Your Accounting Career: Everything You Need to Know in Under 5 Minutes
The Ultimate Guide to a Career in Accounting
Accounting is the practice of and knowledge about methods for recording transactions, keeping financial records and performing internal audits. It can also include reporting and analyzing financial information, reporting those findings to management and advising on taxation matters.
Why choose accounting?
Accounting offers high pay and fast career placement after graduation. The demand for accountants is growing and outstripping supply. In other words, job opportunities are better than ever for accountants.
Thinking about a career in business? Accounting is one of the best ways to enter the business field, especially now. In the last two decades, businesses have seen the rise of the Internet, increased government regulations, frequent tax law changes, globalization of business and the constant downsizing and restructuring of corporations. All this equals higher demand for accountants and more ways for you to get into accounting. You could be a financial expert, systems professional, management consultant, budget analyst, or forensic accountant, among other exciting roles.
Types of accountants
Careers in public accounting focus on auditing and tax functions. Public accountants usually work for several clients as part of a firm or on their own. It generally takes a couple of years to advance to positions with more responsibility, and a few more to be promoted to a senior position. If you excel at your job, you can become a manager, director or partner. You may also decide to open your own accounting firm, transfer to executive positions in management accounting or become consultants advising businesses on complex accounting matters. Obtaining your Certified Public Accounting (CPA) license is highly recommended for those in the practice of public accounting, as it’s required for anyone submitting filings to the Securities and Exchange Commission (SEC). For larger firms, also consider a master’s degree to set yourself apart.
Management accountants work as cost accountants, budget analysts, internal auditors or financial analysts inside an organization. They may advance to positions such as accounting manager, chief cost accountant, budget director, or manager of internal auditing. Some become controllers, treasurers, financial vice presidents, chief financial officers or corporate presidents. Many senior corporate executives have backgrounds in management accounting, internal auditing or finance.
Most of your work will focus on reporting functions within the organization to help guide planning and decision making. You could also manage reporting to stockholders, regulatory agencies and tax authorities.
You should strive for a bachelor’s degree in accounting and pursue a Certified Management Accountant (CMA) license. These are not required to work as a management accountant but are highly recommended for advancement in the field. You can also earn a related professional designation such the CPA license.
As a government accountant, you could work at any level of government to analyze and oversee the performance and allocation of funds. At the federal level, opportunities exist in diverse areas such as the Department of Defense, the IRS and the SEC. In government accounting, earning your CPA license will benefit your career as well as add credibility to your title.
Internal auditors deal with conducting compliance audits, developing internal controls and establishing accounting information systems. As an internal auditor, you would be involved in operational audits and provide recommendations and plans for continued financial and operational improvement within an organization. If you want to thrive in the internal auditing field, you should consider earning your CPA license as well as your Certified Internal Auditor (CIA) license. Both will help in advancing your career.
How to become an accountant
1. Get the right degree
You don’t need a bachelor’s degree to be an accountant, but having one will make you stand out from other applicants who have an associate’s degree. A total of 150 credit hours are commonly needed to obtain your CPA license—most bachelor’s degree programs require 120 credit hours—but check with your state board of accountancy. All states have slightly different requirements. If a 150-credit requirement is in your future, consider double majors such as Accounting and Finance or Accounting with a minor in Business Communications to make the most of your time spent pursuing 150 credits.
2. Pick a specialty
Accounting is a versatile degree and students who obtain it can find jobs in accounting departments, finance departments, education, sales, production management, client management, product development, banking and financial planning – the list of career options is endless. You will have time to decide, but as with any career, you should eventually specialize in one facet for the best long-term results.
3. Prepare to take the CPA Exam
Often considered the “gold standard” in the accounting profession, upcoming or recent graduates should research, prepare for, and pass the CPA Exam. Check with your state board for requirements to sit for the CPA Exam – some states allow you to sit before you have fully met 150-credit hours requirement.
4. Get a job
In order to get licensed as a CPA , most states require at least a year of work experience in accounting. This can be an internship or regular employment in an accounting firm.
5. Continue your education
Even though you’ve completed your bachelor’s degree, you will still have to continue your education in graduate studies, earning additional certifications or both. When it comes to advancing your career, a credential like a CPA, CMA, CIA or CFA will be key. Many states also required continued education to maintain your CPA license.
