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What is a CPA? These three letters mean that you have received a broad-based education. They mean you have passed all parts of a very difficult exam. They mean you have the knowledge, skills and abilities to be a trusted business advisor to your clients or employer.
They mean you feel comfortable with the latest technology. They mean you are an ethical individual who can provide an independent analysis. CPA's are many things. They are chief financial officers for Fortune 500 companies and advisors to small neighborhood businesses.
They work for large and small public accounting firms. They are well-respected strategic business advisors and decision-makers. They act as consultants on many issues, including taxes and accounting. To become a Certified Public Accountant (CPA) you need to meet the requirements of the state or jurisdiction in which you wish to practice. These requirements, which vary from state to state, are established by law and administered by the state boards of accountancy.
To qualify for certification, you must: ? Have professional work experience in public accounting. The Uniform CPA Exam is a prerequisite for the CPA certificate because it is the primary way Boards of Accountancy measures the competence of CPA candidates. ? Complete a program of study in accounting at a college / university .
The American Institute of Certified Public Accountants (AICPA) recommends at least 150 semester hours to obtain the common body of knowledge for becoming a CPA. ? Pass the Uniform CPA Examination, which is developed and graded by the AICPA. Boards of Accountancy also rely on additional means to ensure that a candidate has the necessary technical abilities and character attributes to become a CPA. These may include interviews, letters of reference, investigation of educational background, and affidavits of employment. In addition, some boards of accountancy administer an ethics examination to assess a candidate's knowledge of the rules of professional conduct. The Board of Examiners of the AICPA is responsible for preparing the Uniform CPA Examinations and for operating the Advisory Grading Service, both adopted by the boards of accountancy in all fifty states, the District of Columbia, Guam, Puerto Rico, and the U.
S. Virgin Islands. The Examination is given twice each year, in May and November, and its duration is 15 hours long. The exam is administered over a two-day period within the boundaries of the fifty-four jurisdictions that use the exam.
It is given and graded in English only. The exam consists of four sections: Business Law & Professional Responsibilities; Auditing; Accounting & Reporting- Taxation, Managerial, and Governmental and Non-Profit Organizations; and Financial Accounting & Reporting-Business Enterprises. Once you have become a CPA, most states require you to take a specified amount of continuing education courses annually to retain your professional license to practice. As a CPA, there are no limits to the career opportunities available to you. CPAs work in public practices, business industries, government and education. In public accounting, the CPA serves many clients as an objective outsider or in an advisory position.
Currently there are over 46, 000 public accounting firms in the US ranging in size from small local accounting practice to large international CPA firms. To name a few, public accounting services include: ? Auditing- is one of the most important and best-known services provided by CPAs in public practice. To better protect consumers and investors, the Securities and Exchange Commission (SEC) requires every publicly held company to issue an annual financial statement. Independent CPA's examines these financial statements and the results are referred to as an "audit." The CPA's role as an auditor is to examine a company's financial statements in order to assure stockholders and other financial statement users that a company's financial position is reported fairly. ?
Assurance Services- is defined as services provided by a CPA that improve the quality of information, or its context, for decision makers. Such information can be financial or non-financial, about past events or conditions or about on-going processes or systems. ? Environmental Accounting- CPAs get involved in everything form environmental compliance audits and systems and procedures audits to handling claims and disputes. ? Forensic Accounting- looks beyond the face value of accounting records to determine if fraud has been committed.
Also known as an investigative accountant or fraud auditor, the forensic accountant searches for evidence of criminal conduct or assist in the determination of claimed damages. Personal Financial Planning CPA's provide assistance to individuals and companies in identifying financial objectives and counseling on risk, liquidity, management and tax characteristics of investments. CPAs in business and industry work for companies ranging from family-owned businesses to Fortune 500 companies. They are considered strategic business partners of their organizations and work in a variety of different areas, to name a few: ?
