Scott Johnson
Dr. Kerr
EN101-12
12 March 2013
The
Accounting Career Path: Public or Private
When it comes to
the field of accounting, most people would just summarize it as one word,
boring. This common misconception causes people to think that accountants sit
at a desk and crunch numbers all day. However, this idea is far from the truth.
The reality is that this is only a small part of an accountant’s job, depending
on which type of accounting they are in. Generally speaking, accountants
analyze and interpret financial information. What they do with this information
depends upon what type of accountant they are. Public accountants can be
thought of as “external” accountants because they provide accounting services
such as auditing, consulting, and tax planning to corporations, organizations,
and individuals (“Public Accounting vs. Private”). In contrast, private
accountants can be thought of as “internal” accountants because they work
within a single corporation or organization doing tasks such as preparing
financial statements, cost accounting, budgeting, internal auditing, and
corporate or treasury planning (“Public Accounting vs. Private”). Because of the
differences between public and private accounting in the areas of tasks and
responsibilities, work environment, and career opportunities, Public accounting
seems to offer a more successful career.
While both
private and public accounting involves analyzing financial information, the
exact duties and tasks that each type do are different. Public accountants
cover a broad area of accounting tasks such as analyzing budgets and financing,
tax preparation, providing financial advice, auditing, and even forensic
accounting. Because of this, public accountants usually specialize in a specific
area of accounting. One specific area of accounting is tax accounting, where
the accountant works with income tax returns and correctly files taxes in
accordance with regulations (“What Does a Public Accountant Do?”). Generally, a
public accountant works for many different clients, sometimes in different industries.
Because of this, they develop a breadth of knowledge in different accounting
issues (Freedman). While they still analyze financial information, private
accountants usually work for a one corporation or organization. Private
accountants perform many accounting tasks for the company they work for based
on its financial information, which makes them specifically knowledgeable about
that company’s finances (Freedman). When working for a larger, corporate firm,
private accountants usually specialize in different areas of the company’s
financial areas. One accountant may monitor company accounts and another may
prepare financial statements. Private accountants higher up in the company may
review financial statements, then create reports and provide analysis of data
from them (Brenner). One similarity is how private accountants prepare
financial statements. Many small, private companies in the U.S. have no
reporting requirements besides filing income tax returns. However, many larger,
corporate companies file in accordance with the U.S. GAAP (Hilmi). The U.S.
GAAP are generally accepted accounting principles that have been derived over
time from variety of sources, and they decide what accounting rules and
regulations must be followed in preparing financial statements (Jenkins). Large
corporations must file their financial statements in accordance with the U.S.
GAAP because they are required by lenders, bonding agencies, regulators,
business owners and other creditors (Hilmi). Many times, public accountants
from outside firms come in to the company to investigate and make sure the
financial statements are prepared correctly according to U.S. GAAP regulations
and present the financial information fairly. In this situation, the public
accountants will be doing accounting tasks similar to the private accountants.
Despite
the fact that they are in the same career field, the work environments of public
and private accountants are different. Different work environments place each
type of accountant in contrasting situations. A public accountant usually deals
with many different clients. Clients can range from a company who is being
audited, or, more commonly, an individual who is filing his or her tax return.
Dealing with many different people tends to make public accounting more
stressful because the accountant must meet a variety of demands (Freedman).
Sometimes, public accountants may need to travel depending on the client and
what type of accounting task it is that they are needed to do. Public
accountants also deal with longer hours, especially during tax season, because
they are working with many clients (Freedman). Since private accountants
generally work within one company, they tend to work with a team of fellow
accountants in an office setting (Freedman). This work environment is quite the
opposite when compared to public accountants because dealing with a familiar
group of co-workers is less stressful than dealing with numerous, unfamiliar
clients. Private accountants may work longer days at the end of the month, when
accounting records are finalized (Freedman). However, a private accountant will
spend most days working a normal eight hours (“Public Accounting vs. Private”).
An
accountant’s different career opportunities and choices are largely affected
depending on whether they choose to work for a public firm or a private
corporation. The career outlook of public accounting makes it a more appealing
choice over private accounting. In
public accounting, traveling and meeting many different clients tends to give
an accountant more exposure in the business world than in private accounting,
where one would only be able to make contacts within the company he or she
works for (“Public Accounting vs. Private”). Public accountants generally get
better experience because dealing with many different clients causes them to
work with a variety of accounting issues. Because of this, experience in a
public accounting firm looks better on a resume than experience from a private
firm (“Public Accounting vs. Private”). In order for an accountant to open his
or her own accounting firm, a large amount of experience in public accounting
is needed (“Public Accounting vs. Private”). Private accountants still have
options being that they can find work in many different industries because all
corporations need internal accountants (Brenner). Also, Most private
accountants get health and other benefits, paid vacation days, and sick leave
after they have been with the company for some time (Brenner).
Accounting
is a profession that most people think of as dull and only for those who are
good at math. The truth is that while working with numbers is a large part of
an accountant’s job, the most important part is examining the meaning behind
these numbers for financial purposes. Within accounting, there are many
different career pathway choices. Both private and public accounting are
popular career choices, and the U.S. Bureau of Labor Statistics projects that employment
growth for accounting of all types will rise at a rate of 22% between 2008 and
2018 (“What Does a Public Accountant Do?”). Both of these accounting types
offer different benefits and opportunities, but public accounting is the best
option from a career growth perspective. Despite the fact that someone in
private accounting has the option of moving up to higher positions within the
company they work for, public accounting offers better career opportunities
because of the exposure to make contacts in the business world and the experience
gained in a variety of accounting issues.
Works
Cited
Brenner,
Laurie. "What is a Private Accountant?."Chron.com. Hearst
Communications inc., n.d. Web. 28 Feb 2013.
<http://work.chron.com/private-accountant-16137.html>.
Freedman,
John. "Public Accountants Vs. Corporate Accountants." Chron.com.
Hearst Communications inc., n.d. Web. 28 Feb 2013. <http://work.chron.com/public-accountants-vs-corporate-accountants-9502.html>.
Hilmi
Elifoglu I., Fitzsimons Adrian P., and Silliman Benjamin R. "Separate
Financial Reporting Standards and Standard Setting for Private Companies."
Review of Business 32.2 (2012): 23-32.
Business Source Premier. Web. 23 Feb 2013.
Jenkins,
Edmund L., and Cheri Reither Mazza. "Generally Accepted Accounting
Principles." Encyclopedia of Business and Finance. Ed. Burton
S. Kaliski. 2nd ed. Vol. 1. Detroit: Macmillan Reference USA, 2007. 339-341.Gale
Virtual Reference Library. Web. 23 Feb. 2013.
"Public
Accounting vs. Private Accounting."ipassthecpaexam.com.
IPasstheCPAExam.com, n.d. Web. 28 Feb 2013.
<http://ipassthecpaexam.com/public-accounting-vs-private/ >.
"What
Does a Public Accountant Do?." education-portal.com.
Education-Portal.com, n.d. Web. 28 Feb 2013.
<http://education-portal.com/articles/What_Does_a_Public_Accountant_Do.html>.
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