Accounting practices have been used ever since the first farmer kept track of the number of sheep or cows he owned and the first merchants tracked inventory and kept records of their profits and losses. From these humble beginnings, accounting has grown to become one of the leading business sectors in the world today. Accounting is a system by which financial information is identified, recorded, analyzed, summarized, and reported for the use of decision makers. Put simply, accounting is the language of business.
An accounting system tracks all the financial activities of an organization (whether it’s a Fortune 500 company, a small independent book publisher, a nonprofit theater, or a government agency), showing when and where money has been spent and commitments have been made. This helps decision making by allowing managers to evaluate organizational performance, by indicating the financial risks and benefits of choosing one strategy over another, and by spotlighting current weaknesses and opportunities. It allows managers to take a step back, look at the organization, and assess how it is doing and determine where it should be going.
Many accountants are employed by the Big Four, which are defined as the four largest public accounting/professional services firms. The Big Four is comprised of Deloitte, EY (formerly Ernst & Young), KPMG, and PwC (formerly PricewaterhouseCoopers). Accountants, however, don’t work just for the Big Four. They work for public accounting firms of all sizes. Many others work in corporate accounting (from Fortune 500 companies to “mom-and-pop” shops), in government accounting, and for nonprofit organizations. Some own their own accounting firms. Others teach accounting and auditing. Accountants are responsible for four core functions:
- Accounting: Overseeing and managing the financial records and operations of an organization to make sure they follow organization, industry, and government regulations.
- Auditing: Providing assurance that internal controls in place are adequate to mitigate their organization’s financial risks, that governance processes are effective and efficient, and that organizational goals and objectives are met, as well as determining if an organization’s financial activities are reported accurately in its financial statements to regulators and investors.
- Assurance: Defined by the American Institute of Certified Public Accountants as “independent professional services that improve the quality of information, or its context for business or individual decision-makers.”
- Tax: Preparing tax returns for corporations, other organizations, and individuals; developing strategies to reduce the amount of taxes paid; and examining the tax implications of various business practices.
In addition to these core areas, accountants work in a variety of specializations that continue to grow as government regulations increase, business opportunities expand, and U.S. accounting firms increasingly work in the global marketplace. They include:
- advisory/consulting services
- business process outsourcing
- enterprise risk management
- expert witness
- health care
- information technology
- litigation accounting
- management consulting
- mergers and acquisitions
- personal financial planning
- strategic planning
Despite the variety and dynamic nature of the field, accounting has always had an image problem, stuck in public opinion as a boring, tedious career loaded with math geeks who love crunching numbers but little else. While elements of this stereotype may have been accurate in the past, they’re not true today. The basic mechanics of accounting can certainly be tedious at times, but such functions are increasingly becoming automated, with accountants focusing more on analysis, interpretation, and business strategy. This puts them at the forefront of business today. Accounting firms are no longer looking for “bean counters”; they want highly analytical and creative workers with excellent communication and teamwork skills.
In fact, accounting is often ranked as one of the most desirable professions available—including being ranked as one of the top 50 jobs in 2020 by U.S. News & World Report. In 2019, CareerCast.com ranked the career of “accountant” in the top 50 best jobs in terms of work environment, income, employment outlook, physical demands, and low level of stress. Salaries are also strong for accountants. In 2018, accountants and auditors earned a median salary of $78,820, according to the U.S. Department of Labor, earnings that are much higher than the national average ($51,960) for all careers.
Opportunities in the accounting industry exist at every career level, although accountants and auditors are the prime movers in this field. They typically have at least a bachelor’s degree in accounting or a related field, although an increasing number of companies require their accountants to have master’s degrees in accounting or taxation. There are also opportunities for lawyers, information technology professionals, and marketing workers, and in other related careers. High school graduates can get started in the industry working as accounting clerks and office support professionals. The bottom line is that the accounting industry offers a variety of rewarding career options.
Advances in technology continue to change the accounting industry. Tasks such as data entry, creating electronic documents, and accounts payable functions are increasingly being taken over by software, which will reduce demand for lower-level accounting professionals. Many accountants and auditors view the introduction of technology and automation as a good thing because it will allow them to focus on more intellectually demanding tasks and be able to provide higher-level advisory, analytical, and long-term planning services to their employers. “I think accountants who understand technology will rise to the top,” predicted Pavan Satyaketu, the managing director at the consulting firm Advaion LLC, in “Accounting in 2040: 4 Ways the Industry Will (Probably) Change in 20 Years,” an article published at GoingConcern.com, an accounting industry Web site. “Yes, the robots are coming, but they aren’t going to take away our jobs.”
