Accounting 2016-10-13T16:26:59+00:00

SO YOU WANT A CAREER IN ACCOUNTING?

Good!  Accounting is a hot field!

The Bureau of Labor Statistics is projecting an additional 142,400 accounting related jobs by the year 2024!

The bottom line with Accounting is that you will have an incredible amount of opportunity whether you want a standard accounting job or a HIGHLY paid advanced accounting career!  We outline below important statistics, but we also introduce various tracks you can go down with an accounting degree and career.

Accounting Salary Information

 

DISCOVER THE FINANCIAL BENEFITS OF ACCOUNTING

Median Pay:  $67,190 (per Bureau of Labor Statistics)

What You Can Expect Right After College:  So, here’s the deal!  There are literally thousands of tracks you can go down with accounting.  We will outline the most common.

Big-4 Public Accounting Firm (Audit & Tax):  Expect Around $55,000 (7 – 12% Raises)

Regional Public Accounting Firm (Audit & Tax):  Expect Around $45,000

Big-4 Public Accounting Firm (Systems):  Expect Around $60,000

Big-4 Public Accounting Firm (Advisory):  Expect Around $60,000

Large Public or Private Company:  Expect Around $50,000

Small Public Company:  Expect Around $40,000

Small Private Company:  Expect Around $35,000

What You Can Expect After 5 Years:  For those that go with a Big-4 or large regional public accounting firm, you can expect to have opportunities that range in salary from $90,000 – $115,000.  For everybody else, you can generally expect opportunities that range in salary from $50,000 – $75,000.

What You Can Expect After 10 Years:  This is where things really begin to heat up.  For those that go with a Big-4 or large regional public accounting firm, you will likely be making around $120,000 – $145,000 within a public accounting firm.  However, you will have extremely lucrative opportunities at both public and private companies depending on your area of expertise.  Jobs such as Senior Manager of Financial Reporting, Director of Internal Audit, Controller, Chief Financial Officer are all jobs that you will most likely be qualified for.  Realistically, you should expect salary ranges of $145,000 – $165,000.  However, you most likely will receive annual bonuses that can range from $10,000 to $50,000.

What You Can Expect After 15 Years:  This is the point where most are beginning to make partner within a public accounting firm and/or they are reaching executive levels within the public or private company they work at.  It really depends what company you work for, but if you had been a high performer within a large public accounting company you could expect salaries to range from $165,000 – $250,000.  Keep in mind that it’s the best of the best that reach the top end of the salary range.  There are accountants at the 15 year mark that are a few years away from making $500,000 or more per year, but remember that these are the absolute top performers and not everybody should expect to ever reach these top end salary points.

What Accountants Do

 

EVER WONDERED WHAT ACCOUNTANTS DO?  WELL, HERE IS AN IN-DEPTH LOOK!

From a general and high level perspective, public and private company accountants prepare the company financial statements and ensure they are accurate.  Whereas, external auditors have a duty of examining the financial statements to ensure they are accurate.  Below we provide a more in-depth discussion of the most common accounting jobs.

Public & Private Company Accountants:

