How extendable is the practice of Accounting in the real world, aside from bookkeeping?
I am a qualified Chartered Accountant from South Africa and a CPA licensed in New York. I have worked as an auditor and recently moved into Project Management Advisory within the Deals space.
I think the the knowledge and skill set gained by studying accounting is highly transferable into many businesses and industries based on the experience you gain in public accounting for example. You gain technical and soft skills that prepare you for a vast range of scenarios and situations. As someone who studies accounting and builds your foundation as a public accountant you learn to be adaptable, problem solve, manage yourself, time and others, analytical and so many more skills.
I have many friends who have stayed in the auditing space, many who have moved into various consulting roles and many who are in business ranging from asset managers to CFOs, even some in marketing.
A background in public accounting is highly valued and appreciated.
With a degree in accounting, I worked as an auditor at one of the Big 4 companies and transitioned into financial services working in their investment operations function. Accounting gives you a good foundation of being able to analyze financial statements, and you can venture into various areas including corporate finance and financial reporting.
The options are endless! Accounting is the language of business so you will find that it is much easier for an Accountant to find opportunities in multiple business openings rather that the other way around. I myself wondered if I should major in business management or accounting in college. Accounting gives you the knowledge required to understand the BIG picture when talking to marketing, sales, project coordinators, etc.
I myself am a CPA at a big 4 accounting firm. While I know I followed the typical path of an accountant, I know colleagues who went to work at consulting firms, small businesses, charitable organizations. Everyone needs an accountant.
First, it is better if you figure out what kind of Accountant you want to be. There are several different types.
I am in public accounting so my title will be "auditor" after I turned full time. The reason for "public" is that auditors are supposed to work on behalf of the public interest. We will go into different companies to perform audit on their financial statements. We only test if our clients' financial statement complies with the regulations on financial statements, but we do not make any changes to their financial statements. We need to make sure the audited financial statements are relevant, useful and accurate. In short, we are helping regulate the financial markets so the investors, creditors, and other stakeholders can trust and confidently use the financial statements from the companies to make decisions.
There are tax accountants. PwC and many CPA firms or financial services firms all have tax service line. Tax accountants are helping the companies and individuals to perform their tax forms. Mainly tax accountants are going to stay in tax.
Corporate accountants are the companies own accountants, They are doing daily accounting jobs for the companies. They basically are the ones keeping the companies operating. There are different types of corporate accountant depending on what industry of the employers. For example, if you are going to a mutual fund then they will have a lot of fund accountants. Factories are demanding cost accountant. There are accountants specialize in Account Payables, Account Receivables, and Finance and etc.
The differences among these types are as following:
1. Auditors always travel because we are always going to our clients' site and we keep have new engagements. Tax and Corporate accountants are more stable since they are mainly in the office.
2. Auditors will audit different companies in different industries. Tax accountants will also work for different companies but only looking at these companies' tax. Corporate accountants only work on behalf their employers.
3. Typically, people switch between auditor and corporate accountant. Tax accountants will always be tax accountants, but sometimes they will be tax lawyers.
In conclusion, accountants are not just bookkeeping. We need to understand the government regulations, talk to customers, perform data analysis, go through meeting, give advices, and etc. Around 50% of CFOs are accountants. It is important to have accounting knowledge if you work in a business.
You may never even want to leave a career in Accounting though, depending on your interests, because the career path is very clear with many options, and there is always a lot of stable market demand for accountants. Some companies focus on providing Accounting services, but every company needs an Accountant to help them run the business. You could work for any company you wanted. Several Accounting specific career paths include:
- Big 4
- Staff Accountant
- Management Accounting
- Tax Accountant
- Forensic Accountant
- Not for Profit Accountant
- Credit Controller
- Accounts Payable
- Payroll Clerk
- Shared Services Manager
- Risk Assessment
- Internal Controls
- Business Analyst
- Financial Consultant
- Budget or Financial Planning Analyst
- Cost Accountant
- International Accounting Specialist
- Finance Manager
- Director of Finance and Accounting
- Corporate Controller
- Chief Accounting Officer (CAO)
- Chief Financial Officer (CFO)
Accounting teaches you: foundational elements of business, money management, financial reporting, financial recording/ bookkeeping, financial statement analysis, general quantitative skills, GAAP (generally accepted accounting principles), good stewardship, management decision-making
Sometimes people try to choose between Accounting and Finance to study. Both would be great, but if you have to pick one, then Accounting lays better foundational blocks to build upon in the future with Finance knowledge. Think of it as Accounting being the day-to-day management and assessment of the financials, while Finance is the long-term strategy. If you don't know how things work today and what is going well, it's pretty hard to successfully implement a strategy for tomorrow because you may not understand how it will actually work.
Emilio recommends the following next steps:
Having accounting knowledge and practice is an invaluable skill in the real world as there are many different ways you can apply it. For example balancing your checkbook or tracking your spending in a month can come from basic accounting concepts. Additionally, you can take some of the more intricate accounting practices for things such as investing to help increase your income.
Hope this helps!
Accounting can lead to multiple path ways in the real work. You can do public accounting as an auditors, work as an accountant in a private firm, or work in the budgeting or forecasting process. I used to say that accounting was the language of business. If you can understand how the numbers work in the background, you can understand how the business is performing and what it's needs are. Accounting is critical and necessary at any organization. If you are thinking about getting into the profession, take a few classes and see if it's something you will like. The reality is that a lot of individuals end up in jobs outside of their degrees in college. Stay focused and motivated. Best of luck!