Accounting as the Systematic Recording - Essay Example

Occupation report and Research Project Introduction Accounting is the systematic recording, reporting and analysis of financial transaction of a business (Investopedia 1). According to the Bureau of Labor statistics (20-26), accountants are often characterized as math geeks tabulating endless mind-numbing streams of numbers. Accounting and auditing has been confused to be the same in the recent past (Investopedia 1). However, they differ in that accounting engrosses classifying, gauging and disseminating economic information to various users while auditing involves conducting a technical examination of records and in this case, financial records. Therefore, accounting provides financial information to users of such information and auditing serves as a means to ensure such information is reliable and in line with the established rules and regulations (Clarke 18-22). Nevertheless, the above two concepts can interrelate at-times, regardless of their distinct difference. In my interview with a number of professionals in this career, I came to realize that, as much as accountants do need to have a solid skill in math, the job demands a combination of analysis, problem solving and detective work. Additionally, to be able to do the job perfectly, one must be able to communicate effectively and handle not only numbers but also people. The research methods used to draw this report were majorly interviews with professionals from this career and books and articles written about accounting career. Additionally, information available in the internet also helped a great deal. I managed to interview Carl Lewin, a management accountant in Price Waterhouse coopers, Mrs. Clarke Smith, a government accountant in the federal government, Mark Bartz, a management accountant with Samsung, Deborah Volkman, an accountant career adviser, Shauna Bryce, the chief finance officer with Waste Management Incorporation, and Dr. Bruce, internal auditor, Sony Music Company. The interaction was quiet appealing as I had the chance to know their say about the career and most interestingly, what they like most about their job and what exactly drew them to this neglected career path. Analysis Nature of the work An accountant helps in making important decisions in all businesses. Accountants prepare, analyze and validate financial reports that determine whether managers would make certain decisions or not (Career Explorer 1). This was supported by my interview with Shauna Bryce, who acknowledged that an accountant’s role is to prepare, analyze and validate financial information.” According to Alba et al. (25), there are four major fields in accounting, namely; public, management and government accounting and internal auditors. Management accountants work for companies as part of the team, providing the executives with the information needed in decision-making. This was supported by Lewin and Bartz who acknowledged that their role was to give information to assist in decision making. They are also called private or industrial accountants. Public accountants, the broadest of all, provide accounting, tax, auditing and consulting services for government and corporations (McLaney & Atrill 46-52). Much as public accountants are certified, they majorly specialize on few services such as tax preparation for businesses or auditing financial statements. They are employed primarily in financial auditing. Additionally, they give advice on how to manage cash resources in a more profitable way. Federal or local government employs government accountants and their dealings are subject to government regulations. Most work as internal revenue service agents and as budget administrators (Clarke 52). Internal auditors act as detectives as they examine the internal control of an organization averting imprecision, mishandling and fraud. “The immense growth of internal auditing in the industry cannot be overlooked”, Dr. Bruce explained, and “This is because of their ever increasing importance in any firm”. In addition to their “financial investigator” responsibility, internal auditors also assess operations of the organization, their efficacy, efficiency and compliance with corporate policies and procedures. Advancement of computer software that aids in accounting has greatly reduced the tedious manual work with figures and records in accounting. These software systems are being analyzed to ensure their reliability and integrity of data. Working conditions Generally, accountants work in an office-setting environment and have regular working hours. However, self-employed accountants may work as long as their business requires and may set up their offices at home. According to Career Explorer (1), tax accountants work for long hours during the tax period, which is from January all through to May. Accountants employed by large firms may travel extensively to work for clients or branches of their firm. In reference to Clarke (61), an accountant’s working hours may range from 40 hours a week to hours that are more vigorous. Employment As per McLaney and Atril (56-63), the total number of jobs held by accountants and auditors in the year 2012 were 1,275,400 compared to those held in 2008, which were, 962,000. This is a confirmation of what one of the professional I interviewed. With much faith and less doubt, Mr. Carl Lewin said that his future prediction about the career is that it is expanding. Deduced from the figures above, it is evident that the rate of change in accounting employment is quite high. According to the Bureau of Labor Statistics (69), in the year 2002, “there were 501,000 state licensed certified public accountants, public accountants, registered public accountants and accounting practitioners. Most accountants work in urban areas with only a small percentage, if any, working on part time