Accounting Topics

What is Accounting?

It's one of the best jobs in the world in terms of high compensation and speedy career placement after graduation. It can also be described as "a system by which economic information is identified, recorded, summarized and reported for the use of decision makers". (Source: Vault Career Library)

Since an education in accounting can be used in so many business applications, lists certificates, associate degrees, bachelor degrees and graduate degrees. Most jobs require at least a bachelor's degree in accounting or a related field. Jobseekers who obtain professional recognition through certification or licensure, a master's degree, or specialized expertise will have an advantage in the job market. And now that computers handle the bulk of the "bean counting" functions of accounting, professionals spend more time working on in depth analysis and as part of decision making teams.

If you are considering a career in accounting you should have an aptitude for mathematics and be able to analyze, compare, and interpret facts and figures quickly. You must then be able to clearly communicate your results to clients and managers. The 2 newest study areas in accounting degrees are ethics and computer science. High standards of integrity are important in accounting because millions of financial statement users can rely on your results.

Keeping up with industry standards and technological applications is crucial in maintaining a successful, progressive career in accounting. Even accountants with college degrees continue to seek extra training or enroll in refresher courses or work towards more specialized accounting degrees. Online accounting degree students are part of the 10-20% annual increase of accountants - using the invaluable opportunity to upgrade their skills online and at their own pace.

Steady advancement is one of the most appealing aspects of professional accounting. Accounting will remain a competitive profession for many years to come. Ferguson's Top Careers for Business Graduates confirms that, "competition for jobs will remain, certification requirements will become more rigorous, and accountants and auditors with the highest degrees will be much sought after."

Career Education in Accounting

Undergraduate and graduate degree and certificate programs

A Bachelor of Science Degree in Accounting prepares you to measure and report the financial events of an individual or entity. Additionally, it provides you with the ability to understand the elements of the audit process, analyze financial statements, and apply accounting information to management-level decisions.

Also available are Bachelor of Science in management accounting degrees. These can provide you with broad business skills and specialized knowledge in financial accounting, reporting, operations, and other critical areas, but may not be applicable to tax accounting, auditing or used towards CPA credentials.

An associate's degree in accounting prepares students for entry-level jobs in accounting such as accounting assistant, bookkeeper, or management trainee. It can be a step towards national accreditation exams in accountancy. As a graduate you may qualify to work as a tax preparer, auditing clerk, or accounting assistant.

An Accounting and Finance Certificate will open up entry-level career opportunities with the myriad of organizations that require accurate financial record-keeping, effective cash management, and investment strategy. Consider the option of working as an entry-level accountant in business administration, operations, or a financial operations department.

On the other end of the spectrum is the Master's Degree in Accounting. Based on the common career path of accounting professionals, obtaining this level of education is usually done in conjunction with working towards CPA credentials. A Master's Degree is the fifth year of education in accounting, and obtaining a CPA is done after 5 year's of education. Designation as a certified management accountant (CMA), and chartered financial analyst (CFA) are other "next steps" after a Master's Degree.

What about an MBA?

An MBA (Master of Business Administration) is not required for career advancements in accounting, but it is preferred and can even be a requirement for positions like financial analysts where a broader range of knowledge may be required. Other related job titles include business analyst, associate consultant, and research associates.

What can you do with a University Degree in Accounting?

Career Specializations within Accounting

The accounting field has a large degree of mobility and your advancement depends on your continued education and certification. Accountants can specialize in different businesses or fields, and according to particular accounting functions.

Accounting can be divided into four major fields of accounting as defined by Bureau of Labor Statistics, U.S. Department of Labor:

1. Public Accountants
2. Management Accountants
3. government Accountants
4. Auditors and Internal Auditors

Public Accountants
Careers in Public Accounting focus on auditing and tax functions. New public accountants usually work for several clients on their own or as part of a firm providing services. Advancement to positions with more responsibility takes 1 or 2 years, and to senior positions in a few more. Those who excel may become supervisors, managers, or partners; open their own public accounting firms; transfer to executive positions in management accounting; or internal auditors in private firms. Larger firms prefer to hire Master's Degree graduates. The salary range for an associate accountant is $25,000 - 38,000; for a senior public accountant it's between $33,000-52,000; and a manager averages between $45,000 and 74,000.

Private Accountants
Management accountants often start as cost accountants, junior internal auditors, or trainees for other accounting positions within a corporation. 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.

The average starting salary for a management account in 2000 was between $28 -36,000. A minimum of a bachelor's degree in accounting and 2 year's experience is required and professional licensing is recommended. The focus is on the reporting functions within the organization to contribute to planning and decision making. A management accountant also manages the reporting to stock holders, regulatory agencies, and tax authorities.

Government Accountants
Government Accountants can work at any level of government to analyze and oversee the performance and allocation of funds. At the federal level, opportunities exist in such diverse areas as the Department of Defense, the IRS, and the Securities and Exchange Commission.

Internal Auditors
Internal auditors deal with conducting compliance audits, internal controls and accounting information systems. As they advance in their careers, they can become involved in operational audits and provide recommendations and plans for continued financial improvement within an organization.

The breadth of the industry leads to many areas of specialization such as, General, Budget, Cost, Property, Systems, Forensic, and Tax accountants. Private accountants are also in demand for non-profit organizations who need specialized expertise in tax regulations and policies unique to them.

Private accountants are also in demand for non-profit organizations who need specialized expertise in tax regulations and policies unique to them. The breadth of the industry leads to many areas of specialization such as, General, Budget, Cost, Property, Systems, Forensic, and Tax accountants.

