A Career in Governmental Accounting

Accountants that work for the government are not limited to one career choice. You can work at the federal, state, or local level, and all levels provide you with different career paths. At the federal level, you can investigate crime, manage public funds, and audit governmental agencies. At the state and local levels you can inspect fraud, handle local revenues, and give recommendations to fix financial issues. There will always be a need for accountants in the governmental world. The field is constantly looking for educated, critical thinkers who work well with numbers.

One recommendation in attaining a job as a governmental accountant is to become a Certified Public Accountant (CPA) beforehand. Being a CPA is an opening to an accounting career in government and is often times a requirement. There are numerous governmental agencies you can work for as an accountant. Some agencies you can work for at the federal level are: the Internal Revenue Service (IRS), Governmental Accountability Office (GAO), and Departments of Defense, Transportation, Treasury, and Agriculture. When working with the IRS, among various other job opportunities, you could become an internal revenue agent, a tax specialist, or a tax compliance officer. At the state level, an accountant could work with the comptroller’s office, finance departments, and even state universities. If you wanted to be an accountant at the local level, you could work with local government-owned hospitals, school districts, and special districts.

Governmental accountant’s salaries vary based on the location of the job, education level of the employee, and any certifications earned. According to educationcareerarticles.com, the highest paid governmental accountants are going to be in the New York Metropolitan area, where they earn an average of $89,000 a year. Those who work within the federal executive branch receive higher compensation than those at the state and local level. While a tax resolution representative may have a median salary of $30,000, a supervisory auditor can earn up to $92,000 a year.

Written By: Kelly Bingham

A Career in Industry Accounting

When deciding on a career in accounting, most people automatically think that they must go to a public accounting firm upon graduating from college.  However, that is not the case.  Another option most people do not think about, is taking a position in industry accounting.  Industry accounting is different from public accounting in several ways.  For example, when working in industry, you only work for one company.  You can be in different accounting groups within that company and take on different roles, but it is all still the same company.  You may wonder what industries need accountants.  The answer to that is simple: all of them.  Every industry, every business needs an accountant.  That means you could work for an oil and gas company, you could work for a technology company, you could work in the medical field, or you could work for a security company.  The possibilities are almost endless!

When working in industry, you typically start off as an associate accountant, or the equivalent.  The names change for different companies.  An associate accountant has two years of experience or less.  After two or three years, you are eligible for promotion to accountant.  Every two to three years following, you can potentially be promoted through the ranks of accountant, to senior accountant, to lead accountant, to supervisor, and then to manager.  Each group or team in the accounting department will have a supervisor that leads a team of lead accountants, senior accountants, accountants, and associate accountants.  Managers may lead one or two teams.  Each team has a different responsibility, such as external reporting, benefits, risk management, and internal reporting.  In most companies, you can move through departments by promotion, or you can move across teams and have new responsibilities within a new group.  Typically, in industry, all employees work eight hours a day.  Occasionally, you may work extra hours, or you may have to go to work on the weekends.  It depends on your deadlines; however, that does not happen often.

Sometimes, you may be given the chance to be promoted past the position of manager.  You could be a comptroller, a chief accounting officer, a chief financial officer, or a chief executive officer.  You could even be the president of the company you are working for.  These jobs require extensive knowledge of the industry you work in, and lots of hard work and determination.

The starting salary for an entry-level, industry accountant is competitive with that of an entry-level public accountant, around $55,000 a year.  With each promotion, salary increases depending on how the industry is doing.  If you are chosen to be a chief financial officer or a chief executive officer, your potential earnings will skyrocket.  Most executive officers of publicly-traded companies make millions of dollars a year.

Industry accounting can give you experience across the many different facets of accounting and can be a lucrative career choice, while still allowing you to have a healthy work-life balance.  While there is no busy season, there are several busy times throughout the year, depending on the deadlines your group has set.  With competitive salaries, industry accounting is a good option for those who do not want to work at a public accounting firm.

Written by Kourtney McDonald

A Career in Public Accounting

When accounting students are faced with the question, “Do you want to do Public or Industry?” many have absolutely no clue. Often the majority of students end up going towards public accounting, mainly due to the number of students they hire right out of college with no experience. Some graduates choose this direction because of how fast paced it is, and the immense amount of information you learn in a short period of time. Some even go into public accounting without a full understanding of what it is simply because they see it as a steady, secure pay check after graduation. Accounting Coach considers public accounting as a firm of accountants that provide services to businesses, individuals, nonprofits, and governments. Public accounting firms mainly focus on tax and audit services. Audit services include preparation, review, and auditing of financial statements; whereas, tax services includes preparation of income tax returns and estate and tax planning. The services provided by firms differ depending on their size and expertise. Firms that are well rehearsed in their tax and audit services also offer other things such as consulting services, advice on accounting systems, mergers and acquisitions, along with many other topics.

