Are you thinking of exploring a career as an accountant? Or perhaps you’re thinking of hiring one?
We asked experts to explain some of the duties of an accountant so that you will have a better understanding of what their skills sets are.
Accounting work is interesting and challenging
It’s interesting to hear what people “think” I do. I remember telling people I was a CPA. The typical response to that was, “Oh, so you do taxes?”
Well, for me, that was not true and I would explain what I did. When I became a CFE and CFF, I remember telling people I was a forensic CPA. I remember once getting a response that was, “Oh, so you do taxes for dead people?” Yeah, that’s not right either.
I would explain that I work on a lot of cases where I help people figure out who took the money, how much did they take and where’s the money now.
What Does a Forensic Accountant Do?
It varies from case to case, day to day. One day I might be working on a divorce case where a husband is hiding money from his wife. I have to figure out if money is missing and if so, how much. I also have to be prepared to answer the question, “Where did the money go and where is it now?”
On another day, I might be working on a case where a bookkeeper has deleted transactions from the company’s general ledger. The bookkeeper is “cooking the books” and I have to figure out how and why.
On yet another day, I might be working with an attorney to draft a list of questions to be asked in a deposition of a defendant, or working to draft a list of documents and records to be requested for my investigation.
Finally, for most cases, my work will typically end up in a written report. Forensic accounting reports will include an executive summary, some background on the case, the scope of the forensic work, the procedures I performed, my findings, my recommendations and an appendix with supporting documents.
A short report might be 50 pages. So, at the end of the day, forensic accounting involves a lot of reading and writing…and no two days are the same.
There are some common themes in forensic accounting. These cases take a lot of time and can cost clients a lot of money. From start to finish, these cases are measured in months and years, not days and weeks. Requesting a bank statement might require an attorney to subpoena a bank. The bank may have to locate records from six years ago and redact parts of the statement. No part of that moves quickly.
Forensic accounting cases are also document intensive. It’s common to receive, review, index, file, and reference thousands of pages of documents coming from attorneys and clients.
In a small case, I might get five thousand pages of tax returns, bank statements, contracts, check images, invoices, emails, ledgers, journals, credit card statements and so on.
Because I often need to know if I have a complete and accurate set of records, I will also verify, for example, that I have every page of every bank statement between 2016 and 2018 and that the ending balance from month #1 agrees to the beginning balance of month #2.
It’s tough to give a definite answer
There are so many different varieties of accountants that it’s tough to give a definite answer to “what accountants do.” That being said, I can tell you pretty specifically about the things I have done in my career as a CPA, and here they are.
Accountants use spreadsheets
When people hear that I’m an accountant, they assume that I’m really good at math. I can see where this misconception comes from, given that accountants by definition work with numbers.
But the reality is that accountants use spreadsheets and software rather than their own mental arithmetic skills to come up with their numbers. So I think a better assumption about accountants is that we’re really good at Microsoft Excel rather than math!
Accountants write a lot
I’ve written a lot of words as an accountant. Examples include writing emails to clients on a daily basis explaining complex tax or accounting issues in language they can understand, drafting memos documenting tax positions, and writing instructions to others on my team so they can do their jobs better.
While it’s true that some people in the broader accounting profession such as bookkeepers probably don’t do very much writing, most accountants do more writing than one might think.
Accountants work in teams
For many people, the word “accountant” conjures up an image of someone working alone in a cubicle, pecking at their keyboard and ten-key calculator for eight hours a day and not speaking a word to anyone else.
While that may be the reality for some low-level clerical accounting positions, this was never true for me. I was always working in teams to get projects done, and I enjoyed it.
Accountants have their hands in many exciting areas
The image of an isolated, socially-awkward accountant sitting in a dimly lit room, punching away on an adding machine, and muttering curses at the tax code is an antiquated one but still popular.
Contrary to popular belief, accountants have their hands in many exciting areas within the business world and personal lives. What an accountant does is only limited by his or her imagination.
Accountants with big imaginations can find themselves behind the scenes with celebrities, on stage with the latest tech start-ups, in the board room of blue-chip companies, in the field with community-focused nonprofit organizations, and in more fun places sharing their valuable knowledge.
Similar to the personal attorney, accountants (especially CPAs) are now regularly relied upon for many purposes. They manage daily operations and business risk, plan strategies, evaluate financing options, prevent fraud, and prepare financial information – a lot more than argue with Uncle Sam.
So, the next time you hear “accountant,” replace that antiquated image appearing in your head with the accountant of today – the one that’s likely in the skybox of your favorite sports team or backstage with your favorite celebrity after completing a job well done for a happy client.
Accountants are an asset to a business
They help business owners maintain accurate, reliable and timely financial records. In addition, accountants help businesses interpret the story behind the numbers.
They are equipped with the expertise to help businesses use their financial information to make wise business decisions, increase cash flow, reduce tax liabilities and maximize profits.
The foundation of a successful business is built on its financial foundation. Accountants help build and maintain a solid foundation for businesses.
Michael Kern, CPA
Founder | Kore Talents
Accountants do much more than just taxes
When I tell people that I’m a CPA the very next question I always get is “Can you do my taxes?!” The thing most people don’t understand is that accountants do much more than just taxes. Some accountants might hardly even touch taxes.
