bookkeeping departments. Others become the chief auditors or chief budget accountants of a company. A few go on to become treasurers or controllers.
According to the U.S. Bureau of Labor Statistics, employment of accountants was expected to increase faster than the average for all professions through the year 2014. As the economy and businesses continue to grow more complex, more accountants will be needed to keep track of company finances and tax regulations. In addition, the continued globalization of big businesses will create a demand for accountants who understand international accounting rules. After the accounting scandals at large corporations at the turn of the twenty-first century, there is increasing pressure on businesses and government agencies to improve their accounting procedures, which should also lead to more opportunities for accountants.
Accountants have frequent contact with people on various levels of their organizations. They usually work thirty-five to forty hours per week. However, they may have to work extra hours during the months before taxes or annual reports are due. Accountants who work for the government may have to travel often.
Earnings and Benefits
Accountants and auditors in general earned a median yearly salary of $50,770 in 2004, according to the Bureau of Labor Statistics. Earnings vary somewhat between accounting specialties. Salary.com estimated that mid-level cost accountants made $50,966 per year in 2006, and mid-level tax accountants made $53,964 per year. Entry-level accountants made much less. A 2005 salary survey conducted by staffing services firm Robert Half International revealed that accountants and auditors with one year of experience earned between $28,250 and $45,000 per year. Accountants usually receive paid holidays and vacations, health and life insurance, and pension plans.
Where to Go for More Information
American Institute of Certified Public Accountants
1211 Avenue of the Americas
New York, NY 10036
American Society of Women Accountants
8405 Greensboro Dr., Ste. 800
McLean, VA 22102
Institute of Management Accountants
10 Paragon Dr.
Montvale, NJ 07645-1718
National Society of Accountants
1010 N. Fairfax St.
Alexandria, VA 22314