Financial Management- CPAs are responsible for analyzing a company's future financing needs. ? Financial Reporting- accumulates and verifies the data required for preparation of financial statements. CPA's are often in charge of the design, implementation, and maintenance of the computer system used in the preparation of financial statements. ? Internal Auditing- the CPA as an internal auditor is responsible for providing an objective review of the company's financial and operating systems. ? Tax Planning- CPA responsibilities include, determining the company's liability to various taxing authorities for income tax, licenses, sales tax, property tax, and payroll tax. At the federal level, some examples of where a CPA would work include the Federal Bureau of Investigation, the Internal Revenue Service, Department of the Treasury, and the General Accounting Office.
They may be involved with investigating white-collar crime, managing financial statement audits for government agencies, or performing research and analysis on financial management issues. At the state and local levels, CPAs are involved in conducting financial, performance or compliance audits, which may include analyzing a school district's ability to remain viable, the propriety of expenditures for constructing prisons, or the regulatory compliance of hazardous waste programs. A career in accounting can provide a college graduate with a competitive entry-level salary and long-term growth potential. The following chart illustrates the salary ranges an entry level professional can expect in public accounting and corporate accounting during the first years of employment (Robert Half and Accountemps Salary Guide 1999).
Employer 0 - 1 Year 1 - 3 Year Experience Public accounting (large firm) $ 32, 000 - $ 36, 000 $ 35, 000 - $ 41, 000 Public accounting (medium firm) $ 28, 000 - $ 32, 000 $ 31, 000 - $ 38, 000 Public accounting (small firm) $ 26, 000 - $ 30, 000 $ 30, 000 - $ 37, 000 Corporate accounting (company w / more than $ 150 million in sales) $ 30, 000 - $ 34, 000 $ 34, 000 - $ 45, 000 Corporate accounting (company w/$ 15 million to $ 150 million in sales) $ 29, 000 - $ 33, 000 $ 32, 000 - $ 41, 000 Corporate accounting (company w / less than $ 15 million in sales) $ 27, 000 - $ 43, 000 $ 31, 000 - $ 37, 000 Note: Add 10 % to your salary outlined above if you have a graduate degree. Add 10 % to your salary if you are a CPA. It's important to note that factors such as geographic location, length of experience, level of education, CPA designation, and the size of the employer all play a role in determining salary. As the economy grows the number of business establishments increases requiring more accountants and auditors to set up their financial, technological and internal control systems, provide tax preparation and planning assistance, as well as management consulting advice and other business advisory services.
The volume and complexity of financial and non-financial information will continue to expand, requiring the knowledge of accountants and auditors to interpret and analyze the data and participate in the decision making process. Becoming proficient in the latest accounting and budgeting software packages and keeping abreast of new technologies is critical to the accounting professional's success. Bibliography American Institute for Certified Public Accountants (2000). Available: web Blensly, D. L. , and Plank, T. M. (1989).
Accounting Desk Book, (9 th ed. ) Meigs, W. B. and R. F. (1989), Accounting: The Basis for Business Decisions, (8 th ed. ) Rink & Robinson's CPA's (1998). Certified Public Accountants & Consultants. Available: web Robert Half and Accountemps Salary Guide (1999).
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Research essay sample on Becoming A Cpa Certified Public Accountant Job Profile
Accountants and Auditors
Career, Salary and Education Information
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What Accountants and Auditors Do[About this section] [To Top]
Accountants and auditors prepare and examine financial records. They ensure that financial records are accurate and that taxes are paid properly and on time. Accountants and auditors assess financial operations and work to help ensure that organizations run efficiently.
Duties of Accountants and Auditors
Accountants and auditors typically do the following:
- Examine financial statements to ensure that they are accurate and comply with laws and regulations
- Compute taxes owed, prepare tax returns, and ensure that taxes are paid properly and on time
- Inspect account books and accounting systems for efficiency and use of accepted accounting procedures
- Organize and maintain financial records
- Assess financial operations and make best-practices recommendations to management
- Suggest ways to reduce costs, enhance revenues, and improve profits
In addition to examining and preparing financial documentation, accountants and auditors must explain their findings. This includes preparing written reports and meeting face-to-face with organization managers and individual clients.
