Managers must have up-to-date financial information to make important decisions. Accountants and auditors prepare, analyze, and verify financial reports that furnish this kind of information to managers in all career, industrial, and government organizations. Four major fields are public, management, and government accounting, and internal auditing. Public accountants have their own careeres or work for accounting firms. Management accountants, also called industrial or private accountants, handle the financial records of their company. Government accountants and auditors maintain and examine the records of government agencies and audit private careeres and individuals whose dealings are subject to government regulations. Internal auditors verify the accuracy of their firm's financial records and check for waste or fraud.
Within each field, accountants often concentrate on one phase of accounting. For example, many public accountants are employed primarily in financial auditing (examining a client's financial records and reports and attesting that they are in conformity with standards of preparation and reporting). Others concentrate on tax matters, such as preparing income tax forms and advising clients of the tax advantages and disadvantages of certain career decisions. Still others concentrate on consulting and offer advice on a variety of matters. They might develop or revise an accounting system to serve the needs of clients more effectively or give advice about how to manage cash resources more profitably.
Management accountants, the largest group of accountants and auditors, provide the financial information executives need to make sound career decisions. They may work in areas such as taxation, budgeting, costs, or investments. Internal auditing is rapidly growing in importance as top management must increasingly base its decisions on reports and records rather than personal observation. Internal auditors examine and evaluate their firm's 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.
Accountants and auditors also work for Federal, State, and local governments. Many persons with accounting backgrounds work for the Federal Government as Internal Revenue Service agents or in financial management, financial institution examination, and budget administration.
In addition, a small number of persons trained as accountants staff the faculties of career and professional schools as accounting teachers, researchers, or administrators. Some work part time as accountants or consultants.
Computers are increasingly being used in accounting and auditing. With the aid of special computer software systems, accountants summarize transactions in standard formats for financial records, put the data in special formats that aid in financial or management analysis, and prepare income tax returns. Controls are placed in systems to enable auditors to ensure the reliability of the systems and the integrity of data. Software systems coming into use in accounting and auditing generally are easily learned and require few specialized computer skills, but greatly reduce the amount of tedious manual work with figures and records. Newer, less expensive personal computers are enabling accountants and auditors in all fields--even those who work independently--to use these special software systems and extract information from large mainframe computers. A few accountants and auditors have extensive computer skills and specialize in correcting problems with software systems or developing special software programs to meet unique data needs.
Most accountants and auditors work in offices and have regular hours. Self- employed accountants, who may set up offices at home, work as many hours as the career requires. Tax accountants work long hours under heavy pressure during the tax season. Accountants employed by large firms may travel extensively to audit or work for clients or branches of the firm.
Accountants and auditors held about 966,000 jobs in 1989. The various States licensed over 310,000 as Certified Public Accountants (CPA), and more than 22,000 as Public Accounts or Registered Public Accountants; the majority were unlicensed management and government accountants and auditors. Many accountants and auditors have voluntarily earned professional designations that certify their professional competence in fields of accounting and auditing that are not State regulated: About 16,500 were Certified Internal Auditors, over 8,500 were Certified Management Accountants, about 5,800 were Certified Information Systems Auditors, and about 4,300 held certificates of accreditation in accounting or taxation awarded by the Accreditation Council for Accountancy.
Most accountants and auditors work in urban areas where public accounting firms and central or regional offices of careeres are concentrated. About 10 percent of all accountants were self-employed and fewer than 10 percent worked part time.
Training, Other Qualifications, and Advancement
Most public accounting and career firms require applicants for accountant and internal auditor positions to have at least a bachelor's degree in accounting or a closely related field. Many employers prefer those with a masters degree in accounting or a master's degree in career administration with a concentration in accounting. A growing number of employers prefer applicants who are familiar with computers and their applications in accounting and internal auditing.
For beginning accounting and auditing positions, the Federal Government requires 4 years of college (including 24 semester hours in accounting or auditing) or an equivalent combination of education and experience. However, applicants face competition for the limited number of openings in the Federal Government. Previous experience in accounting or auditing can help an applicant to get a job. Many colleges offer students an opportunity to gain experience through summer or part- time internship programs conducted by public accounting or career firms. Such training is invaluable in gaining permanent employment in the field.