In my career as a CPA, I have had many different roles. I’ve audited financial statements, prepared tax returns, performed financial reporting and analysis, prepared quarterly forecasts and annual budgets, interfaced with all departments of a company, and much much more.
The life of a CPA is not as cut and dry as the average person may think. There are many different paths an accountant can take…some of which may hardly be related.
Craig W. Smalley, EA
Founder & CEO, CWSEAPA®
The term accountant is an ambiguous term
For example, you don’t need a license, or education to call yourself an accountant in most states.
The main types of accountants are CPA’s, who are licensed by the state they practice in. Most CPAs are a jack-of-all-trades. Most CPAs audit financial statements for companies that are going public, or need them for some reason. Very few specialize in taxation.
Enrolled agents (EA), are licensed by the Internal Revenue Service to represent taxpayers through all levels of the IRS. All EA’s specialize in tax, taxation, tax planning, and representation, just to name a few.
Un-licensed accountants, typically work for a big tax chain. They take a six-week course and then work during tax season. Some other unlicensed accountants try to do bookkeeping for clients.
CPA’s and EA’s typically help small to medium-sized businesses. Those specializing in tax produce tax-basis financial statements in order to mitigate a client’s tax obligations and to show how a company is doing financially.
Michael C. Rogers, CPA
Owner, Sell Michael Your House
Accounting isn’t just recording debits and credits
Warren Buffett once said, “Accounting is the language of business.” As a loyal Buffett follower, I believe this is true.
Being an accountant has allowed me to transition from the corporate world to being a full-time a self-employed real estate investor. I am able to read financial statements, business proposals and quickly determine if the figures are reliable and if the project will be profitable.
I also use my accounting degree to prepare financial statements and loan proposals for banks when I am purchasing properties. I have had bankers tell me that my CPA license adds extra credibility when they are considering lending to me.
Accounting isn’t just recording debits and credits. Being able to understand the language of business opens doors for entrepreneurs and business-minded individuals.
Related: 18 Best Startup Books
Marina Babaian, CPA
Accountant, MBridge Consulting Group
Accountants speak a different language, one most people don’t instinctively understand
Accountants are typically known for being tax specialists or auditors however accountants also translate the financial transactions of a company to help tell a story of the financial health of the company.
For example, a company may have over 100 credit card transactions in a month but what do these expenses mean? How do they affect the profitability of your business?
Accountants don’t only help build the picture but they also provide tools to help understand the story they’ve written. These tools can be as simple as an asset turnover ratio to a system extension.
Accountants help identify the proper categorization and method. The expert accountant provides standardization, seamless systems, and understanding.
Frequently Asked Quuestions
What is the job outlook for accountants?
The job outlook for accountants is generally positive, as businesses will always need skilled professionals to manage their finances.
According to the Bureau of Labor Statistics, employment of accountants and auditors is projected to grow by 6% between 2021 and 2031, about as fast as the average for all occupations.
Some factors driving this growth include:
Increased globalization: As more companies operate across borders, the need for skilled accountants knowledgeable about international financial regulations and tax laws increases.
Changing financial regulations: As financial regulations become more complex, companies need accountants to help them stay compliant and avoid penalties.
Technological advancements: As technology continues to change the accounting profession, accountants proficient in financial software and technology will be in high demand.
What are some career paths for accountants?
There are several common career paths for accountants, including:
Public accounting: Public accountants work for accounting firms, providing clients with services such as tax preparation, auditing and assurance, and consulting services. Public accounting firms are typically organized into audit, tax, and advisory practices and offer a variety of career opportunities.
Corporate accounting: Corporate accountants work for businesses and are responsible for managing the company’s financial data, including financial reporting, budgeting, and forecasting. They may also be responsible for compliance with accounting regulations and tax laws.
Government accounting: Government accountants work for federal, state, or local government agencies and manage public funds and ensure compliance with financial regulations and standards.
Forensic accounting: Forensic accountants specialize in investigating financial fraud and other financial crimes and may work for law enforcement agencies, accounting firms, or consulting firms.
Internal auditing: Internal auditors work within an organization and are responsible for evaluating the organization’s internal controls and financial reporting systems to ensure compliance with relevant regulations and standards.
Management accounting: Management accountants work for organizations and assist management with financial analysis so they can make informed business decisions.
These are just a few examples of the many career paths available to accountants. With the right education, skills, and experience, accountants can pursue a wide range of rewarding and fulfilling careers.
What challenges does the accounting profession face?
The accounting profession faces several challenges, both current and emerging. Some of the most important challenges facing the profession are:
Regulatory changes: It can be challenging for accountants to keep up with changes in accounting regulations, and they may require significant changes in accounting practices and procedures.
Cybersecurity threats: Because accountants handle sensitive financial data, they are a prime target for cyberattacks. Keeping up with the latest cybersecurity threats and implementing appropriate protective measures can be a major challenge.
Increasing competition: The accounting profession is becoming increasingly competitive as more professionals enter it, and technology makes it easier for non-accountants to perform certain accounting tasks.
