Public Accounting - In public accounting, accountants perform a broad range of accounting, auditing, tax, and consulting activities for their clients, which may be corporations, governments, nonprofit organizations, or individuals. For example, some public accountants concentrate on tax matters, such as advising companies about the tax advantages and disadvantages of certain business decisions and preparing individual income tax returns. Others offer advice in the design of accounting and data-processing systems and the selection of controls to safeguard assets.

The four largest public accounting firms are known as the "Big Four": Ernst & Young, Deloitte, KPMG, and PricewaterhouseCoopers. Large regional accounting firms include Grant Thornton, BDO Seidman, Johnson Lambert & Co., LLP. and Cherry Bekaert & Holland.

Auditing

Auditing consists of a process of testing a firm's recorded transactions and reviewing its internal control system to determine if the company's financial statements have been prepared in accordance with "generally accepted accounting principles."

Management Advisory Services

This is a broad area of consulting services provided by public accounting firms. A major activity is the installation and review of accounting information systems for business and governmental units. Financial advisory services are also provided for businesses and individuals. Other services include advising companies on compensation schemes and pension plans.

Forensic Accounting

Some public accountants specialize in forensic accounting—investigating and interpreting white-collar crimes such as securities fraud and embezzlement, bankruptcies and contract disputes, and other complex and possibly criminal financial transactions, including money laundering by organized criminals. Forensic accountants combine their knowledge of accounting and finance with law and investigative techniques in order to determine whether an activity is illegal.

The Sarbanes Oxley Act of 2002, also known as Sarbox Act, SOX and Public Company Accounting Reform and Investor Protection Act of 2002 is a federal US law affecting publicly traded companies. This Act has come about becuase of the numerous corporate and accounting scandals in major corporations such as Enron and WorldCom. The act was supported, and is named after, two congressmen: Senator Paul Sarbanes and Rep. Michael Oxley. The Act includes 11 sections describing items such as corporate governance and financial disclosure. Sarbanes-Oxley also requires the Securities and Exchange Commission (SEC) to create new legislation to uphold this new law. In addition, the Public Accounting Company Oversight Board (PCAOB) was created as a public auditor to oversee and discipline public accounting firms.

Tax Services

Public accounting firms prepare local, state, and federal income tax returns for businesses and individuals. They also prepare estate, gift, and inheritance tax returns for individuals. Tax planning advice is a major activity of a tax department in a C.P.A. firm. Tax planning involves designing and structuring investment and sales activities to minimize tax liabilities within the bounds of sound economic decisions.

Corporate Accounting - Corporate Accounting is also referred to as operational, cost, managerial, industrial, or private accounting. Accountants working within this discipline record and analyze the financial information of the companies for which they work. The Corporte Accountant's work is aimed at internal users more than external users, but s(he) must continue to be in tune with generally accepted accounting principles as s(he) provides information for external reports (financial statements). Among their other responsibilities are budgeting, performance evaluation, cost management, and asset management. They analyze and interpret the financial information that corporate executives need in order to make sound business decisions. They also prepare financial reports for other groups, including stockholders, creditors, regulatory agencies, and tax authorities. Within accounting departments, Management Accountants may work in various areas, including financial analysis, planning and budgeting, and cost accounting.

Financial Accounting

The management of a corporation is responsible for the preparation of its financial statements. The independent auditor’s function is to attest to whether these statements have been prepared in accordance with generally accepted accounting principles. Corporate Accountants are responsible for recording the entity’s transactions and preparing its financial statements. This function is also referred to as general accounting within a corporation.

Management Accounting

This function provides management with the accounting information that is needed for planning and controlling routine and non-routine operations. Accounting activities in this area include budget preparation, cost accounting, and the preparation of performance reports that are used to evaluate the financial performance of departments and divisions of a corporation. Special reports and studies are also prepared for capital expenditure decisions, proposed new products, and specific problem areas in operations.

Internal Audit

Verify the accuracy of their organization’s internal records and check for mismanagement, waste, or fraud. Internal auditors examine and evaluate their firms’ financial and information systems, management procedures, and internal controls to ensure that records are accurate and controls are adequate to protect against fraud and waste.

