Guide to Becoming an Accountant
Accounting jobs exist in many different companies across a wide range of industries. If you’re considering becoming an accountant, then you’ll want to know what types of jobs are available, how much they pay, and what kinds of degrees and certifications can prepare you for a job in accounting.
What Does an Accountant Do?
Accountants are responsible for counting money, whether it is a company’s, the government’s or another person’s. They track the money spent and earned by an individual or entity, ensure that the entity’s financial records match financial reality and prepare tax documents to help individuals and entities to pay their taxes.
There are many different kinds of accounting jobs, each set in a unique domain and dealing with its own financial processes. According to the U.S. Bureau of Labor Statistics (BLS), accountants earn a median annual salary of about $73,000, hold nearly 1.4 million jobs in the U.S. and have a bachelor’s degree in accounting.
There are many different careers available to those interested in becoming an accountant, each specializing in a particular type of accounting. However, no matter what specialization an accountant chooses, they may be able to work in others, either concurrent with or following their present position.
The requirements to become an accountant can vary depending on which specialization you choose to pursue, but generally entail at least a bachelor’s degree. Additional education, such as a Master of Accountancy degree, can open up new specialization career paths while allowing a person to dive deeper into or build their foundation in whichever field of accounting they are the most passionate about. With further education, having a diverse career path in accounting is possible.
Public accountants practice accounting either on their own or as part of a firm. They take on outside clients, usually either individuals or businesses, and provide their fiscal expertise and services for a fee. When a person hires an accountant to help them do their personal taxes, or when a business seeks consulting from an accountant, it is usually public accounting.
There are many different subdomains within public accounting. However, in general, a Bachelor of Accountancy degree is all that you need to get started as a public accountant. Additional certification is required to become a Certified Public Accountant (CPA). A master’s degree may be required to advance as a public accountant.
Salaries for public accountants vary a lot depending on level of education, experience in the field and subdomain of public accounting. According to PayScale, the base salary range for CPAs in August 2021 was between $49,000 and $116,000.
Duties of public accountants vary depending on the subdomain of accounting they work in. A public accountant should expect to be familiar with preparing tax documents, auditing financial documents to ensure that they are accurate and lawful, and using accounting software to maintain and analyze financial data.
Government accountants work for the government, whether at the federal, state or local level. In this function, they have many responsibilities. However, government accountants are often expected to track spending for government programs, help agencies to navigate their budgets, evaluate tax forms submitted by businesses or individuals, and perform audits on businesses and individuals.
Government accountants can work for a number of different agencies and government departments, including the Department of the Treasury, IRS and even FBI.
A government accountant should have at least a bachelor’s or master’s degree in accounting. Certifications such as CPA, Certified Fraud Examiner (CFE), Certified Government Auditing Professional (CGAP) or Certified Government Financial Manager (CGFM) are also important for government accountants.
Government accountants tend to make less than accountants in other sectors, earning an average annual salary of around $53,500 as of August 2021, according to PayScale. However, many government accountants derive a sense of satisfaction from public service.
A government accountant should be very familiar with the auditing process, the relevant tax laws in their area of work, and preparing budgets for government agencies and programs. Depending on their line of work, a government accountant may even be called to testify in court as an expert witness.
Also known as corporate or industrial accountants, people in management accounting work primarily for a single company. While public accountants may get their workload from a wide variety of clients, management accountants are hired to manage, record and analyze one company’s finances.
Corporate accountants should have at least a bachelor’s degree in accounting, although a master’s may open up additional opportunities for advancement. Management accountants may be required by their companies to be a CPA, Certified Internal Auditor (CIA) or Certified Management Accountant (CMA).
Management accountants typically made between $45,000 and $97,000 a year as of August 2021, according to PayScale. Pay level improves with experience, education, additional certifications and responsibilities.
Management accountants are responsible for the accounting duties at a single large company. They may record all the company’s financial data, checking it for any errors or inconsistencies; make sure that the company is compliant with the relevant corporate laws; and help the company to prepare its taxes. Corporate accountants may also be responsible for the company’s payroll, ensuring that employees are paid on time and correctly.
Internal audits serve a number of functions. For publicly traded companies, audits are often required by the SEC as part of that company’s financial disclosure. However, auditing is also important for companies to run efficiently, as the auditor can report on financial waste or loss in the company and identify how departments in the company are performing. Sometimes, auditors may even discover fraud or other forms of criminal mismanagement in a company’s books.
An internal auditor should have at least a bachelor’s or master’s degree in accounting. Having CIA certification is also a requirement for accountants who are interested specifically in auditing.
Internal auditors earned a salary of anywhere between $46,000 and $81,000 per year as of August 2021, according to PayScale. Pay can improve depending on experience in auditing, as well as the kinds of clients that are audited.
Internal auditing involves examining an organization’s financial records, comparing them with each other and other relevant information, and rooting out inefficiencies and criminal activity. Internal auditors should be prepared to evaluate a company’s best practices and provide their honest assessment at the end of the audit.
Whether you have an accounting degree focused on the fundamentals of working directly with numbers and applied principles, or an accounting practitioner degree to help you serve more advisory and analytical roles, you may need to pursue certifications after graduation to qualify for many accounting jobs.