- Interesting work. Forget the clichés about “bean counters” toiling over stacks of financial records in windowless offices. Today’s accountants work on many different types of financial issues. They often work in teams, and many work in clients’ offices. Advances in technology help accountants tackle mundane tasks and give them more time to focus on larger issues.
- Collegial work environment. Your coworkers will typically be smart, motivated, and share your excitement for a career in accounting.
- Career diversity. A wide variety of career paths are available—from public accounting, to government and nonprofit careers, to corporate accounting and academia. There are also many specialties such as tax, health-care, and environmental accounting. Accounting is also a great launching pad for careers in business, consulting, law, nonprofits, education, government, and other sectors.
- Geographic freedom. An accounting degree allows you to work anywhere in the United States and even the world.
- Independence. If you want to be your own boss, you can join the ranks of many other accountants who start their own firms.
- Work at home. Some jobs offer the opportunity to telecommute; many self-employed accountants have home offices.
- Good pay. Accountants and auditors earned an average salary of $78,820 as of May 2018, according to the U.S. Department of Labor. This salary is much higher than the national average ($51,960) for all careers. Starting salaries for new accounting graduates are also much higher than for graduates with degrees in many other majors. New graduates with bachelor’s degrees in accounting earned average starting salaries of $57,734 in 2019, according to the National Association of Colleges and Employers. In contrast, the average for all graduates with bachelor’s degrees was $50,944.
- On-the-job learning. The accounting industry places great emphasis on continuing education, which will help you keep your skills updated. Accountants also get an inside view of how businesses operate, which can come in handy as you move into the ranks of management.
- Good opportunities for career advancement. A large number of baby boomers—many in top management positions—are expected to retire in the next decade. This will create more advancement opportunities than in the past.
- Great for women and minorities. The accounting industry is a great option for women and minorities. Women now make up more than 50 percent of accounting students in the United States, and many firms have diversity programs and initiatives that seek to increase the number of minorities in the accounting industry.
- Long hours during busy periods. Expect to work 40+ hours a week during peak tax-filing periods. (This time demand is often offset by the ability to work fewer hours during off-peak times.)
- High pressure/stress. Public accountants face a lot of pressure to prepare returns and meet deadlines during the tax period, which runs from January to April. Some accountants help manage multimillion-dollar finances and have no margin for error.
- Constant need for continuing education. Constantly changing tax codes, new laws, and certification requirements mean that accountants must continue to learn throughout their careers.
- Less autonomy. Individualists may have a tough time in this industry because of its focus on teamwork and rules-oriented best practices.
- Sedentary work environment. Accountants—especially those in staff-level positions—spend a lot of time seated in front of their computers.
- Many bosses with different priorities. Accountants, particularly public accountants, are usually assigned to multiple projects at any given time and must prioritize and, when needed, learn to say “no.” This is particularly true in public accounting, where working on multiple, simultaneous projects for different clients is commonplace.
- Conservative culture. Workers expecting a casual, quirky work atmosphere should look somewhere else. Accountants are generally looking to see if reported numbers conform to one set of regulations or another (generally accepted accounting principles, the Internal Revenue Code, Securities and Exchange Commission regulations, etc.). This emphasis on regulations (in fact, one might say that the entire accounting industry exists because of regulations) translates into a generally risk-averse culture and ethos that emphasizes conformity.
- Audit and Assurance Accountants
- Bank Examiners
- Billing Clerks
- Bookkeeping and Accounting Clerks
- Chief Financial Officers
- Chief Restructuring Officers
- Credit Analysts
- Financial Analysts
- Financial Consultants
- Financial Institution Officers and Managers
- Financial Institution Tellers, Clerks, and Related Workers
- Financial Planners
- Financial Services Brokers
- Forensic Accountants and Auditors
- Regulatory Affairs Managers
- Regulatory Affairs Specialists
- Tax Accountants
- Tax Managers
- Tax Preparers