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

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

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:

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.

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

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.

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

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 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.

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.

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 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:

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.

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.

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.

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.

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: