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What is Accounting?
Accounting is the recording, reporting, analysis and audit of financial information for a given business. Individuals in this field are responsible for tracking the flow of money into and out of a company, business or personal account, making sure that all transactions are in line with tax law and policy, and meet the standards put forward by the employer. Accountancy has various specializations, that may be obtained through study and certified through examination. Such certifications are typically appealing to potential employers, who in turn may assist in obtaining such certifications by supplying study materials and/or paying for the exams.
An accounting degree prepares an individual by providing the skills and knowledge necessary to perform those tasks. Students interested in becoming accountants can pursue degrees from the associate's level to PhD, though the most common degree necessary for an entry level position is a bachelor's.
It is important to note that one does not necessarily need a degree in accounting in order to become an accountant. Similar degrees, such as business, economics, or finance, can be substituted for a degree in accounting when applying for a job. That said, a degree in accounting is preferential as an individual will be better prepared and require less overall training when entering a new job. When considering pursuing a degree in accounting versus another similar field, it is important to know whether or not one specifically intends to enter the field of accounting.
Some courses in an accounting curriculum may include:
- Financial Accounting
- Fundamentals of Finance
- Business Law
Employment Opportunities and Certification
Most businesses will look for potential accountants that have at least a bachelor's degree. An accountant filing with the Securities and Exchange Commission (SEC) must be a Certified Public Accountant (CPA).The CPA examination is a national exam that allows for state licensing. Some states will have additional licensing requirements that must be met prior to licensure.
Other certifications and exams include:
- Enrolled Agents Examination (Required to work in front of the IRS)
- Personal Financial Specialist (FPS)
- Certified Information Technology Professional (CITP)
It is worth noting that tax codes and laws can change abruptly at the local, state and federal level. Accountants should be up to date on any changes made, as small mistakes can lead to large problems. Many accountants will utilize news services and internet resources to track any changes relevant to the business they are working with, and some will take continuing education courses to refresh and update information and methodologies.
Job Growth, Salary, and Related Fields
Job growth in accounting is expected to be better than average as the economy improves and more businesses are formed. The median annual salary of an accountant is $59,500 per year, with the lowest 10% earning less than $37,000 per year. CPAs are necessary for public companies that have to report earnings to the SEC, and accountants who have earned a CPA will be in greater demand and higher earning potential than those that do not.
Additionally, even though job growth is expected to increase over the next decade, due to the large number of accountants in the United States, competition is expected to remain high for available positions. Due to this, individuals with certification or licensure, or individuals who have earned a master's degree are more likely to be hired and have a wider range of opportunities available to them.
For additional information about a career in accounting, read the Complete Guide for Accountants on our blog.