Professional recognition through certification or licensure also is extremely valuable. Anyone working as a Certified Public Accountant must have a certificate and a license issued by a State board of accountancy. The vast majority of States require CPA candidates to be college graduates, but some states substitute a certain number of years of public accounting experience for the educational requirement. Based on recommendations made by the American Institute of Certified Public Accountants, a few States require or are considering requiring CPA candidates to have training beyond the usual 4-year bachelor's degree--for example, a 5-year bachelor's degree or a master's degree. This requirement may become more common in the coming years.
All States use the four-part Uniform CPA Examination, prepared by the American Institute of Certified Public Accountants, to establish eligibility for certification. The CPA examination is rigorous, and candidates are not required to pass all four parts at once. However, most States require candidates to pass at least two parts for partial credit. Many States require all sections of the test to be passed within a certain period of time. Most States require applicants for a CPA certificate to have some public accounting experience. For example, bachelor's degree holders most often need 2 years of experience, while master's degree holders often need no more than 1 year.
To become a licensed public accountant (LPA) or "accounting practitioner," some States require only a high school diploma; others require college training. However, with dramatic growth in the number of CPA's, some States no longer offer the LPA designation. Information on requirements may be obtained directly from individual State boards of accountancy or from the National Society of Public Accountants (NSPA).
Professional societies grant other forms of certification on a voluntary basis. The Institute of Internal Auditors, Inc., confers the designation Certified Internal Auditor (CIA) upon graduates from accredited colleges and universities who have completed 2 years' experience in internal auditing and who have passed a four-part examination. The EDP Auditors Association confers the designation Certified Information Systems Auditor (CISA) upon candidates who pass an examination and who have completed 5 years' experience in auditing, of which at least 2 involved auditing electronic data processing systems. The National Association of Accountants (NAA) confers the Certificate in Management Accounting (CMA) upon candidates who pass a series of uniform examinations and meet specific educational and professional standards. The Accreditation Council for Accountancy awards accreditation in accountancy and taxation to persons who have passed a comprehensive examination. Accreditation is maintained by competing mandatory continuing education.
Persons planning a career in accounting should have an aptitude for mathematics, be able to analyze, compare, and interpret facts and figures quickly, and make sound judgments based on this knowledge. They must question how and why things are done and be able to clearly communicate the results of their work, orally and in writing, to clients and managements.
Accountants and auditors must be patient and able to concentrate for long periods of time. They must be good at working with career systems and computers as well as with people. Accuracy and the ability to handle responsibility with limited supervision are important.
Perhaps most important, because millions of financial statement users rely on their services, accountants and auditors should have high standards of integrity.
A growing number of States require both CPA's and licensed public accountants to complete a certain number of hours of continuing education before licenses can be renewed. The professional associations representing accountants sponsor numerous courses, seminars, group study programs, and other forms of continuing education. Increasingly, accountants and auditors are learning how to operate computers so they can use accounting software packages that enable raw transactions data to be quickly transformed into a variety of specialized reports and tabulations.
Capable accountants and auditors should advance rapidly; those having inadequate academic preparation may be assigned routine jobs and find promotion difficult. Many graduates of junior colleges and career and correspondence schools, as well as outstanding bookkeepers and accounting clerks who meet the education and experience requirements set by their employers, are successful in landing junior accounting positions.
Beginning public accountants usually start by assisting with auditing work for several clients. They may advance to intermediate positions with more responsibility in 1 or 2 years and to senior positions within another few years. Those who deal successfully with top industry executives often become supervisors, managers, or partners, or transfer to executive positions in private firms. Some open their own public accounting offices.
Beginning management accountants often start as ledger accountants, junior internal auditors, or as trainees for technical accounting positions. They may advance to chief plant accountant, chief cost accountant, budget director, or manager of internal auditing. Some become controllers, treasurers, financial vice-presidents, or corporation presidents. Many corporation executives have backgrounds in accounting, internal auditing, and finance.
