Accounting Career Field Structure
Accountants and auditors prepare, analyze, and verify financial reports for businesses and government organizations. The accounting department figures profits for the company, prepares its taxes, and keeps track of the cost of running the company. The auditors check those calculations to verify their accuracy.
Accountants develop bookkeeping methods that allow a company to keep track of assets and liabilities at any given time and monitor any changes that occur over a period of years. Accountants and auditors may be required to establish a system that breaks down debits into categories of expenditure (money going out of the company) or periods of expenditure. The bookkeeping system depends on the goals of the business and the needs of its management.
Budgeting is another major responsibility of most accountants. Using past and current financial records, accountants forecast what a company can afford to spend in a particular area. This plays a vital role when company executives decide how financial resources should be allocated.
Because each company has very specific needs, most managers, especially in larger firms, prefer to hire accountants to work exclusively for them. Some large companies are so complex that they have several different accounting divisions. A full-time accountant may be referred to as a management accountant, private accountant, or industrial accountant.
Smaller businesses may hire a permanent accountant as part of the staff, or they may hire one who will work with them on a freelance basis. Some small companies may hire a specific accountant to work with them on a particular project, especially if that accountant is an expert in that area.
The auditing department also works on the books for the company. Internal auditors keep track of company expenses to make sure that financial information is reported correctly. They are responsible for evaluating financial information to determine possible fraud or waste. They may also be responsible for developing more efficient methods of operation or new safeguards to ensure that the company is operating efficiently. Auditors monitor the company’s operations and bookkeeping procedures to maintain compliance with tax and business laws.
When experts set up an accounting system for a business or individual, the needs of the client must be assessed before the system is designed. Sometimes more than one accounting system is required to keep accurate track of the company’s transactions, particularly in large businesses.
A balance-sheet system lists assets and liabilities, as well as other financial data. This gives stockholders and company officials insight into the well-being of the business on a regular basis. An income statement provides an account of operative costs and cash intake, so the overall cost of doing business can be appraised regularly without calculating in other company investments.
Accounting systems can also be set up to list earnings paid to stockholders and earnings reinvested in the company. The flow of funds can be tracked to determine where and when company funds are paid out. If there are periods when a large amount of cash leaves the company, then arrangements may be made to reschedule payments to remove high and low points in the cash flow.
In a larger company, a staff of accountants shares the responsibilities of tracking the business. Accounting firms handle the complex finances of large corporations that require external assistance with financial management.
During the late 1980s, several accounting firms merged into larger corporations. The trend continues today as accounting firms condense into larger groups covering a broader geographical area and offering clients a wider range of services. As the world shrinks, the field of accounting continues to grow.
The single largest employer of accountants and auditors is the U.S. government. Government accountants maintain the enormous quantity of financial records of government agencies. They also have the same responsibilities as private accountants but, for some agencies, the budgets are immensely larger than those of private corporations.
Accountants also have the opportunity to work independently as financial consultants; others run their own business or work part time during tax season. Some also work as teachers or school administrators.