  1. General Accountant (i.e. Payroll or Accounts Receivable Specialist) – These general accounting roles typically just require an accounting bachelor of science degree.  On a day-to-day basis these people are processing payments, orders, etc.  It’s also their duty to input information into the accounting system and ensure it’s accurately entered.  Additionally, they perform monthly reconciliations and process all other routine reports necessary for the month end close.  If you like routine and are a detailed oriented person, then this type of job might be for you.  You should know though that there isn’t a lot of upward opportunity if you go down this accounting path.
  2. Controller – A controller is somebody who managers all the general accountants and oversees the financial reporting department. The controller is typically one level below the Chief Financial Officer and they wear a lot of ‘hats.’  The controller at a small private company is also responsible for the financial reporting process, which incorporates compiling the financial statements.  Whereas, a controller at a large public company typically has a financial reporting department that handles the financial statement duties.  A controller spends a lot of time reviewing and signing off on transactions as well as monthly reports.  The controller must also have a strong understand of Generally Accepted Accounting Principles (GAAP).  Controllers typically start their career working for a relatively large public accounting firm, and then they make the jump to industry, which is either a public or private company.  With that, most controllers are CPA’s.  If being a controller is a something you are thinking about, then we highly recommend getting your CPA.
  3. Financial Reporting – Most all public and large private companies have financial reporting departments.  They typically have one or two staff, one manager, one senior manager, and one director.  You can see how there is upward mobility in this career path.  You should also know that upper level financial reporting people do have opportunities to move into a controller or chief financial officer position.  The financial reporting department is responsible for compiling all the period ending financial information of the company into financial statements (i.e. balance sheet, income statement, statement of retained earnings, and cash flows).  Per GAAP, every transaction within a company has an appropriate place within a financial statement, and it’s the duty of the financial reporting department to ensure transactions are appropriately classified within the financial statements.  If you like the big picture of things, but are also detailed oriented, then this career path might be for you.
  4. Financial Planning & Analysis – These people assist with analyzing current and historical financial trends to facilitate management operational decisions.  They also prepare forecasts based on trends within the company as well as trends within the industry.  These people most commonly report directly to the controller or the chief financial officer.  If you like analyzing data, then this career path might be for you!  Again, a lot of people within this career path started their career at a mid to large public accounting firm.
  5. Internal Auditors – The internal audit department is unique in that they don’t report to management.  The director of internal auditing reports directly to the board of directors.  This is because they are responsible for independently assessing the business operations.  They perform internal control testwork, which essentially is testing whether or not controls are actually effective.  For example, the internal auditor might randomly select a monthly reconciliation to inspect and ensure that it was appropriately reviewed by the controller.  The key is that they continually assess the effectiveness of the company’s processes.
  6. Chief Financial Officer (CFO) – This is the big one that most accountants aspire to be.  On the contrary to what most people will tell you, this job IS attainable.  However, you must understand that it’s much more difficult to become a CFO at a public company compared to a private company.  Public company CFO’s are ultimately responsible for the compiling and accuracy of the financial statements.  With that said, they oversee the management of all accounting related functions.  The controller reports directly to them and in many cases the director of financial reporting reports directly to the CFO.  The CFO is also in constant communication with the company CEO, general counsel, audit committee, external auditors, investors, and customers in some cases.

Public Accounting Firms:

  1. External Auditor – First and foremost, most CFO’s and controller’s started their careers as external auditors.  It’s a job that’s going to expose you to all areas of many different companies.  That’s because it’s the external auditor’s duty to examine the financial statements, test transactions, and test the effectiveness of internal controls.  To accomplish this, auditors select certain accounting areas (i.e. accounts receivable or inventory) to make sample selections and test a number of transactions to ensure they were accurately recorded and classified.  Additionally, the external auditor performs ‘walkthroughs’ within each of the accounting areas to gain an understand of the current processes.  Within that walkthrough the auditors document the processes around key controls identified by company management.  You really can’t beat the experience of being an external auditor.  You see such a wide range of company activity, and you’re not stuck working in one small function of a company.  External auditors gain a broad perspective, and that’s why they become great controller’s and/or CFO’s.  Be ready to work hard though!  External auditors are constantly under deadlines, and they very commonly work 60+ hours per week.  However, that’s not always the case.  Just be aware of what the audit firm culture is like before accepting a job.  Really understand the work expectations!
  2. Tax Specialist – Many accountants start their tax careers at a public accounting firm.  If you eventually want to do corporate or international tax work for a corporation, then you should seriously consider taking a job at a Big-4 public accounting firm.  However, if you’re more into individual tax work, then a regional firm will do just fine.  Many people end up spinning off their own tax consulting business or going into a wealth management career.  On a day-to-day basis you will be conducting tax research and completing tax returns.  As you gain experience and move up, you will begin having discussions with the client(s) to gain an understanding of their current situation and to advise.  This can be a great career path!  Once you take a couple tax classes in college and do an internship, you will have a much better idea of whether or not this is the accounting track you want to go down.
  3. Information Technology Auditors – Do you like technology, but also love business?  This might be an ideal career path for you!  Recall that external auditors must test the effectiveness of internal controls.  However, some internal controls are technology based in today’s corporate world.  For example, a company might have a control that the system performs an automated 3-way match prior to recording revenue.  It would be the duty of the information technology auditor to test whether the system is appropriately coded to perform that 3-way match and that the system successfully identifies outliers.  These people are constantly at different clients and working with different audit teams.  If you like being on the move and seeing different things in addition to having a passion for systems, then this career path could be for you!