Tax Accounting

Tax departments in a corporation perform essentially the same functions as their counterparts in public accounting. They are responsible for preparing state, federal, and foreign income tax returns. They are also responsible for tax planning to minimize the corporation’s tax liability.

Government Accounting - All levels of government need accountants. Government Accounting is work in the public sector, maintaining and examining the records of government agencies and auditing private businesses and individuals whose activities are subject to government regulations or taxation. Accountants employed by federal, state, and local governments guarantee that revenues are received and expenditures are made in accordance with laws and regulations.

Federal Government

The Internal Revenue Service employs revenue agents who audit individual, partnership, and corporate income tax returns. Revenue agents also audit estate and gift tax returns.

The General Accounting Office is a congressional agency that performs a wide variety of audits and investigations. They evaluate various public programs for efficiency and effectiveness and make recommendations for improvements and changes.

The Federal Bureau of Investigation hires accounting majors among others for careers as F. B. I. agents. Some of their investigative work involves financial investigations.

State Government

In addition to general positions that account for revenues and expenditures of the respective states, there are audit and tax positions available within state tax commissions, colleges and universities, and state agencies like the Department of Revenue. Examples include the North Carolina Department of Revenue, the California Franchise Tax Board, and the Virginia Department of Revenue.

Local Government

Accountants for cities, municipalities and public school districts prepare operating budgets and account for revenues and expenditures of the funds of these entities.

Public Accounting: Staff Auditor

Description: Staff Auditors take responsibility for the "dirty work" of the audit, engaging in the analyzing and verifying of activities. It is the staff accountant's respnsibility to investigate specific accounts assigned to them and to identify, resolve, and document any material issues.

Skill Requirements: A degree in accounting is a plus, but not required. The Big Four firms offer career programs designed to develop business majors with fundamental accounting knowledge into accounting professionals. In most cases, though, the Big Four are looking for an individual with an accounting degree, as well as the ability to work in dynamic situations, experience working in teams, and excellent communication skills. Firms also require proficiency in spreadsheet software. The skill requirements of regional firms is usually the same as Big Four, however, the regional firms typically do not have the latitude to hire non-accounting majors that they can put through a developmental program. In both cases, an internship in the field is routinely a requirement. Caution: Most states require Certified Public Accountant (CPA) candidates to have completed 150 hours of course work prior to sitting for the CPA exam, making it increasingly difficult for graduates without 150 credit hours to pursue career opportunities in public accounting. Please see our certification section for more details.

Training: A main differentiating factor between Corporate and Public Accounting is the volume and depth of training available to employees of large public accounting firms. Many of the Big Four and the larger regional firms have dedicated training centers with full-time educational staff. Within the first year of a public accounting staffer's career, he or she can expect to receive approximately three weeks of formal educational training. Entry-level hires also receive additional training on audit methodologies and procedures, as well as the firm culture and ethics standards. Upon obtaining a CPA certification, individuals must complete continuing education requirements. For CPA's this is 120 credit hours every three-year rolling period with a minimum of 20 CPE credits per year. Firms typically provide internal courses that satisfy these requirements. State requirements vary, so be sure to verify CPA requirements for the state in which you plan to be working.

Tasks:

• Quantify and illustrate routine financial reports, comparisons, impacts, and/or projections.
• Effectively communicate accounting information, policies, and/or procedures in a manner easily understood by the client.
• Investigate and analyze financial information.

Education: BS, BBA, MACC

Hours: 55+ week (may require travel)

Salary: $45,000 - $55, 000

Public Accounting: Tax Staff

Description: Like their audit counterparts, tax staff personnel perform the meat of the tax work. Unlike their audit counterparts, however, Tax Staff do not have as much client interaction. They spend a majority of their time preparing tax returns and researching tax issues.

Skill Requirements: New hires are accounting graduates and should be actively pursuing CPA certification. They should also:

• Be proficient in spreadsheet applications
• Possess above-average written and verbal communication skills
• Be excellent problem-solvers
• Be able to perform under time pressures and meet deadlines

Tasks:

• Prepare tax returns
• Research tax issues (Performs light research projects in the area of taxation, including payroll and sales tax)
• Prepares working trial balance, adjusting journal entries and tax accruals for stand-alone tax returns
• Performs ongoing tasks assigned by a Tax Senior or Tax Manager

Skill Requirements: A degree in accounting is a plus, but not required. New hires are usually accounting or finance graduates. They should also have:

• Good interpersonal skills with ability to build personal and team-based relationships with staff, managers and leaders at all level.
• The ability to perform under time pressures and meet deadlines.
• Knowledge of spreadsheet applications (eg. MS Excel).

