Education and Training: College
Salary: Median—$50,770 per year
Employment Outlook: Very good
Definition and Nature of the Work
Accountants are experts at preparing and analyzing financial reports. These reports include balance sheets, income and loss statements, and tax returns. Public accountants work for firms that offer their services to the public on a fee basis. Accounting firms may be retained by individuals who need help with their tax returns or by large corporations that need help setting up accounting systems. Some public accounting firms are small partnerships. Others are large companies with offices in many cities. Some public accountants are self-employed.
Businesses and individuals have money coming in—income—and money going out—expenditures. Records must be kept of all this money. Some individuals have relatively simple accounting problems, but businesses have a more complicated set of accounts. Companies must keep accurate records of their costs and their profits and losses to satisfy legal requirements. Accurate financial records also help business people to see whether they are using their money efficiently.
Public accountants divide their time among their clients. They travel to the customer's office or store to audit (check the accuracy of) the company's record keeping. Public accountants prepare reports, such as quarterly earnings statements. They also see that records are kept for tax purposes and that a firm's tax returns are filled out properly. Companies that do not employ their own accountants retain public accountants to keep their accounts. Even large firms that have their own accountants hire public accountants on a consulting basis to handle special problems. Public accountants can give companies independent, unbiased advice concerning their finances. Public accountants are also hired to prepare annual reports that are presented to the stockholders of corporations. These reports show the state of a company's finances to the people who own stock in the company.
Public accountants must be familiar with the tax laws concerning their clients' professions or businesses. They must be able to communicate well with their clients. Sometimes public accountants discuss the records they prepare with government auditors or Internal Revenue Service officials.
Education and Training Requirements
A person should have a degree in accounting if he or she wants to become a public 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 public accounting firms 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.
Public accounting firms usually require their accountants to become certified by passing an examination given by the board of accountancy in each state. All states use the four-part 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. Many firms hire new graduates as junior public accountants to assist certified public accountants (CPAs). Junior accountants learn on the job. They also spend a good deal of time studying on their own or through coursework to prepare for the CPA test. Even after certification, accountants must continue to study and take courses to keep up to date on new tax laws or accounting techniques, such as computerized record keeping.
Getting the Job
A college placement office can help a student find a job in a public accounting firm. Many large firms send recruiters to college campuses to look for qualified graduates. Candidates can also apply directly to public accounting firms in their area. Private employment agencies that specialize in placing professional workers may offer job leads. Interested individuals should also check the classified ads of their local newspaper and job banks on the Internet.
Advancement Possibilities and Employment Outlook
Accountants can advance rapidly after they have passed their CPA exam. As they become more experienced, they are given greater responsibility and become senior accountants. Some accountants become supervisors or partners in their firms. Other accountants open their own public accounting firms.
According to the Bureau of Labor Statistics, employment of public accountants was expected to increase at a rate 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 that understand international accounting rules. After the accounting scandals at large corporations at the turn of the twenty-first century, there has been increasing pressure on businesses and government agencies to improve their accounting procedures, which should also lead to more opportunities for accountants. CPAs and accountants familiar with computer applications in accounting and internal auditing will have the best opportunities.
Public accountants usually work thirty-five to forty hours per week. During the tax season, which lasts from January 2 to April 15, when taxes are due, many public accountants work long hours preparing tax returns for individuals and companies. The job involves much contact with customers and considerable travel from one customer's office to the next. Accountants must be patient and accurate, because their job involves details and numbers.
Where to Go for More Information
American Institute of Certified Public Accountants
1211 Avenue of the Americas
New York, NY 10036
National Association of State Boards Accountancy
150 4th Ave., Ste. 700
Nashville, TN 37219
National Society of Accountants
1010 N. Fairfax St.
Alexandria, VA 22314
Earnings and Benefits
Accountants and auditors in general earned a median annual salary of $50,770 in 2004, according to the Bureau of Labor Statistics. A 2006 salary survey conducted by staffing accounting services firm Robert Half International revealed that the yearly salaries of public accountants with one to three years' experience averaged between $35,500 and $47,000 in a small accounting firm and between $42,750 and $60,000 in a large firm. Starting salaries for partners in public accounting firms came in around $175,000 per year. Accountants generally receive benefits, including paid vacations, health and life insurance, and pension plans.