Are you interested in a career in accounting? Learn about your degree options in the field.
The American Institute of Certified Public Accountants or AICPA defines accounting as “the service activity that provides quantitative information, primarily financial in nature, about economic activities that is intended to be useful in making economic decisions—making reasoned choices among alternative courses of action. As far back as 1494 the importance of accounting to the success of a business was known. In a book on mathematics published that year and written by the Franciscan monk, Luca Paciolo, the author cites three things any successful merchant must have. The three things are sufficient cash or credit, an accounting system to track how he is doing, and a good bookkeeper to operate the system.” (Source: Inc.com)
At times, it is referred to as the “language of business” because the discipline is the fundamental tool that monitors business endeavors. Through accounting, entrepreneurs and corporations record, report and analyze transactions and economic activities affecting the enterprise. Accounting documents multiple facets of the company’s monetary performance. These include capital expenditures, taxes, payroll costs, revenues, equity of shareholders, and other financial commitments.
Accounting is also described as a management information system. It collects and processes data deemed valuable for decision makers. This relates to planning and regulation of activities in enterprises. The cycle in data processing includes the following:
- Entirety of functions related to monitoring financial information
- Data collection and recording
- Classification of statistics
- Computation and Summarizing of this data
- Storage of results
The final output is circulated to internal and external publics like investors, employees and creditors in the form of a financial statement.
Aside from simple bookkeeping, accountants perform complicated responsibilities like making payroll reports, financial information and fraud auditing to shareholders. These financial experts help laypeople understand spending and profitability. An accounting career can be lucrative with those in the top 10 percent getting paid an average of $111,510 annually based on the Bureau of Labor Statistics reports. The industry is expected to grow faster at a rate of 13 percent and generate more than 1.4 million job opportunities by 2022.
Accounting graduates have four major options in terms of careers:
- Public accountants work for government, private personalities, profit organizations, and non-profit associations. The tasks are more of consulting, counseling and auditing.
- Government accountants have the option to render services for federal, state or local agencies. The work often consists of maintenance of revenues and expenses records. Those in the federal branch are usually assigned with the Internal Revenue Service. Otherwise, jobs are available in budget analysis, general accounting and financial management.
- Management accountants are also known as cost accountants. Your primary obligation would be to record and evaluate financial information for employers. Management can specialize in financial analysis, planning and budgeting.
- Internal Auditors scrutinize records of companies to detect possible fraud and prevent waste of resources. Auditors are hired to assess operations and processes for efficiency and accuracy.
There are various degrees that you can opt for in Accounting that can influence your careers.
Certificate in Accounting
This certificate is not a college degree but it is enough for individuals seeking to be trained in the basics of this field like bookkeeping. You need to take 10 lessons to satisfy prerequisites. It is an Associate degree that can be completed in two years enough for landing a job as accounting clerk or bookkeeper. Most technical schools and community colleges offer this course. Yet, it does not promise a wide range of opportunities but you can later move to a bachelor’s degree.
An Associate program will require a high school diploma or GED test. Advanced mathematics, statistics or economics subjects in high school will serve as good preparation for this program. Associate degree subjects generally consist of tax laws, general bookkeeping methods, and computer software training exclusively for accountants, payroll systems, statistics, and management principles. Likewise, community colleges may require you to finish several units in general education. Try to get some advice from your mentor since these requirements will depend on the school. It may be advisable to take elective subjects before completing your degree.
Salaries for those with the Certificate in accounting normally range from $25,000 to $35,000 every year. This degree is a practical way of starting an accounting career. In fact, it is possible to use the credits earned from the program to transfer to earn a four year bachelor’s degree. In short, there will be more options for you. This is a means of determining if this is the right field for you. Besides, you can work after two years by earning this certificate as against four or even five years for a higher degree.
Nearly all universities and colleges offer bachelor’s programs which require a minimum of 120 credit hours. The curriculum focuses not only on accounting but business strategy and general education courses as well. With this degree, graduates can be assured of jobs in auditing, technical accounting, consulting, and financial planning. You can graduate after four years. It is an entry level for middle level employment as accountants. The work involves analysis of financial records, preparation of financial reports, and making recommendations in connection with financial activities.
This is basically an additional year after the bachelor’s degree. Students concentrate on a specific area of accounting such as auditing or taxation. It essentially leads to higher positions. The graduate program prepares students for management-level positions in reputable corporations. Large companies favor candidates with MBA in accounting because of the extensive training which is vital in making critical financial decisions and resolving problems. Degree coursework consists of accounting principles, business economics, budgeting, cost-analysis, financial reporting, and management. For majority of MBA programs, students indulge in simulated business projects. These are designed to provide students with the necessary experience in different financial aspects of managing an enterprise business from start-up to closing the books. The master’s degree qualifies candidates for professional certification exams which include Certified Public Accountant or CPA and Certified Management Accountant or CMA.
