The Analysis of the Financial Accountability - Essay Example

ACCOUNTING AND FINANCE CAREER . Financial accounting is the field of accounting that deals with the summary, analysis and reporting of financial transactions in a business (Ryan, 2004, 43-45). They prepare the business final accounts which are for use by stockholders, suppliers, commercial banks and non bank financial institutions, employees and government agencies especially the tax department., Potential investors, shareholders and any other interested party. Finance and accounting professionals determine how, when, and why a business should invest its resources (Ryan, 2004, 89). They analyze results of strategic decisions and measure the value of the results, strategize to maximize profitability, sustainability and flexibility, ensure that the business continues to grow, return value to owners and attract more resources, and make the decisions that are reflected in the financial statements, they are key players in the world of business (Robinson, 2012, 12). They record, analyze, summarize and report financial information for use by the management and investors, they also play an integral role in the firm’s daily management and decision making process, they execute strategic goals, drive growth and manage the firm’s risk by implementing financial controls over its business activities (Alba, et. al, 2005, 103). Financial accountability is important in maintaining a healthy business. They also educate their employers on financial information accordingly and advise them. Generally they do not have to work with other employees as they report to the management directly. The average salary of a financial accountant is $50820 per year (Robinson, 2012, 97). Tasks carried out by a financial accountant include summarizing and preparing financial records and statements to report externally, maintaining records of assets, liabilities, capital (shareholders’ equity), tax demands and financial transactions in the organization. They utilize accounting principles to ensure compliance with regulatory reporting requirements. To become an accountant one requires advanced education and formal certification to get qualified for senior accounting jobs. On the most basic level, accountants keep and inspect financial accounts for companies, government institutions and individuals. Some accountants are self employed while others work for large firms. Most accountants work full time though some work part time. Those who work part time are usually busier during end of financial year and during tax season (Ryan, 2004, 45). Most accounting professionals have at least a bachelor’s degree which usually takes four years to complete. However there are accounting associate degrees. With more education and experience accountants can become certified. The certified accountants can do more tasks than other accountants as they can sign the financial documents submitted to the Securities and Exchange Commission. They can also easily advance their careers to management positions and can also easily specialize in one area of interest. Certified accountants can also perform audits, review statements and represent clients before IRS. On the other hand it takes considerably more time and resources to become a certified accountant. To become a Certified Public Accountant a minimum of a bachelor’s degree is required academically. Some states even require advanced coursework besides a bachelor’s degree. Students who later become accountants tend to excel in math and have excellent analytical skills. They also need good interpersonal skills since they have to deal with many categories of clients. Accountants also need strong organizational skills and should be detail oriented. Accounting records must be accurate as businesses need them to make sound financial decisions. In 2012 the industry that employed most accountants was accounting, tax preparation, book keeping and payroll services industry with 25% (Robinson, 2012, 38). Accounting is helpful even at a personal level in budgeting, finding out how much one has spent in a given period of time. Interpersonal skills are important since especially at the entry level most accountants work as auditors and generally auditors are loathed by almost everyone in the organization because of the nature of what they do. Therefore people skills are important (Alba, et. al, 2005, 103). Financial managers help organizations, both public and private, to develop and manage financial objectives. It encompasses many duties and job titles including credit managers, risk managers and treasurers. To become a financial manager requires at least a bachelor’s degree in academic qualification and experience. Certification opens more career opportunities. Vocational school diploma program usually offer accounting and not financial accounting. This offers one skills to prepare financial statements and to perform the most common accounting tasks using computer applications for accounting. These programs are generally for duration of one year. Earning only a diploma attracts low level jobs like bookkeeping and becoming an auditor clerk (Ryan, 2004, 90-96). A good accounting coverage not only provides comprehensive coverage of generally accepted accounting principles (GAAP) to the students but also expose them to International Financial Reporting Standards (IFRS) (Robinson, 2012, 56). GAAP is the dominant practice applied in the United States but the constantly increasing globalization requires preparedness with international standards as well. Accounting should not only show how an accounting event affects the accounting period in which it has been prepared but it also affects many more future accounting periods. While financial accounting prepares accounting information for use by people outside the organization and not involved in the daily running of the organization management accounting provides accounting information to help managers make decisions to manage the business. According to the International Financial Reporting Standards (IFRS), the objective of financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity’(Robinson, 2012, 89). According to the European Accounting Association, capital maintenance is a competing objective of financial reporting (97). The five components of financial statements include the statement of cash flow which shows cash inflow and outflow out of the business, Statement of comprehensive income also referred to as a profit and loss account which helps in realizing the profit