basis”. Educational requirements and other qualifications Generally, for one to be an accountant, he/she needs to be at least a degree holder in Bachelor of Science in accounting. This was supported by Lewin, who acknowledges that the least qualification requirement of an accountant is an accounting degree. Deborah also supports this by noting that one requires a bachelor’s degree in accounting. However, employers prefer candidates with masters in accounting or master’s degree in business administration with a specialization in accounting. Alternatively, one can take the state CPA (certified public accountant) exam set by American Institute of Certified Public Accountants. In the interview, Deborah acknowledged that one requires taking CPA, which is a professional accounting course. The examination is rigorous and candidates are expected to pass at least two for partial credit. Most states require applicants of CPA to have some experience in public accounting. For instance, degree holders in accounting often need 2-years’ experience while those with masters in accounting will need a year experience in the field (Investopedia 1). Prior experience in accounting can be very helpful especially when searching for jobs. Therefore, it has become the culture of many colleges to take students for internship programs conducted by public accounting or business firms during summer or on part-time basis. Additionally, certification is very crucial in accounting. Anyone working as a certified public accountant must have a license issued by a state board of accounting. CPA is required to take continued education, continuing professional education (CPE) in order to renew their license (Jaffrey 145). The Institute of Management Accountants offers Certified Management Accountant to applicants who have completed a bachelor’s degree. The condition for such is harsh as applicants must have at least 2 years work experience in management accounting, pass a two-part assessment, concur to satisfy ongoing education requirements are abide by the standards of professional conduct. To add on that, the Institute of Internal Auditors offers certified Internal Auditor to graduates from accredited colleges and university whereby the individual must have a two-year work experience as an internal auditor and must have passed a four-part exam (Clarke 56). Beginning management accounting, often one starts as a ledger accountant, junior internal auditor or as trainees for technical accounting positions and may advance in position as they advance their education. In the interview with Lewin, he acknowledged that he started as a ledger accountant and then became an internal auditor and later became a management accountant. Many corporation executives have backgrounds in accounting, internal auditing and finance. This is to ensure there is no fraud and embezzlement of funds in the day-to-day operations of the firms. An individual with a desire to pursue accounting as a career should be able to concentrate for long hours, have the ability to analyze, compare and interpret figures and facts at large. In my interaction with Dr. Bruce, he mentioned that, “the major difference between good and great is the attention to detail. That attention to small detail is what distinguishes accounting from other careers.” Being keen is particularly indispensable if at all, one is considering being an accountant. Furthermore, one needs to have an aptitude in mathematics and be highly organized. Considering the high number of hours they work per week, a disorganized individual would be quite a disaster. Occupational outlook According to the Bureau of Labor Statistics (89), employment of accountants and auditors is expected to grow 13 percent from 2012 to 2022. This is the case due to the significant role they play in the management of all types of business. Most openings for accounting jobs would be majorly from retired or dead people in the in the profession. With the rapid growth of economy, accountants and auditors are needed in preparation and examining of financial records. Additionally, their financial advice would be required largely. Furthermore, continued globalization of businesses should result to a rise in demand for accounting expertise. Opportunities are expected to grow in favor of accountants with a bachelor’s degree in accounting. Certified Public Accountants should have a wider range in employment opportunities than any other accountant. However, a master degree should remain a key in employers’ preferences. Job opportunities for accountants without a college degree will occur majorly in small businesses, accounting firms and business training institutes (Alba et al. 79-82). Need for experience in order to secure employment is almost becoming mandatory thus, anybody willing to take this career path should consider internships programs or a part-time work while in college. During hard economic times, accountants are rarely laid off, as financial information must be developed regardless of the economy. Moreover, their advice is important in attempt to stabilize the economy. Below is a table showing employment projection for accountants and auditors, 2012-2022(Bureau of Labor Statistics). Occupational title Employment,2012 Projected employment ,2022 Percentage change Numeric change Accountants and auditors 1,275,400 1,442,200 13 166,700 Earnings According to Bureau of Labor Statistics (121-145), the annual average wage for accountants and auditors was $63,550 in May 2012. As per the research done by the National Association of Colleges and Employers, a bachelor degree holder would be paid $ 27,900 and inexperienced master’s degree holder would be paid $ 31,500. The bureau of Labor Statistics (167-172) shows the statistics of accountant’s earning in the in the year 2012 as follows: Accountants and auditors in finance and insurance industries