Many accountants and auditors specialize, depending on the particular organization that they work for. Some work for organizations that specialize in assurance services (improving the quality or context of information for decisionmakers) or risk management (determining the probability of a misstatement on financial documentation). Other organizations specialize in specific industries, such as healthcare.
The following are examples of types of accountants and auditors:
Public accountants perform a broad range of accounting, auditing, tax, and consulting tasks. Their clients include corporations, governments, and individuals.
Public accountants work with financial documents that clients are required by law to disclose. These include tax forms and balance sheet statements that corporations must provide to potential investors. For example, some public accountants concentrate on tax matters, advising corporations about the tax advantages of certain business decisions or preparing individual income tax returns.
Public accountants, many of whom are Certified Public Accountants (CPAs), generally have their own businesses or work for public accounting firms. Publicly traded companies are required to have CPAs sign documents they submit to the Securities and Exchange Commission (SEC), including annual and quarterly reports.
Some public accountants specialize in forensic accounting, investigating financial crimes such as securities fraud and embezzlement, bankruptcies and contract disputes, and other complex and potentially criminal financial transactions. Forensic accountants combine their knowledge of accounting and finance with law and investigative techniques to determine if an activity is illegal. Many forensic accountants work closely with law enforcement personnel and lawyers during investigations and often appear as expert witnesses during trials.
Management accountants, also called cost,managerial,industrial, corporate, or private accountants, record and analyze the financial information of the organizations for which they work. The information that management accountants prepare is intended for internal use by business managers, not by the general public.
Management accountants often work on budgeting and performance evaluation. They also may help organizations plan the cost of doing business. Some may work with financial managers on asset management, which involves planning and selecting financial investments such as stocks, bonds, and real estate.
Government accountants maintain and examine the records of government agencies and audit private businesses and individuals whose activities are subject to government regulations or taxation. Accountants employed by federal, state, and local governments ensure that revenues are received and spent in accordance with laws and regulations.
Internal auditors check for mismanagement of an organization's funds. They identify ways to improve the processes for finding and eliminating waste and fraud. The practice of internal auditing is not regulated, but The Institute of Internal Auditors (IIA) provides generally accepted standards.
External auditorsperform similar duties to internal auditors, but are employed by an outside organization, rather than the one they are auditing. They review clients' financial statements and inform investors and authorities that the statements have been correctly prepared and reported.
Information technology auditors are internal auditors who review controls for their organization's computer systems to ensure that the financial data comes from a reliable source.
Work Environment for Accountants and Auditors[About this section] [To Top]
Accountants and auditors hold about 1.4 million jobs. The largest employers of accountants and auditors are as follows:
|Accounting, tax preparation, bookkeeping, and payroll services||25%|
|Finance and insurance||8|
|Management of companies and enterprises||7|
Most accountants and auditors work in offices, but some work from home. Although they complete much of their work alone, they sometimes work in teams with other accountants and auditors. Accountants and auditors may travel to their clients' places of business.
Accountant and Auditor Work Schedules
Most accountants and auditors work full time. About 1 in 5 work more than 40 hours per week. Longer periods of work are typical at certain times of the year, such as at the end of the budget year or during tax season.
How to Become an Accountant or Auditor[About this section] [To Top]
Get the education you need:Find schools for Accountants and Auditors near you!
Most accountants and auditors need at least a bachelor's degree in accounting or a related field. Certification, including the Certified Public Accountant (CPA) credential, can improve job prospects.
Education for Accountants and Auditors
Most accountant and auditor positions require at least a bachelor's degree in accounting or a related field. Some employers prefer to hire applicants who have a master's degree, either in accounting or in business administration with a concentration in accounting.
A few universities and colleges offer specialized programs, such as a bachelor's degree in internal auditing. In some cases, those with associate's degrees, as well as bookkeepers and accounting clerks who meet the education and experience requirements set by their employers, get junior accounting positions and advance to accountant positions by showing their accounting skills on the job.
Many colleges help students gain practical experience through summer or part-time internships with public accounting or business firms.