After accounting students have decided to pursue public accounting, it is then important for them to consider what size firm they would like to work for. Public accounting firms are ranked by their size, with one being the largest and so on. A firm’s size can depend upon the number of locations, the number of people they employ, the number of clients, and most of all the amount of revenue they earn. The four largest size firms are known in the accounting world as “The Big Four.”  Currently the Big Four are PricewaterhouseCoopers, Deloitte, KPMG, and Ernst & Young.  Most accounting firms perform the same services, regardless of their size. There are some major differences, however, in working for a Big Four firm versus a midsize or small firm. One of the major differences is the amount of hours you work. In public accounting, there is a time period known as busy season. For most audit and tax accountants, busy season begins in January after clients have closed their books at their year-end. For tax accountants, busy season usually ends April 15^th, the day taxes are due to the IRS. Auditors usually have to meet a March deadline, although sometimes their busy season can extend into April and May. Since accounting firms have to perform majority of their work within a few short months, it involves employees putting in many long work days. If you work for a Big Four firm, you could easily be putting in 80 to 90 plus hours a week. Midsize firm employees can be expected to work anywhere from 50 to 70 hours per week and small size firms will most likely not put in much more than 50 hours per week. These estimates are for first year staff and associates, and increase as you move up. Even though larger firms put in many more hours, starting pay for first year staff is not significantly different from smaller firms, although that changes the further you move up as well. Most companies keep pay competitive in order to compete with other firms. The real advantages are in the benefits offered. Aside from the typical insurance benefits, firms offer things like sign on bonuses, overtime pay, paid time off, and CPA review materials. The larger firms will be able to offer larger bonuses and more paid time off than a smaller firm.  Probably one of the best benefits a firm can offer a first year employee is to pay for CPA review materials. Most students will choose this route due to how pricey review courses can be, plus majority of firms will not promote anyone who is not a CPA. An added benefit of working for a larger firm is they will offer a bonus once you pass the CPA exam, in addition to paying for all of your review courses. In the end, when making the decision to go big or small, it all depends on how much you value your time.

While you are working at a public accounting firm, most will try to allow you to work on clients from different industries. The industries firms provide services for also vary depending on size and expertise. Most public accounting firms provide services for industries such as health care, financial services, real estate, manufacturing, energy, not-for-profit, government, as well as several others. Firms want you to have some time to work on as many industries as you can because they want you to gain experience from each. Once you have a better idea how each industry works, then you are easily able to tell which industry you like best. In most cases, the industry that best fits you is the one you choose to specialize in. Once you have selected a niche, then you will mainly work on clients from that industry in order to gain more experience. Unfortunately, due to the strenuous workload of public accounting, they have a fairly high turnover rate. Once employees feel they have gained enough experience from public accounting, they will begin to look for a job elsewhere with a less stressful work life, usually within their niche industry. Since many companies want to hire employees with public accounting experience, often employees end up working for a client at their firm. Overall, public accounting has many advantages and disadvantages, but is a great head start to a career.

-Alisha Windham

A Career in Auditing

Auditing is a challenging but a rewarding career choice. It is the auditor’s job to make sure that a company is operating ethically. Every year, a public company is required to file a document called the 10k where an audit firm has to express their opinions about how that company is operating. Time is usually the most important asset an auditor can have. That being said, their busiest months are from January through March of every year. Those three months are called “busy season” and the peak of “busy season” is called filling week. Filing week defines an auditor’s career; it is usually after that time period where performance evaluations are made because it is a test of an auditor’s work ethic.

Someone starting their career in auditing typically starts off as an associate or as an intern. Promotions in auditing are based on experience, the number of years worked in the firm, and through performance evaluations. During the third year, the average associate will be promoted to senior. During the sixth year, the average senior will then become a manager. During the ninth year, an average manager will then be promoted to senior manager. The amount of time it takes for someone to be promoted to the next level ultimately is dependent upon that person’s performance. A partner promotion is a little more complicated. The firm typically promotes senior managers to partners if the business is growing and the economy is stable. A series of paperwork and interviews are conducted in order for a senior manager to be promoted to partner. A senior manager may also choose to be a director, who is someone that leads an engagement team without owning units or shares of the firm.