Tasks: Tasks are specific to the various accounting areas (eg. Accounts Payable, Accounts Receivable), but in many cases, a Staff Accountant will complete tasks across multiple areas. Typical tasks for a Staff Accountant include:

• Determining and implementing cost accounting procedures and methods.
• Preparing and analyzing cost reports and costing audits.
• Examining and reviewing unusual financial records and ensuring financial data is allocated correctly.
• Preparing invoices for clients.
• Managing the expense reimbursement process and other general accounting functions.
• Participating and contributing to the month-end close.
• Preparing monthly and quarterly account reconciliations.

Public Accounting Firms

Corporate Accounting

Senior Auditor or Tax Senior (2-3 yrs): Staff Auditors or Tax Staff can be promoted to Senior Auditor or Tax Senior, respectively, after 2-3 years of service. Audit Seniors supervise the audit fieldwork of Staff Auditors and review their work products to ensure the audit is thorough and properly documented. They are responsible for managing and resolving issues. Seniors are also responsible for identifying and documenting audit risks, creating and managing client relationships, administering budget issues and ensuring that the Audit Manager and Partner are informed of all relevent items. Tax Seniors prepare tax returns, research tax issues, and offer suggestions for tax planning. Tax Seniors typically begin specializing in a particular tax area or industry. This prepares them to become experts as they grow within the tax path of the firm.

Senior Accountant or Senior Internal Auditor (2-3 yrs): Staff Accountants or Junior Internal Auditors can be promoted to Senior Accountant or Senior Internal Auditor within 2-3 years. It is common, however, for Junior Internal Auditors to have more difficulty moving up due to the limited number of positions available, as well as the scope of their specialization. Within corporate accounting, Senior Accountants are typically responsible for supervising the work of Staff Accountants. During this stage, Senior Accountants become more specialized (eg. Cost, Accounts Receivable). This prepares Senior Accountants for thier next step. Senior Internal Auditors are responsible for testing the internal control and accounting information systems.

Audit Manager or Tax Manager (3-4 yrs): After 3-4 years, Senior Auditors can be promoted to Audit Manager or Tax Senior can be promoted to Tax Manager. The manager maintains the day-to-day responsibility for managing the client relationships. The Audit Manager performs a high level review of all the audit work after the senior is satisfied with the thoroughness and resolution of all issues. The manager is also responsible for audit program approval, personnel scheduling, audit working paper review, and final determination of billings for engagements. Tax Managers expected to have a strong grasp of the technical tax issues applicable to their specific industry or tax function.

Accounting Manager or Internal Audit Manager (4-6 yrs): Both are typically promoted after serving 5-6 years as a Senior. Accounting Managers assist the controller and are often responsible for a specific functional area (eg. financial accounting or budgetary planning and control). Internal Audit Managers direct the staff responsible for systematically sampling the adequacy and reliability of internal control systems. It is not uncommon to see Internal Audit Managers leave to work with firms specializing in Forensic Accounting.

Audit or Tax Principals / Audit or Tax Partners - Partners are responsible for overall client relationships. Partners are the sales people of the firm. They lead the business development efforts. Partners have ultimate responsibility for signing the audit opinion and are responsible for the overall audit and coordination for partner reviews and ongoing communication with the firm's headquarters. Tax Partners have often moved up the ranks based on their deep knowledge or expertise in a given industry or tax function. The main difference between Principals and Partners (Tax or Audit) is that Partners are invited to hold an equity stake in the firm, whereas Principals have not been selected.

Controller and Chief Financial Officer: Both Internal Audit Managers and Accounting Managers can be promoted to Controller and eventually CFO, but this takes time and hardwork. The Controller functions as the Chief Accounting Executive responsible for organizing, directing, and controlling the work of the accounting personnel in collecting, summarizing and interpreting financial data. The CFO advises the president of the organization with respect to financial reporting, financial stability, and liquidity. The CFO directs the work of the Controller and sometimes the Internal Audit Manager.