had an average salary of $66,530 per annum. Those in manufacturing industries had an average of $65,300 per annum followed closely by those in management of companies and enterprises, which had an average salary of $ 64,670 per annum. Accountants and auditors who offered accounting, tax preparation, bookkeeping and payroll services were paid $63,910. Finally, those working for the government had an average salary of $ 61,490. Related occupation Accounting has a number of occupations that are related to it. The similarity is brought about by the similar job duties and concepts they both believe in. First is the bookkeeping accounting and auditing clerks. They produce financial records for organizations, “record financial transactions, update statements and check financial records for accuracy” (Bureau of Labor Statistics 178). Secondly is a budget analyst who helps public and private institutions to organize their finance by preparing budgets reports and institutional spending. Also related is the cost estimators who collect and analyze data in order to estimate the time, money, material and labor required to manufacture a product. To add on that financial analysts provide guidance to businesses on making investments decisions. Also related are financial managers who are responsible for the financial health of an organization. Management analysts propose ways to improve the organizations efficiency. Personal financial advisors give financial advice to people, helping in investments, taxes and insurance decisions. Post-secondary teachers instruct students in a wide variety of academic and vocational subjects. Finally, top executives devise strategies and policies to ensure that an organization meets its goal (Bureau of Labor Statistics 188). In my interview with Deborah, an accounting career advisor, she articulated that accounting is a general profession with numerous occupations such as book keeping, financial analysis, financial management and budget analysis. Institute of Management Accountants (IMA) Institute of Management Accountant (IMA) is a worldwide association for accountants and financial professional working in the business. IMA helps her members in expanding their professional skills, better management of their organization and enhancing their careers. IMA has been serving this profession since the year 1919. IMA represents more than 700,000 members who work in both private and public corporations with the exceptions of non-profit organizations (IMA 1). IMA has enabled her members to expand their career potential by giving them a platform to market themselves with a portfolio of customizable professional development services thus enhancing their knowledge in the process. Mrs. Clarke smith admitted that that IMA has been her best companion throughout her career and its one of the reasons why she loves what she does. “IMA permits me to partake my ideas with my fellow professionals, enables me renew my license with less strain and furthermore, it has enabled me to grow both at a personal and professional level”, she elucidated. A large number of accountants and financial professional invest in IMA membership as it offers a variety of benefits. As an active IMA member, certified management accountants enjoys career and earning potential as they at least earn one third more compared to their fellows who are nonmembers. In the professional publication, IMA members earn $ 350, 000 and above per year. Additionally IMA members are able to continue with education saving up to 25%or more. Members take advantage of discounts on IMA conferences and self-study continuing education courses that helps them keep in pace with the profession and earn NASBA(National Association States Board of Accountancy) approved CPE(Continuing Professional Education) credit. Furthermore, IMA members have full access to scholarships, grants and recognition programs. This includes students’ scholarships. Additionally, IMA career center is a great resource for members seeking accounting and financial positions. In addition, it helps employers looking for qualified candidates (IMA 1). IMA holds highly competence, confidentiality, integrity and credibility and failure of members to uphold such values leads to disciplinary actions. In my attempt to understand why such standards are considered highly among IMA members, Dr. Bruce described that those values are the basics of accountancy. To join IMA, the membership dues vary for various categories. Professional pay $235 per year, academic pay $125 per year, young professional pay $145 per year and students pay $ 39 per year. Compared to the unlimited advantages IMA members have, for sure it is a benefit being an IMA member. Summary Accounting involves making, upholding, examining, authenticating and reconciling multifaceted financial transactions and statements. Accountants are expected to maintain a high level of accuracy, have ability to concentrate for long hours and be detail oriented. Accounting and auditing have distinct different concepts but the two are interrelated. People with background in accounting can work as accounts trainees, researchers and administrators in school of business. Introduction of computer software that aids accounting has greatly reduced the tedious work of accountants. Accountants mostly work in offices. Those that are self-employed may have their office set up at home and may work for as long as their business requires, but generally, accountants works for 40 hours a week. According to accountants held 1,275,400 jobs in the year 2012. Deduced from the data, it is evident that accounting jobs opportunity is currently on the rise. A minimum entry to pursue the accounting career, an individual should have at least a bachelor’s degree in accounting. Employers however prefer candidates with a master degree in accounting or any related field, for instance, a degree in business administration with a specialization in accounting. In addition to that, experience is very important if one wants to secure a job in the field. A realization of that has led many colleges to take their students for internship programs in public accounting and other business firms during summer. Candidates are also encouraged to work part time to gain maximum experience in their occupation. Accounting has been projected to rise by 13% from 2012-2022. In reference to the Bureau of Labor Statistics (58-71), those retiring and the dead would make the jobs openings possible. With the globalization of businesses and rapid economic growth, accounting jobs are expected to increase rapidly. An average salary for accountants and auditors was $ 63,550 per annum. This was a tremendous increase compared to the average salary in the year 1993 that was $27,900 according to a survey conducted by National Association of Colleges and Employers. Accounting has a number of related occupations including bookkeeping accounting, cost estimators, financial analysts, financial managers, management analysts, personal financial advisors, post-secondary teachers and tax examiners and collectors and revenue agents. IMA (Institution of Management Accountant) is a worldwide association for accountants. The basic role of IMA is to expand the professional skills of her members and enhance their careers. For one to join IMA, the membership dues for professional is $235, academic $125, young professional $145 and students $ 39 all per year. However, the total value of membership is $650 or more per year thus showing the potential of earning that IMA member has over their fellows in the profession. All factors considered and the interview I had with the three in accounting occupation, much as the occupation is very demanding, it is worth the strain. Works Cited Alba, Jason, Manisha Bathija, and Matthew Thornton. Vault Career Guide to Accounting. New York: Vault Inc, 2005. Print. Bureau of Labor Statistics. Accountants and Auditors : Occupational Outlook Handbook: : U.S. Bureau of Labor Statistics. N.p., n.d. Web. 12 Mar. 2015. Career Explorer. "A Day in the Life of an Accountant." A Day in the Life of an Accountant | Career Explorer. N.p., n.d. Web. 12 Mar. 2015. . Clarke, Edward A. Accounting: an Introduction to Principles and Practice. South Melbourne: Cengage Learning Australia, 2011. Print. Investopedia. "A Look At Accounting Careers." A Look At Accounting Careers. N.p., 19 Mar. 2008. Web. 12 Mar. 2015. . IMA. "About IMA Overview." IMA - The Association of Accountants and Financial Professionals. N.p., Jan. 2015. Web. 13 Mar. 2015. . Jeffrey, Cynthia. Research on Professional Responsibility and Ethics in Accounting: Vol. 14. Bingley: Emerald, 2010. Print. McLaney, E J, and Peter Atrill. Accounting: An Introduction. New York: Financial Times/Prentice Hall, 2010. Print. Appendices: Summary of Interviews Appendix 1: Interview with Carl Lewin, a management accountant at Price Waterhouse Coopers I managed to meet Lewin at his office where I started by asking him about his job title and the industry he works in and how many years of experience he has had in accounting. Lewin responded by acknowledging that he is an accountant in the accountancy and auditing field and that he has been a certified accountant for 18 years. I also asked him about his role in the company and he asserted that his role in the company as a management accountant is to guarantee the company’s financial security through assisting the management with decision making. I also asked him how he started the profession and he acknowledged that he took an accounting degree from Liverpool University and took CPA exams after graduating, where he later started his job as an assistant accountant. I also asked him of the minimum qualifications for an accountant and his thoughts on the future growth of the profession. He responded by noting that an accountant requires an accounting degree and CPA’s and that the accounting profession is headed for growth and expansion in the future since there are more accounting graduates and more students are taking up accounting in colleges. I also asked him about how he later became a management accountant and why he chose management accounting. He asserted that he started as a edger accountant and later advanced to an internal auditor then a management accountant within the organization. Lewin also recognized that he also joined the Institute of Management Accountants to be certified as a management accountant. Appendix 2: Interview with Mrs. Clarke Smith I started off my interview with Mrs. Clarke by asking her about her accountant career path and how she got into accounting. She responded by noting that she studied actuarial science while in college and she realized that she was called to do accounting while in her senior year at the college. She then started working at an insurance company where she worked alongside auditors and she took accounting classes at a liberal arts school where she enjoyed the classes. She studied Bachelor of Science in Mathematics and mastered in accounting from a business school. She then joined the public accounting. I asked her about her role in the public sector as a government accountant and she responded by saying “my work entails doing tax work and auditing and sometimes I travel to different places to analyze the financial and tax issues of people”. I also asked her about the admittance requirements into accounting and she said “a Bachelor’s degree in accounting can get a person a job as an accountant in a firm in any state within United States.” I also asked her about the role of charters in the success of an accountant and she acknowledged that the IMA has been her best companion throughout her career and its one of the reasons why she loves what she does. She asserted “IMA permits me to share my ideas with my fellow professionals, enables me renew my license with less strain and furthermore, it has enabled me to grow both at a personal and professional level.” Appendix 3: Interview with Mark Bartz, a management accountant with Samsung My interview with Barts was almost similar to that of Lewin. I used similar questions to interview Barts. I also met Bartz inhis office where I started by asking him about his job title and the industry he works in and how many years of experience he has had in accounting. Bartz responded by acknowledging that he is a management accountant at Samsung and he has been a certified accountant for 21 years. I also asked him about his role in the company and, just like Lewin, he asserted that his role in the company as a management accountant is to guarantee the company’s financial security through assisting the management with decision making. I also asked him how he started the profession and he acknowledged that he took an accounting degree from Alabama University. He noted that he started his accounting career as a junior accountant in a small firm in Alabama. I also asked him of the minimum qualifications for an accountant and his thoughts on the future growth of the profession. He responded by noting that an accountant requires an accounting degree and CPA’s and that the accounting profession is headed for growth and expansion in the future since there are more accounting graduates and more students are taking up accounting in colleges. I also asked him about how he later became a management accountant and why he chose management accounting. He responded by saying that after he got his job as a junior accountant, he worked for two years and half and registered with the Institute of Management Accountants. He then acknowledged that he enrolled for CPA exams and was certified as a management accountant. Appendix 4: Interview with Deborah Volkman, an accountant career adviser I started the interview with Deborah by asking her about her job and what she does in her daily routine. She responded by asserting that her job entails advising young people on accounting as a career and advising people and firms on numerous issues regarding accounting in their firm such as tax burdens and how to make financial decisions that would not have adverse effects on the company or individual. Then asked her why she opted to be a career adviser and not practice accounting in a company and she responded that even though her passion was in accounting, she wanted to work with almost everyone did not want to major with working for just one individual or company. I also asked her about the entry requirements into accounting and she acknowledged that an accountant requires having a bachelor’s degree in accounting. However, she noted that an individual may also become an accountant by pursuing CPA or ACCA, which are professional accounting courses. I also asked Deborah about other professions related to accounting and she asserted “accounting is a major profession that has numerous occupations within it such as book keeping, budget analysis, management accounting, and financial analysis”. Appendix 5: Interview with Shauna Bryce, the chief finance officer with Waste Management Incorporation In my interview with Bryce, I started by asking her about the nature of the work of an accountant and she responded by saying that the role of an accountant is to prepare, analyze and validate financial information to aid in decision making within an organization. I also asked her about her role as a chief finance officer and she said that her responsibility is to ensure that the financial information presented is accurate and timely and deciding on how the company should invest and identifying areas that the company can focus in future. I also asked Bryce of the minimum requirements she would consider before hiring an accountant into her team and she said that an individual would require a bachelor’s degree in accounting or finance. However, she added “because of the high competition among candidates, I would also consider a candidate who has pursued a professional accounting course such as CPA or ACCA.” She also added that it is essential for the present-day accountant to get a master’s degree to give him or her upper hand in recruitments. Bryce also acknowledged that accounting is not just about acquiring an accounting degree but having analytical ability and the ability to concentrate for long hours. Appendix 6: Interview with Dr. Bruce, internal auditor, Sony Music Company I started off my interview with Dr. Bruce by asking him about his job description and the number of years he has worked as an internal auditor. Dr. Bruce first talked about his duty as an internal auditor with Sony Company by saying “my role involves offering an independent assurance that the company’s governance, risk management and internal control processes operate effectively.” He then talked about his career path by saying that he has worked as an internal auditor for almost 15 years. He also delved into how he started working as an accountant and later got a job as an internal auditor with Sony Corporation. I also asked him on what draws the line between accounting and any other profession such as engineering or architecture and he said “the major difference between good and great is the attention to detail. That attention to small detail is what distinguishes accounting from other careers.” I also asked him about the role of the Institute of Management Accountants and he acknowledged that the IMA plays a significant role in developing the professional skills of accountants and enhancing their career. Dr. Bruce acknowledged that the IMA has played a huge role in his career development over the years. He noted that he has renewed his practicing license numerous times through the IMA. Read More