When working for a large firm, the turnover ratios are typically high. Most people leave after they are promoted to senior, or after they are promoted to manager. Seniors are normally offered senior accounting positions at other companies. Managers are typically offered to step up as a comptroller of an organization or even as a CFO of a small company. According to the Big 4 Playbook, senior managers are sometimes offered CFO positions of Fortune 500 companies.

Salaries of a typical auditor are based on performance from the previous busy season. Associates typically earn around $55,000 per year. The following year, salary will increase based on performance reviews. For example, a very good rating will result in a 10% increase in salary. On top of the increase in salary, a bonus is given to those that are promoted to senior, manager, and senior manager. The amount of the bonus will vary depending on the size of the firm. A partner’s salary is performance based. Those with high-paying clients make more money compared to a partner who is assigned a small client.

Auditors are usually presented with career opportunities along the way, but they have to be willing to make sacrifices. Auditors are required to work long hours during busy season, often working six days a week. Someone entering a career in auditing has to consider this before making the commitment.

-Franz Limeta

Tax Accounting

Majority of accounting graduates receive the benefit of numerous job prospects, and after achieving the prestigious title of CPA, the opportunities become endless. Students are harassed with questions about their career paths. “Are you doing public accounting or private? Do you want to do audit or tax?” There are so many options for young graduates and some are unaware of the potential each career path can lead to.

In the public accounting world, the most common career choices are tax and audit. Investopedia defines tax accounting as the “focus on taxes rather than the appearance of public financial statements. Tax accounting is governed by the IRS which dictates the specific rules that companies and individuals must follow when preparing tax returns.” Tax accountants prepare tax returns and can specialize in a particular niche such as individual’s returns, partnerships, corporations, healthcare, or not for profits. As a tax accountant, you can expect to see your desk every day because you rarely will prepare tax returns at the client’s office. However, the higher up you make it in the company, the more client contact you will make.

When you enter a public accounting firm wanting to do tax, you start as a Tax Associate. Tax Associates are responsible for the preparation of returns. As a tax associate, you are not required to have your CPA, but you are not able to move up in the company if you do not earn it. Tax Associates have very little communication with clients. Once you do achieve your CPA and have had 2 years of experience, then you have the potential to be promoted to a Senior Associate. After one year of being a Senior Associate, then you have the possibility to be promoted to Senior Associate II. As a Senior Associate and Senior Associate II, you still have the task of preparing more complex tax returns but you also begin reviewing Associates work. Once you have achieved one year as a Senior Associate II, then you can start applying to become a Manager. Managers are responsible for the associates. Managers lead a group of associates on multipart returns and they also review all the tax returns before they are sent to the Directors for final review. After one year as manager, then you could be promoted to Senior Manager. Senior Managers usually start reviewing returns rather than preparing them but they are involved in the preparation process as well. With two years of experience as a senior manager, you then could be promoted to Director. Directors are responsible for acquiring clients, reviewing returns, and signing off on the return. Directors have responsibility of communicating with clients and getting the correct information to accurately complete the return. After two years as Director then your next promotion will be Managing Director. Managing Directors have the same responsibilities as a Director, but there is an extra emphasis on acquiring clients. With two years of experience as Managing Director, then your next promotion is Partner. If you stay on the fast track, then you can make Partner after being in the company for only 10 years. No one can make an argument claiming that there is no opportunity for promotion as a Tax Accountant because if you take care of your business then a promotion will be coming your way.

With promotions come increases in salary. According to Glassdoor.com, the national average starting salary for a Tax associate is currently around $59,000 but can earn up to a 6% increase after the first year or two. When promoted to Senior Associate, you can start earning $77,500 and potentially earn up to $100,000. If you work in the public accounting industry for 4-5 years and become a Manager, then you could start earning around $107,000 and have the potential to make around $130,000. If you make it to Senior Manager, then you can start earning $159,500. Directors begin making around $180,700 and could potentially earn up to $260,000 per year. Partner’s salaries are a little more classified, but according to Big4Bound.com, Partners can earn anywhere from $200,000 per year to $10,000,000. That is a lot of zeros, but it is well earned. Tax accountants have tough deadlines and are known to work 80+ hour weeks during busy season. 80 hour weeks do not leave much flexibility in your schedule so one should carefully consider if this is the career path they want to pursue.

-Shelby Taylor