Why would anyone want to learn how to be an accountant when all they can picture is the old stereotype? A boring nerd with thick glasses and some pens in their shirt pocket, whose most prized possession is their trusty calculator, and favorite book is the six thousand page income tax legislation.
But ask most accountants and they’ll tell you it’s well and truly time that image was discarded, never to be seen again! Because the modern accountant is more than just a number cruncher and tax code policeman.
The modern accountant is an important strategist, consultant, and advisor. Although the traditional areas of accounting such as tax and auditing are still alive and well, the accountant’s role has expanded into new areas as diverse as forensic investigation, IT systems implementation and strategic planning.
Accountants can be seen as advisors, senior management, and Board members of some of the world’s largest and most successful companies.
Whether you aspire to this, or just to helping grow the family business, the world of accounting offers an exciting and vibrant career path.
What is An Accountant?
An accountant measures, processes, and communicates financial information about businesses.
Accountants can be traced to early civilizations, where the advent of trading and currency resulted in the need for people to manage the transactions that took place. The practice of bookkeeping developed throughout the middle ages, and accounting became a more organised profession in the nineteenth century after the industrial revolution.
Even though accounting has now grown to the point where an accountant may be responsible for functions beyond the traditional realm of accounting, the key responsibilities of an accountant can be summarized into four areas:
- Financial accounting: This involves preparing and managing the financial records of a business and providing reports to external parties. It places a high emphasis on understanding and putting into practice the various accounting standards, which are the rules of accounting. Financial accountants have a detailed technical knowledge of the accounting standards.
- Management accounting: This type of accountant analyses a business’s results and reports. The focus of a management accountant is more on providing reports and information to a business’s management to enable them to make timely and informed decisions. They also facilitate the collation of budgets and forecasts.
- Auditing: An auditor verifies the accuracy of a business’s financial reports. They do this by collecting evidence to support the numbers contained in the reports, and then provide an opinion on the results. Audit reports provide assurance that a business is viable, and that its financial recordkeeping is accurate and complete.
- Tax Accountant: A tax accountant prepares documentation relating to taxation legislation such as returns. They also engage in planning activities to work out how businesses can structure themselves most efficiently from a tax perspective.
Why Choose Accounting as a Career?
There are many reasons why accounting makes a great career, and why learning how to be an accountant is a popular choice for students.
One of the main reasons many people choose to become an accountant is because of the demand for them. They are one of the few professions that virtually every organization will need in one form or another. Even in economic downturns, accounting is a profession that can be less exposed than most, and in fact, some areas of accounting such as insolvency practitioners and business restructuring experts actually prosper when other businesses are struggling!
There are certainly benefits to being an accountant in terms of prestige and financial reward. Accountants are among the highest paid professions, and a senior position as a Chief Financial Officer in a company or a partner in an accounting firm can be particularly lucrative. Accountants are also in demand as directors on Boards in both the corporate and not-for-profit sectors.
Another reason why many people choose accounting as a career is the potential international opportunities it creates. At its most basic, accounting rules are very similar across the world; a debit is always a debit and a credit always a credit! Additionally, as the world continues to move towards globally harmonized accounting standards, a technically skilled accountant is become increasingly mobile, and able to apply their skills consistently in many different countries.
The career path that accountants take can be extremely diverse. As the training opportunities and skills learned in a professional practice are often the best, many accountants who have recently graduated from university start their careers there. The biggest accounting firms are known as the “Big 4”, and given their scale provide the most opportunities in terms of work types and locations. If you commence in a professional practice firm as say an auditor or tax consultant, there may be opportunities to progress through the managerial and director levels and become a partner of the firm.
However, not everyone wants to be the partner of an accounting firm, and after a few years transfer to a commercial organisation to more of line management role in an operating business. Here, there are opportunities to work in finance manager and financial controller roles, and progress through to being a company’s Chief Financial Officer, or even Chief Executive Officer.
What Skills do Accountants Need?
Given the diverse range of organizations that accountants work in, as well as they varying nature of their work, the skills demonstrated by accountants differ too. However, there is a core set of skills that are at the essence of every good accountant.
