Accounting FAQ's

What is the Difference Between Auditors and Accountants?

While accountants and auditors both work in the financial field, they have different job responsibilities and goals. Accountants are more concerned with daily tasks, such as processing financial information, paying the company's bills and balancing the books. The position of auditor is higher than that of an accountant. Someone in this role may review the work of a company's accountants to ensure that it is correct. They are responsible for testing internal controls to determine if they are adequate to prevent errors and monetary loss for the company.

The types of reports that are issued by accountants and auditors are also different. Accountants are responsible for preparing tax forms, presenting management with budget proposals and working on aging accounts receivable reports. Auditors study these reports as a whole and present errors and discrepancies to management. They tend to look at their organization as a whole, while accountants are more involved in detailed transactions. Accountants typically remain in the office to complete their duties. Auditors may travel to other locations to review older reports. The bottom line difference between the two occupations is that accountants work with current fact and figures, while auditors are most concerned with work that has already been completed.

What Do Accountants Do?

The primary duty of an accountant is to prepare financial records and ensure that they are correct. Some of the specific duties of an accountant include the following:

  • Prepare tax returns.
  • Make sure that the company's financial statements comply with state and federal laws.
  • Make recommendations to management on ways to decrease costs and increase income.
  • Prepare reports to explain their findings to upper management.
  • Meet with private clients to provide financial advice.

There are three different career possibilities within the field of accounting.

  1. The first is a government accountant. In this role, you would ensure that all money spent and received by local, state or federal government agencies are lawfully used. You may also be involved with auditing individuals and businesses that are subject to taxation or government regulations.
  2. Management accounts are responsible for preparing financial information for internal use at their company. Preparing budgets is a big part of their jobs. Some may also be involved with asset management, such as real estate, stocks and bonds.
  3. Public accountants generally work with the individuals and corporations to help them manage their finances. As a public accountant, you may release balance sheets to potential investors or consult with a private client to help him or her make investments.

What are all the different types of accountants?

Accountants fall under a number of categories. Some of them work in the private sector and others work in the public sector. These include:

  1. Auditors, keep account of public records. They also analyze and verify financial documents
  2. Forensic Accountants deal with white-collar crimes. They investigate securities fraud and help the courts legal issues.
  3. Tax Accountants are highly trained in the field of taxation. They have the authority to represent individual taxpayers in matters concerning the IRS.
  4. Financial Advisors fall under the category of consultant, and they provide financial advice to individuals or groups.
  5. Controllers manage the accounting departments
  6. Bookkeepers initiate any accounting transactions and turn them into financial statements.
  7. CPAs are another form of accountant and is the most easily recognizable to most individuals. CPAs handle a variety of things pertaining to accounting, some of which include preparing financial reports, making sure that taxes are filed correctly, and overseeing financial records.

There are other categories for accountants, but these are the primary ones. Accountants fall under a variety of different titles, handling the basic financial needs of business or organization.

What Do Accountants Without Their CPA do?

The CPA (Certified Public Accountant) certification is one that is extremely difficult to pass, but it is something that accountants may want to look into. Right now, there are still plenty of open positions in the accounting field that do not require one to be a CPA. The public perception is one that encourages a CPA to be hired over someone without a CPA, but some companies really do not care either way.

Many people with degrees in accounting continue to work in the field without the CPA attached to their name. The biggest difference may come in the salary, but there are still plenty of accountants that are doing the same work as CPAs, just in the private sector. Accountants can still work at any number of different agencies doing taxes and working for private companies. There are so many different outlets for people with accounting degrees, and all that it takes is a little perseverance to land the right job.

Accountants are continually being hired by big and small businesses, school districts and other non-profit entities. There are currently many CFO's in the world that are doing a great job of leading the business without being certified accountants.

Can I advance as an accountant without a Certified Public Accountant (CPA) designation?

Earning a designation as a CPA or CMA increases your earnings potential in the accounting field. While it is possible to find employment without these valuable certifications, without them advancement opportunities become limited. For employment positions that require filing reports with the Securities and Exchange Commission (SEC) a CPA designation is required. Employers tend to prefer accountant job candidates who have a CPA or CMA certification.