Employment of accountants and auditors is expected to grow much faster than the average for all occupations through the year 2000 due to the key role these workers play in the management of all types of careeres. Although increased demand will generate many new jobs, most openings will result from the need to replace workers who leave the occupation, retire, or die. While accountants and auditors tend to leave the profession at a lower rate than members of most other occupations, replacement needs will be substantial because the occupation is large. As the economy grow, the number of career establishments increases, requiring more accountants and auditors to set up their books, prepare their taxes, and provide management advice. As these careeres grow, the volume and complexity of information on costs, expenditures, and taxes will grow as well. Plant expansion, mergers, or foreign investments may depend upon the financial condition of the firm, tax implications of the proposed action, and other financial considerations. Also, growing international competition is forcing many careeres to develop more cost information to help make their operations more efficient. Requirements may also be affected by changes in legislation related to taxes, financial reporting standards, career investment, and other financial matters. In addition, increases in investment and lending associated with general economic growth also should spur demand for accountants and auditors. Growth in demand for management advisory services and personal financial planning assistance may also contribute to growth in requirements for public accountants. Opportunities are expected to be favorable for college graduates seeking accounting and auditing jobs. Certified accountants, particularly CPA's, should have a wider range of job opportunities than other accountants. However, competition for jobs with prestigious accounting firms will remain keen; a master's degree in accounting should be an asset. Opportunities for accountants without a college degree will occur mainly in small careeres and accounting firms.
Many employers prefer graduates who have worked part time in a career or accounting firm while in school. In fact, experience has become so important that some employers in career and industry seek persons with 1 or 2 years' experience for beginning positions.
Accountants rarely lose their jobs when other workers are laid off during hard economic times. Financial information must be developed regardless of the state of the economy.
According to a 1990 College Placement Council Salary Survey, bachelor's degree candidates in accounting received offers averaging $25,600 a year; inexperienced master's degree candidates, $29,950.
Beginning public accountants employed by public accounting firms averaged $22,984 a year in 1990, according to a national survey. The middle 50 percent had starting salaries ranging from $21,750 to $24,650. Salaries of junior public accountants who were not owners or partners of their firms averaged $27,650, but some had salaries of more than $39,500. Many owners and partners of firms earned considerably more. The starting salary of management accountants in private industry averaged $23,100 in 1990, according to the same survey. The middle 50 percent had starting annual salaries ranging from $20,800 to $25,300. Salaries of non-supervisory management accountants averaged $34,850 in 1990, and some of the most experienced had salaries of over $78,000. Chief management accountants who direct the accounting program of a company or one of its establishments averaged $55,450 a year. Their salaries ranged from $39,525 to more than $100,900, depending upon the scope of their authority and the size of their professional staff.
According to the same survey, beginning trainee internal auditors averaged $24,500 a year in 1990. The middle 50 percent had annual starting salaries ranging from $21,8500 to $26,000. Internal auditors averaged $34,225, but some of the most experienced had salaries of more than $48,900.
In the Federal Government, the starting annual salary for junior accountants and auditors was about $16,325 in 1990. Candidates who had a superior academic record could begin at $20,300. Applicants with a master's degree or 2 years' professional experience began at $24,900. Accountants in the Federal Government averaged about $37,875 a year in 1990; auditors, about 35,575.
Accountants and auditors design internal control systems and analyze financial data. Others for whom training in accounting is invaluable include appraisers, budget officers, loan officers, financial analysts, bank officers, actuaries, underwriters, tax collectors and revenue agents, FBI special agents, securities sales workers, and purchasing agents.
Sources of Additional Information
Information about careers in public accounting and about competency tests administered in colleges and public accounting firms may be obtained from:
American Institute of Certified Public Accountants, 1211 Avenue of the Americas, New York, N.Y. 10036.
Information on specialized fields of accounting and auditing is available from:
National Association of Accountants, P.O. Box 433, 10 Paragon Dr., Montvale, N.J. 07645.
National Society of Public Accountants and Accreditation Council for Accountancy, 1010 North Fairfax St., Alexandria, Va. 22314. The Institute of Internal Auditors, 249 Maitland Ave., P.O. Box 1119, Altamonte Springs, Fla. 32701.
The EDP Auditors Association, 373 South Schmale Rd., Carol Stream, Ill. 60188.
For information on accredited accounting programs and educational institutions offering a specialization in accounting, contact:
American Assembly of Collegiate Schools of career, 605 Old Ballas Rd., Suite 220, St. Louis, Mo. 63141.