ACCOUNTANT / AUDITOR
Many public accountants, or CPAs, concentrate on tax matters, such as preparing individual income tax returns and advising companies of the tax advantages and disadvantages of certain business decisions. Others concentrate on consulting and offer advice on matters such as compensation or employee health care benefits; the design of accounting and data processing systems; and controls to safeguard assets. Some specialize in forensic accounting—investigating and interpreting bankruptcies and other complex financial transactions. Still others work primarily in auditing—examining a client's financial statements and reporting to investors and authorities that they have been prepared and reported correctly.
Increasing numbers of accounting graduates are working in private corporations. They are usually part of executive teams involved in strategic planning or new product development. Management accountants analyze and interpret the financial information corporate executives need to make sound business decisions. They also prepare financial reports for non-management groups, including stockholders, creditors, regulatory agencies and tax authorities. Within accounting departments, they may work in financial analysis, planning and budgeting, cost accounting and other areas.
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 health care auditors.
Accountants employed by Federal, State, and local governments see that revenues are received and expenditures are made in accordance with laws and regulations. Many persons with an accounting background work for the Federal Government as Internal Revenue Service agents or in financial management, financial institution examination, and budget analysis and administration.
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 and managers, bank officers, actuaries, underwriters, tax collectors and revenue agents, FBI special agents, securities sales representatives and purchasing agents.
Computers are widely used in accounting and auditing. A growing number of accountants and auditors have extensive computer skills and specialize in correcting problems with software or developing software to meet unique data needs. With the aid of special software packages, accountants summarize transactions in standard formats for financial records, or organize data in special formats for financial analysis. These accounting packages greatly reduce the amount of tedious manual work associated with data and records; some packages require few specialized computer skills, while others require formal training. Personal and laptop computers enable accountants and auditors in all fields to use their clients' computer system and to extract information from large mainframe computers. Internal auditors may recommend controls for their organization's computer system to ensure the reliability of the system and the integrity of the data.
Most accountant and internal auditor positions require at least a bachelor's degree in accounting or a related field. Based on recommendations made by the American Institute of Certified Public Accountants, a small number of States currently require CPA candidates to complete 150 semester hours of college coursework—an additional 30 hours beyond the usual 4-year bachelor's degree—and many more States are expected to introduce this requirement in the future. Most schools have altered their curricula accordingly, and prospective accounting majors should carefully research accounting curricula and the requirements for any States in which they hope to become licensed before enrolling. Some employers prefer applicants with a master's degree in accounting, or a master's degree in business administration with a concentration in accounting. Most employers also prefer applicants who are familiar with computers and their applications in accounting and internal auditing.
For beginning accounting and auditing positions in the Federal Government, 4 years of college (including 24 semester hours in accounting or auditing) or an equivalent combination of education and experience is required.
Professional recognition through certification or licensure provides a distinct advantage in the job market. All CPA's must have a certificate and the partners in their firm must have a license issued by a State board of accountancy. The vast majority of States require CPA candidates to be college graduates, but a few States substitute a certain number of years of public accounting experience for the educational requirement. As indicated earlier, a growing number of States require 150 hours of coursework; the composition of the additional 30 hours is unspecified by most States.
Nearly all States require CPA's 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.
Professional societies bestow other forms of credentials on a voluntary basis. Voluntary certification can attest to professional competence in a specialized field of accounting and auditing. It can also certify that a recognized level of professional competence has been achieved by accountants and auditors who 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. Employers are increasingly seeking applicants with these credentials.
The Institute of Management Accountants (IMA) confers the Certified Management Accountant (CMA) designation upon applicants who complete a bachelor's degree, although a minimum score on specified graduate school entrance exams can be substituted for a bachelor's degree; pass a four-part examination; agree to meet continuing education requirements; comply with standards of professional conduct; and have at least 2 years' work in management accounting. The CMA program is administered through the Institute of Certified Management Accountants, an affiliate of the IMA.
The Institute of Internal Auditors confers the designation Certified Internal Auditor (CIA) to graduates from accredited colleges and universities who have completed 2 years' work in internal auditing, and who have passed a four-part examination. The Information Systems Audit and Control Association confers the designation Certified Information Systems Auditor (CISA) upon candidates who pass an examination, and who have 5 years of experience in auditing electronic data processing systems. However, auditing or data processing experience and college education may be substituted for up to 3 years. The Accreditation Council for Accountancy and Taxation, a satellite organization of the National Society of Public Accountants, confers three designations—Accredited in Accountancy (AA), Accredited Tax Advisor (ATA), and Accredited Tax Preparer (ATP). Candidates for the AA must pass an exam, while candidates for the ATA and ATP must complete the required coursework and pass an exam. Other organizations, such as the National Association of Certified Fraud Examiners and the Bank Administration Institute, confer specialized auditing designations. It is not uncommon for a practitioner to hold multiple licenses and designations. For instance, an internal auditor might be a CPA, CIA, and CISA.
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, partners, open their own public accounting firms, or transfer to executive positions in management accounting or internal auditing in private firms.
Beginning management accountants often start as cost accountants, junior internal auditors, or as 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.
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 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 more responsible positions by demonstrating their accounting skills on the job.
According to a 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 $25,000 and $39,400 in 1997. Those with 1 to 3 years of experience earned between $27,000 and $46,600. Senior accountants and auditors earned between $34,300 and $57,800; managers earned between $40,000 and $81,900; and directors of accounting and auditing earned between $54,800 and $109,800 a year. The variation in salaries reflects differences in size of firm, location, level of education and professional credentials.
Accountants and auditors who have earned professional recognition through certification or licensure should have the best job prospects. For example, CPA's should continue to enjoy a wide range of job opportunities, especially as more States enact the 150-hour requirement, making it more difficult to obtain this certification. Similarly, CMA's should be in demand as their management advice is increasingly sought. Applicants with a master's degree in accounting, or a master's degree in business administration with a concentration in accounting, may also have an advantage in the job market. Familiarity with accounting and auditing computer software, or expertise in specialized areas such as international business, specific industries, or current legislation, may also be helpful in landing certain accounting and auditing jobs. In addition, employers increasingly seek well rounded applicants with strong interpersonal and communication skills. Regardless of one's qualifications, however, competition will remain keen for the most prestigious jobs—those with major accounting and business firms.
Employment of accountants and auditors is expected to grow about as fast as the national average for all occupations through the year 2006. The need to replace accountants and auditors who retire or transfer to other occupations will produce thousands of additional job openings annually, reflecting the large size of this occupation.
Accountants and auditors held over 1 million jobs in 1996. They worked throughout private industry and government, but about one-third worked on salary for accounting, auditing, and bookkeeping firms, or were self-employed.
Many accountants and auditors were unlicensed management accountants, internal auditors, or government accountants and auditors. However, many are State-licensed Certified Public Accountants (CPA's), Public Accountants (PA's), Registered Public Accountants (RPA's), and Accounting Practitioners (AP's).
Most accountants and auditors work in urban areas, in which public accounting firms and central or regional offices of businesses are concentrated.
Many 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 as salaried accountants for private industry or government.
Professional recognition through certification or licensure, a master's degree, familiarity with accounting and auditing computer software, or specialized expertise provide an advantage in the job market. Competition will remain keen for the most prestigious jobs—those with major accounting and business firms.