Accounting Overview

Accounting Overview

The accounting industry has much to offer in terms of opportunities, professional development, and exciting career paths. To be successful in an accounting position one must possess strong analytical abilities, be detailed-oriented, and have the ability to work very quickly and adeptly with numbers. Moreover, those who are the most successful possess not only strong analytical abilities, but also the
1 This handout is prepared with the direct assistance of “Vault Career Guide to Accounting,” and various other sources. For more information about a career in accounting, please refer to Kresge Database.

ability to synthesize, interpret and develop applicable business strategies utilizing financial data. Thus, a career in accounting offers its professionals the opportunity to challenge themselves, work closely analyzing financial data and provide significant value-add to corporations, governments and organizations around the world.

A career in accounting can entail many different specific job functions ranging from an audit or tax-consulting career with a public accounting firm, to an accounting position with an industrial company, to a position with the Government Accounting Office or a non-profit organization.
 
Types of Accounting:
As noted above, accounting organizations provide a range of services. Traditionally, the two primary services provided are audit and tax. However, many accounting firms have grown their advisor services to offer: corporate finance, risk management, transaction services, business process outsourcing, people and change consulting, IT advising, and personal financial planning.

- Audit: An auditor examines the financial statements of a company or organization and independently certifies the statements are valid, accurate, and relevant. Additionally, an auditor often also provides advisory services such as recommending ways to improve profitability, etc.

- Tax: Accountants who provide tax services primarily create strategies to minimize tax liabilities for their clients. Additionally, they prepare tax returns, advise on tax laws, assure clients tax law compliance, etc.

- Advisor: The advisor role within public accounting serves to analyze key data issues, patterns and trends to identify implications, and improve efficiency and effectiveness for clients. The division of specialty that fall within the advisor line of service differs among the firms.

Types of Accountants:

- Public Accountants: Public accountants generally work for a public accounting firm (for example: Ernst & Young) and provide accounting services to companies, governments, etc. Large public accounting firms provide the range of services discussed above in “Types of Accounting,” and because public companies are required to have yearly audits, a large part of public accounting firms’ business is providing auditing services to public companies.

- Private Accountants: Private accountants work directly for a company, government or non-profit organization. They receive their paycheck from the organization for which they are providing accounting services (for example: Internal Accountant at Kraft Foods). Generally, these accountants prepare the financial statements for the public accountants to audit and certify. Additionally, private accountants may also prepare their company’s tax statements, consult its management on changing accounting principles and ensure the financial integrity of the company’s business transactions.
 
Changes in the Field

While students’ interest in accounting related fields ebbs and flows depending on the economy, a career in accounting has long been considered “recession proof” and offers significant job security. In 2008, Forbes ranked Accounting Executive #4 and Accounting Staff #5 in its list of “10 Most Recession Proof Jobs.” Additionally, the U.S. Bureau of Labor Statistics ranked Accountants and Auditors in the Top 20 Occupations with the most demand for 2006-2016.

Accountants are especially in demand when the economy is in a downturn. This is because in times of economic uncertainty the public becomes distrustful of current accounting and reporting systems, leading to changes in regulation and accounting practices. The collapse of companies such as Enron and Worldcom led to the passage of the Sarbanes-Oxley Act of 2002. The SOX Act enhanced accounting standards for corporations and those auditing corporations and organizations—leading to increased demand for exceptional accountants. With the inception of SOX, public accounting firms began to divest their consulting services to more easily comply with the tighter regulatory scrutiny. However, firms have recently begun to rapidly rebuild their consulting arms and expand hiring to BBAs again. The recent financial crisis calls for even greater accounting scrutiny and stronger accounting standards and offers those entering the accounting field immense potential for an exciting, promising and challenging career.

The median base compensation for the Ross BBAs entering the accounting field in 2010 was $55, 000. At the Ross School of Business, the employers of the highest number of BBAs have consistently included the “Big 4” public accounting firms—Deloitte, Ernst & Young, KPMG, and PricewaterhouseCoopers, as well as mid-tier firms such as BDO, The Rehman Group, and Plante & Moran. In addition to the audit and tax positions available at the public accounting firms, several students each year go to work for industrial employers as accountants and financial analysts.

Masters in Accounting

In most states, only licensed Certified Public Accountants (CPAs) may provide qualified public opinions and audits on financial statements. In order to qualify for a CPA license, one must fulfill the education and work experience requirements, and pass the Uniform Certified Public Accountant Examination. Education requirements vary b state, but in most states, 150 credit hours are required to sit for the Certified Public Accounting Examination. Ross students most commonly meet this requirement through a fifth year of education, such as the Masters of Accounting program, at Ross or another institution.
For more information about University of Michigan’s MAcc program, please visit the website: http://www.bus.umich.edu/Academics/MAccProgram/

Source : http://www.bus.umich.edu/StudentCareerServices/resources/CPAccounting.pdf

CONCLUSION :
accounting is a process to identify, measure and report economic information, to allow for assessment and decisions clearly and firmly for those who use the information. The main purpose of accounting is to present the economic information of an economic entity to the parties concerned.