PhD in Accounting
Only a student who has successfully completed the master’s program is allowed to enroll in this doctorate degree. It calls for two years of difficult work and leads to potential opportunities in accounting management, budget analysis and other managerial responsibilities. The program includes coursework in economics, business accounting and accounting research. There will also be a thesis and series of comprehensive examinations. Those who finish a PhD are eligible for higher management positions. These are Chief Financial Officer, Chief Operations Officer, Comptroller, and Principal Business Economist. You will also be qualified to teach finance and business in big universities.
Master of Taxation
You can also consider the Master of Business in Taxation or MBT if your main interest is taxation. The degree combines theoretical as well as practical taxation.
Juris Doctor and Master of Laws
Accountants, who want to delve more in the legal facets on income taxation, may pursue a post graduate program. This is the Master of Laws (LL. M) or Doctorate offered by some law schools. You can become a tax lawyer and aim for higher compensation.
The new leaning in public accounting is geared towards specialization by function and industry. There seems to be a lot of potentials in the following areas:
- Personal Financial Planning – This covers investment strategies for building wealth, college education planning, preparation for retirement, and real estate concerns.
- Forensic Accounting – It will focus on prevention and detection of financial fraud.
- Litigation Support – This is related to providing expert evidence for civil as well as criminal cases.
- Environmental Accounting – The field involves assessment of the business features of environmental problems. Issues include damage appraisal following ecological accidents; establishing costs of pollution; reporting corporate conformity with government laws, and computation of values of natural resources.
CIA and CPA
The Institute of Internal Auditors created the title of Certified Internal Auditor (CIA) in 1974. Qualifying examinations for this certification takes 14 hours and is broken down into four parts of 3 and ½ hours each. The tests cover these areas:
- Theory and Practice (Internal Auditing)
- Quantitative Methods and Information Systems
- Accounting, Finance and Economics
On the other hand, the Certified Public Accountant has satisfactorily completed educational and practicum requirements prescribed by state laws for public accounting practice. The accountant should also have a passing score for the difficult three-day national test. These requirements for licensing are meant to maintain the uprightness of the accounting industry.
The AICPA stands as the national organization for professional accountants. However, there are other organizations that address the particular needs of accounting graduates. Some of these are the American Accounting Association, Association of Chartered Accountants in the USA, and American Women’s Society of Certified Public Accountants.
There are also Generally Accepted Accounting Principles. These are also intended to uphold integrity in this profession.
According to Inc.com, “GAAP serves as the guidelines, rules, and procedures used in recording and reporting accounting information in audited financial statements. In order to have a vibrant and active economic marketplace, participants in the market must have confidence in the system. They must be confident that the reports and financial statements produced by companies are trustworthy and based on some standard set of accounting principles.”
Organizations that shaped the development of contemporary accounting standards are the AICPA, Financial Accounting Standards Board and Securities and Exchange Commission.
The AICPA has published a booklet entitled “Accounting: The One Degree with 360 Degrees of Possibilities.” This gives prospective accounting students an idea of what an Accounting Decree will mean as well as potential expectations. The truth is numerous students are apprehensive regarding job opportunities in the country following the recent downturn and shaky nature of employment. Young people look at the factors of professions that ensure stability, wider scope and probable growth.
Accounting can be one of the steadier careers. Respectable organizations such as US News and World Report with Forbes Business Magazine consider accounting and auditing as two of the most established professions. This is regardless of a volatile economic situation. The Forbes Publication observed that the continuously progressing regulatory system of government and strict assessment made by large corporations ascertain dominance of this field.
Nearly all business firms have employees who take care of finances. This can be the accountant, bookkeeper or finance officer. Moreover, business organizations and private citizens will have use of accounting like tax computation. In other words, accountants will always be needed in the private and government sectors.
The Bureau of Labor and Statistics publishes a regular Occupational Handbook. It mentioned a 16 percent growth and even more of accounting jobs beyond 2013. This will certainly increase as each year passes.
Meanwhile, the Trends Report 2013 of the AICPA revealed that, “Enrollments and degrees awarded are at all-time highs, displaying a strong interest in the accounting profession as a career choice. Nearly 15% of universities continue to receive more applications from qualified applicants than they can admit as they are constrained by limited spaces in the classroom. Even so, more than 60% of the universities predict increased enrollment in both MBA in accounting and MA in taxation. Hiring by public accounting firms also is at an all-time high, especially at the Master’s degree level, signaling the importance of the 150-hour rule for CPA licensure. Furthermore, 89% of public accounting firms also forecast that they will hire the same or more graduates in the following year, a very positive trend into the future.” (Source: AICPA.org)
Accounting has been here for countless years. It is existent in all organizations and household. Needless to say, everyone must know where money goes and what your financial status is. Finances should be organized and managed properly if you want to make a decent profit. Accountants are needed even if the business is going bad. Companies will always need accountants while the business survives. The importance of this position is evident in all industries.