Talent retention: As the economy improves, accountants may be more likely to leave their jobs for higher-paying positions or opportunities for advancement.
Skills gap: Many accountants feel a gap between the skills they learned in school and the skills they need to succeed in their jobs. Bridging this gap can be a challenge for both accountants and employers.
Embracing technology: As technology continues to change the accounting profession, accountants must be able to embrace and utilize new technology to remain competitive.
What trends are emerging in the accounting profession?
The accounting profession is constantly evolving, with new trends and technologies influencing how accountants work. Some of the emerging trends in accounting include:
Artificial intelligence and machine learning: AI and machine learning are being used to automate routine accounting tasks, such as data entry and reconciliations, and to perform complex analysis and forecasting.
Blockchain technology: Blockchain technology is being explored as a way to improve transparency and security in accounting, particularly in auditing and financial reporting.
Sustainability accounting: As companies increasingly focus on sustainability and social responsibility, accountants play a larger role in measuring and reporting environmental and social impacts.
Data analytics: The explosion of data creates new opportunities for accountants to analyze large amounts of data and provide valuable insights to their clients or businesses.
Remote work: The COVID-19 pandemic has accelerated the trend toward remote work in the accounting profession. Many accountants now work from home or in other remote locations.
What are the most common misconceptions about accountants?
There are some common misconceptions about accountants that should be addressed. Some of these misconceptions are:
Accountants only work with numbers: While it is true that accountants work extensively with financial data, they also need strong communication and analytical skills to be successful in their role. They need to be able to interpret complex financial information and explain it to stakeholders who may not have a financial background.
All accountants are the same: There are many different types of accountants with varying levels of expertise and areas of specialization. Understanding the different types of accounting jobs and the qualifications required to perform them is important.
Accountants are boring: Accountants may not be the most glamorous profession, but they’re an important and rewarding profession for those who enjoy working with numbers and helping businesses succeed. In addition, many accountants have opportunities for advancement and a high level of job security.
Accountants are only focused on the past: While accountants spend a lot of time analyzing past financial data, they also play a critical role in planning for the future of businesses. They can provide insight and recommendations to improve financial performance and achieve long-term goals.
What are some key ethical considerations for accountants?
Ethical considerations are critical for accountants, as they manage sensitive financial information and ensure that companies comply with relevant regulations and laws.
Key ethical considerations for accountants include:
Confidentiality: Accountants must maintain the confidentiality of their client’s financial information and not disclose it to unauthorized parties.
Independence: Accountants must be independent and not let personal interests or bias influence their recommendations and decisions.
Professional competence: Accountants must maintain high professional competence and stay up-to-date on relevant regulations and standards.
Objectivity: Accountants must be objective and not allow personal or professional relationships to influence their recommendations or decisions.
Integrity: Accountants must adhere to high ethical standards and act with integrity, even when faced with difficult or challenging situations.
Conflict of interest: Accountants must be aware of and avoid conflicts of interest and not engage in activities that could compromise their independence or objectivity.
What are some tips for being successful as an accountant?
To be successful as an accountant, you need a combination of technical knowledge, soft skills, and a strong work ethic. Some tips for success as an accountant include:
Stay up to date on industry trends and regulations: Accounting regulations and practices can change rapidly, so it’s important to stay informed and educated on the latest developments.
Build strong relationships with clients and stakeholders: Accountants must be able to communicate effectively with various stakeholders, including clients, colleagues, and regulatory authorities. Building strong relationships with these stakeholders can help an accountant succeed in their role.
Develop specialized expertise: Developing specialized expertise in a specific area of accounting, such as tax law or forensics, can help an accountant stand out from the competition and add value to their clients or business.
Be detail-oriented and accurate: Accuracy is critical in accounting, as small errors can have significant financial consequences. Accountants must be detail-oriented and work meticulously to ensure the accuracy of their work.
Maintain a high level of ethics and integrity: Accountants are responsible for managing sensitive financial information. Therefore, a high level of ethics and integrity is critical to building trust with clients and stakeholders.
Embrace technology and automation: Technology and automation are changing the accounting profession. Therefore, it is important for accountants to be comfortable with financial software and technology and to embrace new tools and practices.
What are some resources for learning more about the accounting profession?
For those interested in learning more about the accounting profession, there are many resources available, such as:
Professional organizations: There are several professional organizations for accountants, including the American Institute of Certified Public Accountants (AICPA) and the Institute of Management Accountants (IMA). These organizations provide members with resources, networking opportunities, and professional development opportunities.
Certification programs: Certification programs such as the Certified Public Accountant (CPA) and Certified Management Accountant (CMA) provide a structured path to becoming a certified public accountant and can help demonstrate expertise and credibility to employers.
Industry publications: Several publications, such as Accounting Today and the Journal of Accountancy, focus on the accounting profession. These publications provide news, insight, and analysis on trends and developments in the accounting industry.
Online courses and webinars: Many universities and organizations offer online courses and webinars on accounting. This is a convenient way to learn new skills or stay current on field developments.
Industry conferences: Attending industry conferences can be a valuable way to network with other industry professionals and learn about new developments and trends in accounting.