Licenses, Certifications, and Registrations for Accountants and Auditors
Every accountant filing a report with the Securities and Exchange Commission (SEC) is required by law to be a Certified Public Accountant (CPA). Many other accountants choose to become a CPA to enhance their job prospects or to gain clients. Many employers will pay the costs associated with the CPA exam.
CPAs are licensed by their state's Board of Accountancy. Becoming a CPA requires passing a national exam and meeting other state requirements. Almost all states require CPA candidates to complete 150 semester hours of college coursework to be licensed, which is 30 hours more than the usual 4-year bachelor's degree. Many schools offer a 5-year combined bachelor's and master's degree to meet the 150-hour requirement, but a master's degree is not required.
A few states allow a number of years of public accounting experience to substitute for a college degree.
All states use the four-part Uniform CPA Examination from the American Institute of Certified Public Accountants (AICPA). Candidates do not have to pass all four parts at once, but most states require that candidates pass all four parts within 18 months of passing their first part.
Almost all states require CPAs to take continuing education to keep their license.
Certification provides an advantage in the job market because it shows professional competence in a specialized field of accounting and auditing. Accountants and auditors seek certifications from a variety of professional societies. Some of the most common certifications are listed below:
The Institute of Management Accountants offers the Certified Management Accountant (CMA) to applicants who complete a bachelor's degree. Applicants must have worked at least 2 years in management accounting, pass a two-part exam, agree to meet continuing education requirements, and comply with standards of professional conduct. The exam covers areas such as financial statement analysis, working-capital policy, capital structure, valuation issues, and risk management.
The Institute of Internal Auditors (IIA) offers the Certified Internal Auditor (CIA) to graduates from accredited colleges and universities who have worked for 2 years as internal auditors and have passed a four-part exam. The IIA also offers the Certified in Control Self-Assessment (CCSA), Certified Government Auditing Professional (CGAP), Certified Financial Services Auditor (CFSA), and Certification in Risk Management Assurance (CRMA) to those who pass the exams and meet educational and experience requirements.
ISACA offers the Certified Information Systems Auditor (CISA) to candidates who pass an exam and have 5 years of experience auditing information systems. Information systems experience, financial or operational auditing experience, or related college credit hours can be substituted for up to 3 years of experience in information systems auditing, control, or security.
For accountants with a CPA, the AICPA offers the option to receive any or all of the Accredited in Business Valuation (ABV), Certified Information Technology Professional (CITP), or Personal Financial Specialist (PFS) certifications. The ABV requires passing a written exam, completion of at least six business valuation projects, and 75 hours of continuing education. The CITP requires 1,000 hours of business technology experience and 75 hours of continuing education. Candidates for the PFS also must complete a certain amount of work experience and continuing education, and pass a written exam.
Advancement for Accountants and Auditors
Some top executives and financial managers have a background in accounting, internal auditing, or finance.
Entry-level public accountants can advance to senior positions with more responsibility. Those who excel may become supervisors, managers, or partners; open their own public accounting firm; or transfer to executive positions in management accounting or internal auditing in private firms.
Management accountants often start as cost accountants, junior internal auditors, or trainees for other accounting positions. As they rise through the organization, they may advance to accounting manager, chief cost accountant, budget director, or manager of internal auditing. Some become controllers, treasurers, financial vice presidents, chief financial officers, or corporation presidents.
Public accountants, management accountants, and internal auditors can move from one aspect of accounting and auditing to another. Public accountants often move into management accounting or internal auditing. Management accountants may become internal auditors, and internal auditors may become management accountants. However, it is less common for management accountants or internal auditors to move into public accounting.
Important Qualities for Accountants and Auditors
Analytical skills. Accountants and auditors must be able to identify issues in documentation and suggest solutions. For example, public accountants use analytical skills in their work to minimize tax liability, and internal auditors use these skills to detect fraudulent use of funds.
Communication skills. Accountants and auditors must be able to listen carefully to facts and concerns from clients, managers, and others. They must also be able to discuss the results of their work in both meetings and written reports.
Detail oriented. Accountants and auditors must pay attention to detail when compiling and examining documentation.
