What is Accounting? Everything You Need to Know About This Growing Field

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By DeVry University

September 9, 2020
7 min read

Are you interested in a career in accounting? With so many types of accounting in use today, you may find yourself wondering: what is accounting, and is it a viable area of focus for me?

This field of business is dynamic and growing, attracting students from a variety of backgrounds. In fact, according to the Bureau of Labor Statistics, accountant and auditor employment opportunities are projected to grow by four percent through 2029.

What is Accounting?

Accounting refers to the process of recording, reporting and analyzing the financial transactions made by businesses.  There are several types of accounting, including:

  • Financial accounting
  • Management accounting
  • Cost accounting
  • Tax accounting
  • Public accounting
  • Forensic accounting
  • Auditing
  • Government accounting

What Do Accountants Do?

An accountant's role can include everything from summarizing, analyzing and reporting financial transactions to computing taxes and improving overall financial operations. Some other accounting functions include:

  • Ensuring financial statements are compliant with regulatory and legal requirements
  • Preparing tax returns
  • Implementing accounting procedures at an organization
    Auditing accounting systems and books to ensure they are accurate and compliant.
  • Maintaining financial records
  • Making recommendations around cost reductions, revenue enhancements and profit margin increases

As you can see, accounting professionals perform a wide variety of tasks that are essential to an organization’s ability to operate effectively. However, for those looking to progress further in this field, the next step often involves becoming a Certified Public Accountant.

What is a CPA?

CPA stands for Certified Public Accountant, however, CPAs and accountants are not typically interchangeable. While all CPAs are accountants, not all accountants are CPAs. CPAs have prepared for and passed the Uniform CPA Examination®. Accountants without a CPA certification are often well-suited to staff accounting roles but may find that passing the CPA Exam could help them land higher level jobs and potentially better pay.

“A CPA, or Certified Public Accountant, is a trusted financial advisor who helps individuals, businesses, and other organizations plan and reach their financial goals,” according to the American Institute of Certified Public Accountants (AICPA). And the demand for CPAs can span far and wide. “Getting your CPA certification opens the kinds of doors that can fast-track you into influential jobs in every industry,” they add. Holding a CPA License also requires that individuals adhere to high ethical and professional standards.

What is the CPA Exam?

The AICPA’s Uniform CPA Examination, also referred to at the CPA Exam, consists of four sections focusing on key areas of accounting:

  • Business Environment and Concepts (BEC)
  • Financial Accounting and Reporting (FAR)
  • Regulation (REG)
  • Auditing and Attestation (AUD)

All four sections must be passed within an 18-month timeframe in order to earn your CPA credential. Other requirements also apply, such as meeting a minimum test score of 75 points on each section, meeting varying state requirements and completing sections within designated testing windows.

Who takes the CPA Exam?

Higher level business leaders, like controllers, CFOs and CEOs, often hold CPAs. No matter where you are in your career—whether you're just starting out or you're busy climbing the corporate ladder—a CPA certification can not only help you build your knowledge base, but it can also help you stand out from others in the workforce. Some companies even offer continuing education reimbursements that can help you pay for preparation courses and exam fees.

How do you approach CPA Exam prep?

For most students, passing the CPA Exam requires extensive preparation. Thankfully, there are many CPA Exam prep options available to you, including:

  • Individual CPA Exam prep courses
  • Supplemental preparation opportunities through bachelor’s and master’s degree programs
  • Certificate and degree programs specific to those pursing their CPA credential
  • Tutoring options

Many students also benefit from integrating CPA Exam prep into their regular undergraduate and graduate studies. DeVry University’s Keller Graduate School of Management, for example, offers a graduate certificate program focused on CPA Exam prep. The program integrates Becker’s CPA Exam Review, helping you get acquainted with the testing material, the questions you might be asked and the best ways to approach each individual section of the exam.

What Are Some Popular Careers in Accounting?

Accountants work in a variety of industries and are employed by companies of all sizes. Though tax accounting is a popular career choice, there are also unique accounting roles in the government, at Fortune 500 companies, for small businesses and at non-profits – just to name a few. Here are some of the more popular career paths:

Financial Accounting

Financial accountants organize and keep track of financial statements as well as maintain accounts payable and receivable. Financial accountants work extensively with technology to compute and classify financial records, ensuring that they're properly prepared for audits or questions from the organizational leaders.

Financial Services Industry Planning and Analysis

People in this field provide senior management with forecasts of the company's profits and losses (income statements) and operating performance for the upcoming quarter and year. They analyze risk and help their companies adjust according to the data they're given.

Federal and State Taxation

Tax laws are complicated on all levels, and accountants who work in compliance or tax management may find employment working with federal or state taxes in either organizational or consumer-facing roles.

Internal Auditing

Internal auditors are “impartial watchdogs” responsible for upholding the missions and visions of their organizations while simultaneously ensuring that funds are flowing where they need to be. Internal auditors might focus on:

  • Legal or regulatory compliance
  • Creating and maintaining proper financial procedures
  • Reviewing all documents that may be requested during an external audit by the U.S. Securities and Exchange Commission (SEC)
  • Risk management and asset protection
  • Adequacy and compliance with internal control procedures

Budget and Credit Analysis

This position requires you to create timely and accurate monthly financial analysis and reporting, as well as financial presentations that company leaders can use when showcasing performance to investors or board members.

Purchasing

No purchasing department can operate well if it's not on-budget. That's where accountants come into play. Purchasing departments require professionals who are skilled at planning and assessing budgets.

Claims

Managing claims is essential to maintaining balance, according to the accounting equation. A business is made up of assets, and the claims on those assets impact the status quo. Claims professionals are responsible for keeping their organizations’ financial health in check.

Financial Consulting

Because accountants are trained to hone in on problem-solving, analytical and research skills, they make for great consultants. Financial Consultants determine their clients’ financial positions and goals – whether those clients are individuals or organizations – by assessing debts, income, assets and expenses.

Accounting Technologies

Whatever your chosen career path, all modern accountants must be adaptable and technologically-savvy. Why? Not only is this industry growing, but it is also going digital. Some tasks may become more automated – making the analytical and strategic roles of accountants more prominent, according to the BLS. This means that the role of the accountant, for example, may change from entering accounting data and preparing financial reports to learning to leverage this data to help make better business decisions.

As an accounting professional, you should expect to work with accounting information systems and technology as your role may include installing, designing, operating and managing integrated automated accounting systems. Some technology-related tasks that accountants may undertake include:

  • Automating ledgers in accounting software to reduce the repetitive processes that can waste time and lead to human error.
  • Processing transaction cycles to ensure revenue, expenditures, conversion, financing and fixed assets are all accounted for.
  • Implementing application controls to ensure that all finances and transactions have a place on the balance sheet. This is particularly helpful if there is an audit and organizational spending behavior must be accounting for.
  • Setting up information security requirements. As an accountant, you might be the only person—or one of only a few—who has access to certain databases and software programs. In this case, it would be up to you to ensure only the correct people can access information on the programs your company uses. You might also be responsible for defining the terms by which people have access to certain fields, screens or information.
  • Integrating business information systems. Because you're responsible for the financial health of your organization, it may be up to you to set up business information systems in ways that ensure the safety and privacy of your company's confidential information.

Though technology has changed the business world, what hasn’t changed is the industry growth that has characterized this arena for many years. The role of accounting professionals is continuously evolving to meet the changing need of the companies they serve, which reinforces the ongoing need for these valuable, strategic employees.

Interested in learning more about our accounting programs at DeVry? Contact us.

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