The CPA examination is a four-part test that is offered by each state’s Board of Accountancy. The test is written by the American Institute of Certified Public Accountants. It is not necessary to pass all four exam parts at the same time. However, many states require that exams be taken within 18 months of passing the first examination. Although an undergraduate degree is not required to sit for the exam, 150 semester hours of college level course work is required. This course requirement is 30 hours higher than the requirements for most undergraduate degrees and many degree programs offer a 5th year combined bachelor’s and master’s degree program to accommodate CPA requirements.

I just graduated with a BA in accounting. Should I work for a private or public firm?

Employment as an accountant in both the public and private sector are possible. Many private accounting and financial services firms offer internships for students in the summer before their final year of undergraduate school. Students who do well during the summer internship are often proffered job offers shortly before or upon graduation.

Public accounting firms are often staffed with CPA's, working for individual and corporate clients. They perform consulting, tax and auditing tasks. Many accountants working for public firms prepare financial documents that are required by law for individuals and businesses. Private sector accounting positions include positions such as management accountants, cost accountants and investment services advisors. These positions usually are working within corporations or businesses, evaluating asset management and budget performance. Accountants in private accounting positions often perform work that is not reviewed by the public. They may make investment recommendations, such as selecting stocks, bonds and real estate to buy or sell.

What jobs can I get with an accounting degree and no experience?

There are many entry-level accounting positions that do not require extensive job experience, but do require an accounting degree. Positions as auditors, budget analysts and cost estimators are excellent opportunities to gain work experience while working toward your CPA or CMA certification.

Before you graduate, you may be able to find employment as an accounting clerk or bookkeeper to gain experience while you are still studying. Many employers offer opportunities for advancement for employees as they continue their education, including increased income and tuition assistance benefits.

How do I list the fact that I plan to sit for the CPA exam on my resume?

If you have applied to sit for the CPA exam, you can include a statement to that effect on your resume. For example, “Candidate for CPA Exam,” or “CPA Candidate” are effective statements of your intention to complete the CPA examination process.

How hard is the CPA exam?

The CPA is a rigorous and difficult series of exams. In 2010, less than 50 percent of candidates passed three of the four test sections. Recent graduates tend to perform better on CPA exams. Taking exam preparation courses and mock tests can help students study.

How do I make a mid-career switch into accounting?

There are many routes to changing careers into accounting. If you already are working in a related business field, you may find assistance through your current employer with a tuition assistance program. Many employers look favorably on employees who enroll in online accounting degree programs, which allow schedule flexibility and are a cost-effective method of earning a degree while currently employed. If you already have an undergraduate degree, you can earn a graduate degree in accounting, such as a Master of Accounting (M Acc) or a Master of Business Administration (MBA) in finance.

What can I do if I have 20 years’ experience in accounting, but no degree?

It is extremely difficult to transfer to a new job in an advance accounting position if you do not have a degree. Although it is possible to work your way up from an entry level accounting position, many employers require at least an undergraduate degree for job candidates.

Look for degree programs that offer credit for work experience, which will allow you to finish the remaining degree requirements quickly. Additionally, consider online degree programs, which have flexible schedules and allow you to network with business professionals from a wide range of backgrounds and industries. Business connections will help you find employment positions based on personal connections, even if you are working on building your professional credentials.

Will poor credit keep me from getting hired in accounting?

In today’s world, most employers check applicant credit reports as a part of their routine employment process. If your credit report contains judgements, a bankruptcy or foreclosure, it could damage your prospects with many employers. If an employer is willing to talk to you despite your poor credit history, offer a brief but honest explanation for the negative marks on your credit and reiterate your qualifications for the position. Keep in mind that smaller accounting firms are less likely to research potential employee credit reports. Before and during your job search, make every effort to clean up your credit and maintain an excellent current payment history.

Why choose accounting as a major?

Accounting is a profession that offers many opportunities for advancement and substantial rates of income. For individuals who earn CPA or CMA designation, the ability to find employment in the financial sector is significant. People who move into financial services, such as stock brokers, financial advisers and investment banking can potentially earn annual incomes in excess of $100,00 and even as high as millions of dollars. As long as government and businesses exist, there will be a need for accountants. According to the Bureau of Labor Statistics, accounting positions will continue to be in demand for the foreseeable future.

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