TEXT 2. Accounting Careers
Accountants are in demand by many different companies. Some accountants work for private companies, some work for public accounting firms, and others work in government or other not-for-profit entities.
Private accounting refers to accounting in the individual business unit. For example, an individual may be employed as an accountant for Walt Disney Company. More accountants devote their time to private accounting than to either of the other two groups. IBM, United Telecom, Hartford Insurance, and other large companies employ thousands of people who perform accounting duties. On the other hand, the smallest organizations also have accounting needs that may be fulfilled by one or two individuals.
The CMA (Certified Management Accountant) designation is issued by the Institute of Management Accountants to persons demonstrating competence in the subject areas included in the field of management accounting.Management accountantsprovide information to internal stakeholders. The CIA (Certified Internal Auditor) designation is issued by the Institute of Certified Internal Auditors to persons demonstrating competence in internal auditing.Internal auditors are private accountants who assess the company's internal control system (discussed in Chapter 3), help external auditors (discussed next), and provide assistance in designing and implementing accounting information systems. Private accountants frequently possess one or both of these certifications as well as the certified public accountant designation discussed below.
Public accounting refers to a variety of accounting services provided by an accounting firm for many different types of businesses. Instead of working for one particular business, a public accountant most often provides his or her services to a variety of clients. Public accountants provide three primary services—auditing, taxation, and management consulting.
Auditing services involve an independent assessment of whether a company's financial statements are prepared in accordance with generally accepted accounting principles. External auditors issue an opinion, which is part of the annual report that companies provide to external users. A "clean" opinion means that, in the opinion of the auditor, the financial information has been fairly presented in accordance with GAAP. Taxation services include tax preparation and planning. Management consultants provide advice on the design of accounting systems, evaluation of computer systems, and evaluation of controls used to safeguard the company's resources.
Public accountants who provide auditing services must possess acertified public accountant (CPA) certificate issued by the American Institute of Certified Public Accountants. A CPA certificate demonstrates competence in the field of public accounting, although many accountants in private as well as governmental accounting also possess a CPA certificate. Only a CPA can attest to the presentation of a publicly held company's financial information.
Governmental and other not-for-profit accounting includes accounting for governmental units (federal, state, or local) and other not-for-profit enterprises, such as the American Red Cross, educational institutions, and hospitals. The nature of these types of organizations, the sources and restrictions on their funds, and the requirements imposed on them by law present unique problems in accounting.
In the governmental accounting sector, opportunities exist for accountants to help administer the tax laws, investigate tax returns, and/or provide cost-benefit analysis of proposed and existing legislation. Some accounting opportunities are available with federal government agencies such as the Office of Management and Budget (0MB), the Securities and Exchange Commission (SEC), the Internal Revenue Service (IRS), and the Federal Bureau of Investigation (FBI). Although there is not a special certificate for government and not-for-profit specialization, many accountants in this field hold CPA, CMA, and/or CIA certifications.