Fields of accounting

Accountants may be classified by the type of organization for which they work. For example, business accountants are employed by all types of companies. A small firm may have one general accountant who handles all financial records. But a large corporation may have many accountants for the various duties involved. Organizations or individuals may hire professional public accountants for occasional tasks or special accounting services. Most public accountants have passed a state examination and obtained a license to practice as certified public accountants (CPA’s). Such accountants are called chartered accountants in Canada, the United Kingdom, and some other countries.

Most accountants specialize in a field of accounting. The major fields include financial accounting, management accounting, tax accounting, auditing, and management consulting services.

Financial accounting involves the preparation of a business’s financial statements, mainly for users outside the business. These reports are used by owners and potential owners of a business and by people who have loaned a company money. Some government agencies that regulate business and the stock market require companies to submit financial statements to them.

Management accounting helps managers plan an control a company’s operations. Accountants prepare budgets to express management’s goals in financial terms. After a budget has been adopted performance reports compare actual results with the budget. Cost accountants help management keep track of how much it costs a company to make the product, or provide the service, it sells.

Tax accounting consists of preparing tax returns for organizations or individuals and determining the taxes involved in proposed business transactions. Tax accountants suggest ways to save money on taxes. They must have a thorough knowledge of the tax laws that affect their clients or employers. They also must know the details of court rulings in a wide variety of tax cases.

Employment in many accounting fields is expected to grow through the 1990’s. Increasingly sophisticated management techniques demand information that can be provided most efficiently by accountants.

Accounting requires the ability to gather data, analyze problems completely, and present conclusions clearly.

A college education with a major in accounting is good preparation for an accounting career. Many organizations prefer accountants with a master’s degree in accounting or management. Many accountants become certified public accountants because they wish to practice public accounting or to have the distinction of earning a CPA certificate.

Most accounts work for business companies or government agencies. Some have jobs with foundations, hospitals, labor unions, universities, or other nonprofit organizations. Many CPA’s practice in public accounting firms that provide a wide range of services. Six large public accounting firms. These firms are Arthur Andersen & Co; Coopers & Lybran; Deloitte & Touche; Ernst & Young; Coopers &Lybran; Deloitte & Touche; Ernst & Young; KPMG Peat Marwick; and Price Water-house & Co.