made by the business,, Balance sheet which outlines the assets and liabilities of the business, and statement of changes in equity which deals with capital (Robinson, 2012, 117). One may also become a financial planner. This is a job title referring to financial analysts, certified financial advisor, financial consultant or financial manager This is a person who provides expertise and advice to clients regarding aspects of financial planning such as personal savings, family insurance cover, investments, wealth management planning ones estate tax advice, retirement etc. They use their skills to analyze and interpret their clients’ short term and long term goals so as they can help them make sound investment and risk management decisions. They gather the client’s financial position information, goals, and their risk taking potential before preparing a comprehensive plan to meet his/ her needs. They also meet their clients annually to monitor and review how the formulated plans are working out and to update them on new investment opportunities. Most financial planners are employed by insurance companies, as stock brokers, commercial banks and non bank financial institutions. Some however are private practitioners and operate investment advisory businesses. To become a financial planner one would undertake undergraduate studies in accounting and finance, economics or mathematics after which one can undertake a postgraduate Diploma in Financial Planning or advanced diploma in financial planning. They are also required to apply for registration with the Financial Services Board (FSB). To become an accountant one must be good in math. However, it is not only a love for numbers that makes great accountants. Critical thinking and technical data analysis and synthesis skills are also required. An interest in law and a consistent desire to always do the right thing will also be necessary. There are several ways to break into the field of accountancy, but every path requires some post secondary education. An accounting certificate or an associate degree in accounting is a good point to start as it prepares one for the entry level jobs in accounting. Accounting students are able to learn the basic fundamentals of accounting technology that is of great importance as the accounting software increases in their complexity. Accounting software continue getting more complex. One can work as a relationship manager or broker also referred to as the accounts representative or financial adviser. This is for those who love meeting people and nurturing strong working relationships. Such positions serve as the lifeblood of the financial services industry and their job determines the success and continuity of the organization. Their main objective is to attract new customers and investors to the company while nurturing the company’s relationship with the already existing parties. They help in maintaining a company’s good relations and maintaining customers’ trust in their product, done through marketing, customer care services and technical support. They also do an analysis of market trends and gauge the company’s customer service against the prevailing market trends. Skills most necessary in these roles are strong interpersonal skills and the ability to communicate complex financial information in a clear and simple way. The ability to be a team player and still exercising leadership is also important. A person with accounting knowledge can work as claims adjuster also referred to as a claims analyst. They are tasked with ensuring that the client’s claims match the company’s eligibility standards by evaluating the claims made for accuracy and by collecting anymore relevant materials required. They may also conduct investigations regarding the claims. This is before sales agents, who are charged with finding and closing deals, actually closes the deals. While they are generally associated with insurance companies, banks and big retail shops also employ them. They also prepare the necessary documentation for approval or denial of deals Other skills required are being detail oriented ability to multi task, good negotiation skills, and an extensive knowledge of the field and the industry. Accounting profession enables an individual to work as an investment banking analyst which involves producing all the financial information that companies require to make investment decisions. This is by analyzing financial statements, constructing financial models, preparing financial reports on potential investment sectors, researching on the market trends, making presentations for the management as well as organizing internal meetings. Those working for big firms will normally specialize in a given sector, product or geographical area while those in small firms may research on all potential sectors, products or area. They work closely with the top most managers of the company. This is why an individual who ventures in this should be self motivated and diligent. Proficiency in spreadsheets is also extremely important. One can also work as a financial project specialist. Large firms with many ongoing projects cannot succeed unless they divide themselves into teams. The key members of these teams are project specialists who provide support the management by delivering initiatives within the established budgets and time. They disseminate relevant information to affected persons as well as monitoring the progress of the project especially financially. Accountants and auditors held about 1.3 million jobs in 2012 (Gulko, 2010, 96). Most of them work in offices though some work from home. The work can be very stressful. Though most of the times they do their work alone sometimes they work as a team. They may also be required to work for long hours than other professions due to the strict deadlines associated to the job as well as the seasonality of the job. A job in financial services is not only challenging and dynamic but it places you at the heart of managing money. Therefore a student wishing to join this great profession must be prepared to deal with these challenges as they enjoy the benefits thereof. References Alba, J., Bathija, M., Thornton, M., & Vault (Firm). (2005). Vault career guide to accounting. New York, NY: Vault Inc Gulko, C. S. (2010). Accounting, business, and finance. New York, NY: Ferguson Robinson, T. R. (2012). International financial statement analysis. Hoboken, N.J: John Wiley & Sons. Ryan, B. (2004). Finance and accounting for business. London: Thomson Learning. Read More