Firstly, given much of accounting revolves around numbers, accountants must have sound maths and numeracy skills. This is still the case even though most work these days is performed by systems and spreadsheets!
It is also important that accountants possess a high attention to detail. Remember, the information they prepare is used for decision making purposes by numerous parties such as Boards, investors, creditors and banks. An accountant needs to make sure what leaves their desk is right.
The other aspect to preparing information is presenting it, and that’s why accountants need to have particularly effective communication skills. Whether it’s through writing a report or giving a presentation, an accountant must translate what could be a complex issue into something that’s concise and easy to understand.
To help them with presenting information, accountants are able to rely on IT systems. Not only does this make tasks more efficient, it enables accounts to generate highly accurate and insightful information. This means it is very important for modern accountants to have well developed computer skills.
There are myriad financial systems used by accountants. It will depend on the type and size of a business as to which one they use.
Large businesses use systems such as SAP, which is a very powerful Enterprise Resource Program (ERP). Using multiple modules, an ERP enable a business to use the one system to control all facets of their operations, from purchasing to inventory to human resources to project management and beyond. Get a step-by-step overview of SAP in this course.
Smaller businesses on the other hand use popular off-the-shelf solutions like QuickBooks that are a lot simpler to implement and use. Take this course to learn more about the features of QuickBooks.
The final core competency of a good accountant is problem solving ability. Accountants will often be called upon to identify an issue, analyse it, and them come up with the best way of solving it.
If this sounds like you, all you need now are the right qualifications!
What Qualifications do Accountants Need?
Learning how to be an accountant is a stringent process that can be a lot of hard work. But the process is designed to ensure that accountants provide a professional level of service and are seen by others as trusted and ethical advisors.
The main professional accounting body in the US is the American Institute of Certified Public Accountants (AICPA), and people qualified under the body’s rules are known as CPAs.
The CPA certification provides potential users of accountants’ services with the comfort that the accountant has attained an adequate level of education and experience, and they are committed to undertaking ongoing training.
The three things someone needs before being granted a CPA license are:
- Education: Most states require 150 semester hours of education, with a certain number of these being accounting related. This requirement means that a Bachelor’s degree is generally not sufficient, and most students wanting to become CPA qualified undertake a graduate level course. The graduate course enables a student to focus in on the field of accounting they are looking to specialize in, and are generally in the form of a Master of Business Administration or a Master of Accounting, depending on the college. There are significant differences between the quality of accounting programs at universities, so make sure you research them thoroughly to see which one is the best fit for you.
- Examination: The CPA exam is uniform across the country, and involves testing candidates’ knowledge in four areas: auditing and attestation; business environment and concepts; financial accounting and reporting; and regulation. Question types include multiple choice, simulation and written communication.
- Experience: The amount of experience requires varies by state, but most require at least two years of work experience for the CPA license to be granted. More or less requirements may exist based on a candidate’s education, employer and type of work undertaken, so it’s recommended you contact your local AICPA office to see what applies in your state.
Once qualified, CPAs typically need to undertake a minimum of 40 hours per year of Continuing Professional Education (CPE). This ensures that they keep abreast of the latest industry development and technical updates, and are able to continue to provide a high quality service to businesses and clients. Hours can be done as formal training courses, online learning, or research.
Not all accountants have the desire to become a CPA. If you wish to become a bookkeeper or work in a more clerical type role such as accounts payable, accounts receivable or payroll, a Bachelor level degree or even a technical or community college diploma will suffice.
Becoming an accountant is a wise choice. You have the opportunity to be involved with virtually any type of organization, both at home and abroad. And given the sheer number of accounting related tasks required to be undertaken, not only do you have a solid career path, you have a better chance than many other professions of never being out of a job!
The modern accountant needs to be armed with many skills and qualifications to succeed in their chosen profession. Plus, they need to stay on top of developments in an ever-changing landscape of new and updated standards and codes.
Accountants have come a long way from the “boring” stereotype. As most of them will tell you, learning how to be an accountant is a thorough process, but accounting is a great career choice that can take you virtually anywhere!
Updated by Gary A.