Education Related Career Options:

  1. College Accounting Professor – We’ll start by saying that college accounting professors have GREAT jobs.  It’s very rewarding and the pay is incredible (expect $150,000).  However, the road to get there is long.  There are only so many Universities that actually have PhD programs in accounting, which is what you’ll need to apply to.  Of those small amount of programs, they typically only accept 2 – 3 applicants each year and in some cases only every other year.  To get accepted they look for public accounting experience, CPA certification, and a high GMAT score.  It’s tough to get accepted into a PhD program, and when you do it’s a 4 year process.  However, Universities are now waving tuition fees in exchange for being a graduate assistant because the industry is only meeting around 20% of the demand for accounting professors.  With all that said, once you graduate with your PhD and get a full time assistant professor position you will be responsible for teaching 2 – 3 classes per semester and conducting accounting related research.
  2. High School Accounting Teacher – Most accounting majors don’t pursue the degree to ultimately become a high school teacher, but there is a demand for qualified high school accounting (business) teachers.  Keep in mind that you’ll need to also have an education degree to compliment your accounting degree.  You obviously won’t make near as much with this track, but it could be a very rewarding career.

Accounting Education Requirments

 

YOU HAVE TO HIT THE BOOKS FOR THIS CAREER, BUT IT’S WORTH IT!

The educational requirements for an accounting career are pretty straight forward.  At the bare minimum, you need to earn an accounting bachelor of science degree from an accredited University’s business department.

Second, most highly successful people with an accounting background also obtain a Masters of Accountancy (1 year commitment) in addition to their bachelor degree.  In order to sit for the Certified Public Accountant (CPA) exam, one must earn 150 credit hours.  A bachelor of science (accounting) degree is only 120 hours.  Thus, most students need an additional 30 hours so they can sit for the CPA exam.

HELPFUL TIP:  You do NOT need to be a math genius to be an accounting major!  In fact, most accountants will tell you they aren’t very good at math.  Luckily, for the most part, you just need to be able to add, subtract, multiply, and divide.

Accounting Professional Certification Requirments

IT’S NOT REQUIRED, BUT THE CERTIFIED PROFESSIONAL ACCOUNTANT (CPA) EXAM IS STRONGLY RECOMMENDED

Taking the Certified Professional Accountant (CPA) exam is STRONGLY recommended, but it’s not required.  However, it is required for certain jobs.  For example, if you want to be a manager at a public accounting firm, then it’s going to be required that you pass the CPA exam.

Most students begin taking the CPA exam during their Masters of Accountancy program, and many finish before they start their full time accounting job.  Beware though, it’s much harder to devote the appropriate amount of time to studying when you are working full time.  So, make sure to knock out the exam during your masters program.

HELPFUL TIP:  Many people will tell you how hard the CPA exam is, but don’t let them influence your decision.  The key to the CPA exam is having a quality CPA prep course and ACTUALLY studying!  Most people simply don’t devote enough time to studying for the CPA, or they don’t study the right way.  You CAN pass the CPA exam.