Math skills. Accountants and auditors must be able to analyze, compare, and interpret facts and figures, although complex math skills are not necessary.
Organizational skills. Strong organizational skills are important for accountants and auditors, who often work with a range of financial documents for a variety of clients.
Accountant and Auditor Salaries[About this section] [More salary/earnings info] [To Top]
The median annual wage for accountants and auditors is $68,150. The median wage is the wage at which half the workers in an occupation earned more than that amount and half earned less. The lowest 10 percent earned less than $42,140, and the highest 10 percent earned more than $120,910.
The median annual wages for accountants and auditors in the top industries in which they work are as follows:
|Finance and insurance||$72,950|
|Management of companies and enterprises||70,790|
|Accounting, tax preparation, bookkeeping, and payroll services||68,130|
Most accountants and auditors work full time. About 1 in 5 work more than 40 hours per week. Longer hours are typical at certain times of the year, such as at the end of the budget year or during tax season.
Job Outlook for Accountants and Auditors[About this section] [To Top]
Employment of accountants and auditors is projected to grow 10 percent over the next ten years, faster than the average for all occupations. Globalization, a growing economy, and a complex tax and regulatory environment are expected to continue to lead to strong demand for accountants and auditors.
In general, employment growth of accountants and auditors is expected to be closely tied to the health of the overall economy. As the economy grows, these workers will continue to be needed to prepare and examine financial records. In addition, as more companies go public, there will be greater need for public accountants to handle the legally required financial documentation.
The continued globalization of business may lead to increased demand for accounting expertise and services related to international trade and international mergers and acquisitions.
Technological change is expected to affect the role of accountants over the next 10 years. As platforms such as cloud computing become more widespread, some routine accounting tasks may become automated. Although this will allow accountants to become more efficient, this change is not expected to reduce the overall demand for accountants. Instead, with the automation of routine tasks, such as data entry, the advisory and analytical duties of accountants will become more prominent.
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Job Prospects for Accountants and Auditors
Demand for accountants may lead to good prospects for entry-level positions. However, competition will be stronger for jobs with the most prestigious accounting and business firms.
Accountants and auditors who have earned professional recognition, especially as Certified Public Accountants (CPAs), should have the best prospects. Job applicants who have a master's degree in accounting or a master's degree in business administration (MBA) with a concentration in accounting also may have an advantage.
|Occupational Title||Employment, 2016||Projected Employment, 2026||Change, 2016-26|
|Accountants and auditors||1,397,700||1,538,000||10||140,300|
Careers Related to Accountants and Auditors[About this section] [To Top]
Bookkeeping, Accounting, and Auditing Clerks
Bookkeeping, accounting, and auditing clerks produce financial records for organizations. They record financial transactions, update statements, and check financial records for accuracy.
Budget analysts help public and private institutions organize their finances. They prepare budget reports and monitor institutional spending.
Cost estimators collect and analyze data in order to estimate the time, money, materials, and labor required to manufacture a product, construct a building, or provide a service. They generally specialize in a particular product or industry.
Financial analysts provide guidance to businesses and individuals making investment decisions. They assess the performance of stocks, bonds, and other types of investments.
Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.
Management analysts, often called management consultants, propose ways to improve an organization's efficiency. They advise managers on how to make organizations more profitable through reduced costs and increased revenues.
Personal Financial Advisors
Personal financial advisors provide advice on investments, insurance, mortgages, college savings, estate planning, taxes, and retirement to help individuals manage their finances.
Postsecondary teachers instruct students in a wide variety of academic and technical subjects beyond the high school level. They may also conduct research and publish scholarly papers and books.
Tax Examiners and Collectors, and Revenue Agents
Tax examiners and collectors, and revenue agents determine how much is owed in taxes and collect tax from individuals and businesses on behalf of federal, state, and local governments. They review tax returns, conduct audits, identify taxes owed, and collect overdue tax payments.
Top executives devise strategies and policies to ensure that an organization meets its goals. They plan, direct, and coordinate operational activities of companies and organizations.
*Some content used by permission of the Bureau of Labor Statistics, U.S. Department of Labor.