Deciding on which route to take depends on your own personal career and lifestyle goals. Public accounting generally provides higher salaries, variety, and advancement based on merit. Your actual working hours as a Public Accountant are applied to your CPA requirements.

Private accounting is more stable with a fixed location, hours, and job load. Private accountants should get a traditional 4 year degree, but are not required to obtain their CPA as described below. Internal auditors, management accountants and tax professionals can practice without a CPA designation.

Certification and Licensure

Professional recognition through certification or licensure provides a distinct advantage in the job market, so about 40% of accountants are certified.

A CPA (Certified Public Accountant) designation is earned through a combination of experience and passing the Uniform CPA Examination prepared by the American Institute of Certified Public Accountants (AICPA). Each state has its own requirements for certification.

In general, to become a CPA you must complete:

* 150 credit hours of college level education which translates to 5 year's of college and graduate level work. The additional year allows for increased development of communication and analysis skills and technical competence.
* Passing grades on all 4 parts of the Uniform Certified Public Accountants Exam.
* Your state's requisite accounting work experience - usually about 2 years.

Certification not only demonstrates your professional commitment and expertise, it is crucial in certain accounting functions. For example, only a CPA may sign an audit option, which is the official declaration that prepared financial statements reasonably represent a company's financial position. Only about 25% of people who take the CPA exam pass all 4 parts on their first try.

The AICPA also offers members with valid CPA certificates the option to receive the Accredited in Business Valuation (ABV), Certified Information Technology Professional (CITP), or Personal Financial Specialist (PFS) designations.

The Institute of Management Accountants (IMA) confers the Certified Management Accountant (CMA) designation upon applicants who complete a bachelor's degree in accounting or attain a minimum score on specified graduate school entrance exams.

The Canadian equivalent of a CPA is a Chartered Accountant (CA). For more information on Canadian Associations and Licensure, see below.

Other Associations and Certifications

Accreditation Council for Accountancy and Taxation (ACAT): The ACAT examination is sponsored by the National Society of Public Accountants. The examination is offered twice a year, in May and December. The six-hour examination is given at over 200 test sites nationwide. ACAT accreditation demonstrates to your clients and/or employer your professional status.

Enrolled Agents Examination: The Enrolled Agents Examination is a comprehensive four-part exam administered once a year by the Internal Revenue Service. The primary benefits of being an enrolled agent are recognition of attaining a high level of knowledge of federal taxation, and eligibility to practice before the IRS.

A Certified Information Technology Professional (CITP): is a CPA certified as a technology professional and recognized for his or her unique ability to bridge the gaps between business and technology. This is a unique credential, unlike other certifications that recognize only a narrow scope of skills.

The Personal Financial Specialist (PFS): is the financial planning specialty accreditation held exclusively by Certified Public Accountants (CPAs) who are members of the American Institute of Certified Public Accountants (AICPA). CPAs who wish to distinguish themselves within the competitive financial planning marketplace should obtain the PFS credential.

Canadian Certification

The CGA Program of Professional Studies incorporates requirements of education, examination and experience that individuals must meet to become a CGA. The Association is recognized internationally as a leading developer and provider of competency-based professional accounting education that integrates ethics, information technology, and the best methods of distance learning.

A university degree, required for certification, provides the foundation for the core professional competencies that are acquired through the CGA Program of Professional Studies. While students may attain the degree from any recognized institution, CGA-Canada offers integrated degree opportunities through partnerships with major Canadian degree-granting institutions. The Canadian Association of Business Valuators is a federally chartered, non-profit professional association. The founders of the Association realized that introduction of the taxation of capital gains in Canada would increase the general need for business valuations. Accordingly, they established an organization dedicated to ensuring professionalism and high standards in the field of business valuations.

The technical nature of the material covered requires that students should have a basic knowledge of accounting and financial statement analysis, acquired at the equivalent of at least a university undergraduate level. Although not required, possession of an undergraduate or graduate degree in accounting/finance, or a designation such as CA, CGA, CMA, CFA or equivalent is encouraged.

How to Become a Chartered Accountant

Chartered Accountants (CAs) are business professionals who generally work in four key areas. About 40% of CAs are in public practice, while the other 60% are employed in industry, government, or education.

The skills and abilities, and the proficiency you are expected to achieve, are set out in The CA Candidates' Competency Map: Understanding the Professional Competencies of CAs.

Minimum requirements have been established in each of these components to assist you in your development as a CA candidate. Check with your Provincial Institute/Ordre for specifics.

* Education: A university degree with specific business course credits, as well as the professional program of your province or territory. This level of education provides a sound base of knowledge, skill and values necessary to be able to demonstrate competence.
* Experience: Work experience in a recognized training office under the supervision of experienced CAs is also required. The training you receive during this period will greatly assist you in the development of the skills, attributes and values of a competent CA.
* Evaluation: Assessment is the key to determining competence. CA candidates continually receive assessments throughout their development - in university programs, in professional education programs and on the job. All CA candidates must sit the profession's Uniform Evaluation - our UFE- which is the capstone evaluation of a process of developing and assessing the knowledge, skills and professional values required of a CA.

These 3 elements ensure that when you earn your CA designation, you will have acquired all the competencies that the marketplace expects of a CA.

The Uniform Evaluation Exam

All Canadian-trained CAs must write the same, profession specific, uniform evaluation exam (UFE). This allows us to set one single, high standard that is nationally and internationally recognized. The evaluation challenges candidates to demonstrate their proficiency in the CA competencies.

The UFE is set by the CA profession's Board of Evaluators. It consists of 3 papers written over 3 days - 1 per day. These papers challenge you to demonstrate your competence by responding to simulations/business scenarios that represent the kinds of challenges you have faced during your work experience, or will soon be facing in your professional career as a CA.