Certifications are a necessity before many companies or clients will hire you, but getting additional certifications can also open up new opportunities for pay raises, promotions or new jobs. The following are a few of the more common accounting certifications that can help you land a job in this competitive field.
Certified Public Accountant (CPA)
The most common of all accounting certifications is Certified Public Accountant. It is required to practice public accounting, although other accounting jobs may prefer candidates who have a CPA license, just for the experience that it affords. Requirements for taking the CPA exam vary from state to state, but include a bachelor’s degree.
The American Institute of CPAs warns that, although an advanced degree is not required, some of the skills required for the CPA exam are only developed at the graduate level. Many states require 150 semester hours of education to attain a CPA license. Additionally, some states require at least two years of public accounting experience before allowing a person to take the CPA exam. Counting fees for application, registration, the exam for all four required sections, the ethics exam and licensing, becoming a CPA can cost about $1,500. It will likely cost more if you choose to take a review course, which can improve your chances of passing.
Certified Management Accountant (CMA)
Becoming a Certified Management Accountant is critical for those who want to work as corporate or management accountants. The requirements for taking the CMA exam, which has two parts, are as follows:
- Active IMA membership
- A bachelor’s degree or related professional certification
- At least two years of continuous professional experience in management accounting or financial management
For professionals, the cost of the CMA exam is about $1,080 — $250 for the entrance fee and a $415 exam fee for each part of the exam. The total comes down to $810 for students who want to take the exam.
Becoming a CMA can prepare you for a position in corporate management, such as chief operating officer.
Certified Financial Analyst (CFA)
A Certified Financial Analyst is prepared to work in a career centered around finance. This certification is ideal for accountants who want to work with investments or other financial markets. The CFA exam is administered by the CFA Institute. There is a one-time program enrollment fee of $450 to take the test. After that, there is a registration fee of either $700 or $1,000 depending on whether you register early or during the standard period.
Certified Internal Auditor (CIA)
The Certified Internal Auditor (CIA) certification is the global standard for internal auditors. It’s crucial for anyone who wants to work as an internal auditor, no matter the clients that they take on. An associate degree or higher is required before taking the CIA exam. Applicants must also provide a character reference and meet work experience requirements, which vary depending on level of education achieved.
Candidates with an associate degree must have 60 months of internal auditing experience, while candidates with a bachelor’s or master’s degree are required to have only 24 or 12 months, respectively. For Institute of Internal Auditors members, the exam has a $115 application fee, along with a $280 fee for the first part of the exam and fees of $230 each for the next two parts. Non-members pay more, and students receive an additional discount.
Enrolled Agent (EA) Certification
Unlike other accounting certifications, which are managed by private accounting organizations or institutes, the IRS handles the Enrolled Agent (EA) certification. EAs need to prove their expertise when it comes to the U.S. tax code as it applies to individuals and businesses.
The EA exam comes in three parts, which cost $181.94 each. Upon successful completion of the test, there is an additional $67 fee paid to the IRS to become a certified EA. IRS employees are exempt from taking the EA exam, given their work experience with U.S. tax code
If you’re interested in pursuing a degree in accounting, there are many scholarships available to help you pay for school.
- AICPA John L. Carey Scholarship Award — This scholarship provides $5,000 for one year to students who have an undergraduate degree outside of business but are interested in pursuing a graduate degree in accounting with the goal of becoming a CPA.
- AICPA Scholarship for Minority Accounting Students — This scholarship provides $5,000 per academic year to accounting students who belong to minorities that are underrepresented in the field of accounting.
- AWSCPA Scholarship Award — This scholarship provides $5,000 for one year to women who demonstrate exceptional academic performance in their accounting major.
- NSA Scholarship Foundation — The National Society of Accountants awards between $500 and $2,200 to undergraduate accounting students who demonstrate outstanding academic achievement, are leaders in their communities and have a desire to pursue a career in accounting.
- GFOA Scholarships — The Government Finance Officers Association offers a range of scholarships that award between $5,000 and $20,000 to students with strong academic records, work experience in accounting and a desire to work in government finance.
- CMA Scholarship Program — Students who demonstrate exceptional academic performance may be nominated to this program by their professors. If accepted, they will be able to take the CMA exam at no cost while still in school.
- Ritchie-Jennings Memorial Scholarship — This scholarship awards between $1,000 and $10,000 to outstanding students who intend to pursue careers in fraud examination. Recipients also receive a one-year membership to the Association of Certified Fraud Examiners.
- NABA National Scholarship Program —The National Association of Black Accountants offers a variety of scholarships with award amounts between $1,500 and $5,000 to Black accounting students who meet the program’s academic standards.
- Accounting and Financial Women’s Alliance Scholarships — The AFWA offers a number of scholarships intended to help more women break into the field of accounting.
Prepare for a Career in Accounting
If you’re interested in pursuing an accounting career, there are many different paths you can follow depending on your interest. Regardless of which specialization you choose to pursue, earning a college degree is an essential first step on the path to becoming an accountant.