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A Day in the Life of a Accountant/Auditor

Accountants keep track of payments, financial positions, and transfers of capital or income for individual or institutional clients. Some are responsible for examining the tax implications of those actions. Accountants must be comfortable with numbers, but must also spend a considerable amount of time reviewing other people’s work and, in particular, delivering bad news. As a “financial physician” (a term that cropped up more than once in our surveys), you’ll be the bearer of unpleasantness more often than blessings, and can expect to be greeted, at times, in a less-than-friendly fashion. People who enter accounting mention this stigma as the most unanticipated downside of the profession. “I didn’t know how many people just don’t pay attention to their own numbers,” wrote one frustrated internal auditor, “and how defensive people are when they’re wrong.” An average internal auditor spends a surprisingly small (35) percent of her time on paperwork, document review, and (usually computerized) accounting procedures, while the remainder is spent either on the phone, traveling to different locations, or meeting with executives, clients, representatives, and other divisional auditors. Tax accountants face a somewhat different lifestyle from auditors and general accountants. Personal income tax accountants, mostly employed at small firms (80 percent of all income tax firms employ five or fewer people) or self-employed, are responsible for tracking clients’ income, making any quarterly payments due to federal or state agencies, then managing the crush of activity preparing and submitting all required paperwork to the federal and state governments on April 15. Corporate tax accountants, however, are involved throughout the year in corporate decision-making, analyzing the tax effects of corporate investment policy, and advising other company managers on tax-planning issues. Corporate tax accountants face a seasonal surge in April similar to the one personal tax accountants face, although to a significantly lesser degree. The level of satisfaction in the profession is high. Since the bulk of what a professional accountant does is well-covered in school, those who don’t find accounting enjoyable in school tend not to enter the professional accounting world.

Paying Your Dues

Most in the industry enjoy the straightforward path to becoming an accountant. Nearly all firms require at least a bachelor’s degree in accounting, finance, or a related discipline. Many employers look favorably on students with significant computer proficiency or work experience in number-intensive jobs, and some job candidates enhance their profiles by earning a master’s degree in business, accounting, or finance. The most common certification accountants are asked to complete soon after hire is the state-licensed Certified Public Accountant (CPA) exam. This rigorous four-part exam is rapidly replacing the Public Accountant (PA), Registered Public Accountant (RPA), and the Accounting Practitioner’s (AP) exams as the working degree of choice. Different states have different licensing requirements, so write to the National Association of State Boards of Accountancy to find out the requirements for your state. Many boards are currently considering requiring an additional thirty hours of postgraduate accounting.

Present and Future

Financial records certifying transactions and recording inventory levels have been found at the sites of ancient Greek and Roman towns, but accounting didn’t become a “science” until 1494 with the publication of a book by mathematician Luca Pacioli describing the principles of accounting, including the double-entry bookkeeping system still in use today. In the United States, accounting grew significantly as a profession with the passage of federal legislation mandating income tax in 1913 and the excess profits tax in 1917. The future of accounting looks great for some types of accountants while potentially bleak for others. Corporate tax advising, tax planning, internal auditing, and small business consulting are expected to grow at a steady pace. Internal auditing, in particular, should grow in popularity as small businesses learn the value of managing their capital soundly. Personal tax accounting, however, could change significantly if any of the “flat tax” proposals are voted into law (an unlikely but possible event). When the tax laws change, accounting professionals must reeducate themselves as they did when the 1986 tax law reforms were passed.

Quality of Life

PRESENT AND FUTURE

Most entry-level accountants and auditors are highly supervised, basically apprenticed to more experienced professionals in the field as cost accounts or junior internal auditors. During the first two years, many people study for their CPA exam, which only 25 percent of test-takers pass at any given administration. Nearly half of the 15 percent who leave the profession in the first two years do so to gain further schooling in a related field.

FIVE YEARS OUT

Mobility becomes the most significant feature of the profession after five years. Professionals begin to specialize in private or public accounting, and reach levels of greater responsibility, such as budget director or accounting manager. Some start their own firms; others become internal auditors in client firms. Accountants also enter related fields such as banking, financial analysis, and asset management. The 10 to 20 percent who leave the field are dissatisfied by the unpredictability of hours and the unflattering public perception of the industry. For those who remain, both hours and salary increase.

TEN YEARS OUT

Private practitioners have established their own firms or, if unsuccessful, re-entered the corporate environment. Those who followed a corporate track all along are now not only involved in tax-planning issues and accounting procedures, but business decisions and actual corporate strategy. Salary increases significantly at this point for the independent practitioner who has built a considerable client base. A variety of management positions unrelated to accounting, previously unavailable, open up, such as strategic planning, operations development, and budget oversight. Some accountants become independent consultants and begin to work shorter hours, deciding to place more emphasis on family life and free time. A significant few enter government service and/or academia.