Top accounting schools in the United States
*Rankings according to US News & World Report for Fall 2014. (Not including room and board; and books and supplies.)
|SCHOOL||LOCATION||IN-STATE TUITION||OUT-OF-STATE TUITION||ENROLLMENT||ACCEPTANCE RATE||SETTING|
|University of Texas||Austin, Texas||$9,798||$34,722||52,059||40.2%||Urban|
|University of Illinois||Champaign, Illinois||$15,602||$30,228||44,942||62.4%||City|
|Brigham Young University||Provo, Utah||$5,000||$5,000||31,123||48.7%||City|
|University of Notre Dame||Notre Dame, Indiana||$46,237||$46,237||12,124||22.3%||City|
|University of Pennsylvania||Philadelphia, Pennsylvania||$47,668||$47,668||21,358||12.2%||Urban|
|University of Southern California||Los Angeles, California||$48,280||$48,280||41,368||19.8%||Urban|
|University of Michigan||Ann Arbor, Michigan||$13,977||$41,811||43,710||33.3%||City|
|Indiana University||Bloomington, Indiana||$10,388||$33,241||46,817||72.2%||City|
|New York University||New York, New York||$46,170||$46,170||44,599||32.4%||Urban|
|Ohio State University||Columbus, Ohio||$10,037||$26,537||57,466||55.5%||Urban|
Certification and Licensure
About 40 percent of accountants have earned specialized certification. Certification and licensure gives you an advantage in the job market. It not only demonstrates your professional commitment and expertise, but also is crucial for certain accounting functions. What are your options?
Certified Public Accountant (CPA)
The CPA license is a state license to practice as a Certified Public Accountant. It’s not necessary for a job in accounting, but many corporate accounting firms encourage and look favorably on those with CPA licenses. It is the “gold standard” in the profession. Here are the basic requirements to become a CPA:
a. Education: Most states require CPA candidates to possess an undergraduate degree with the equivalent of a major in accounting. A number of states now require 150 hours of college education, but check your state’s requirements.
b. Pass the CPA Exam: Pass the CPA Exam: You must pass all four sections of the Uniform CPA Exam. The exam is developed by the American Institute of Certified Public Accountants (AICPA) and administered at Prometric testing centers in partnership with the National Association of State Boards of Accountancy (NASBA). The CPA Exam is computer-based test. The times it takes to complete each section varies:
- Auditing and Attestation (AUD) (4 Hours)
- Regulation (3 Hours)
- Financial Accounting and Reporting (4 Hours)
- Business Environment & Concepts (3 Hours)
The cost to take the CPA Exam varies from state-to-state. Expect to spend about $1,000, not including review course materials to help you study for the exam. Some firms will pay for and provide you with a review course but do your research on which course is best for you. You can take a section one at a time and in any order but must pass all four within 18 months of passing the first section. The CPA Exam is offered during the first two months of every calendar quarter (Jan/Feb, Apr/May, Jul/Aug, Oct/Nov), also called “testing windows.”
c. Experience: Generally, one year of accounting experience is required for licensure.
Certified Management Accountant (CMA)
The CMA certificaiton is a globally recognized credential geared toward individuals in corporate accounting who responsible for finance and accounting decision-making. The CMA program is designed to validate advanced skills required to manage finance functions within an organization.The education requirement for the CMA Exam is less strenuous than the CPA because you only need a bachelor’s degree to qualify (120 credit hours).
Expect to spend around $1,000 for the CMA Exam, not including your desired review materials. The exam is offered in three windows throughout the year (Jan/Feb, May/Jun and Sep/Oct). Only one exam part can be taken at a time. Candidates must register to take one exam part within the first 12 months of entering the program and must complete both exam parts within three years.
CMA certification also requires two years’ experience and membership in the Institute of Management Accountants (IMA).
Certified Internal Auditor (CIA)
The CIA license is the only globally recognized designation for internal auditors. It is awarded by the Institute of Internal Auditors and prepares you to do management functions such as strategic planning, risk assessment and internal control assessment. Many internal auditors do not stay in the internal audit profession and this designation helps them prepare for a well-rounded career in management.
The CIA is a three-part, multiple-choice exam: Part 1: Internal Audit Basics, Part 2: Internal Audit Practice, and Part 3: Internal Audit Knowledge Elements. Candidates with a bachelor’s degree are required to have 24 months experience to become certified. Master’s degrees can substitute for 12 of the required 24 months experience. Additionally, candidates can apply and sit for the exams without the work experience, provided the experience requirement is met within four years.
Candidates should expect to spend around $800 for all three parts of the exam, not including your review preparation materials.
Chartered Global Management Accountant (CGMA)
The CGMA designation is a globally recognized accounting designation that adds credibility to your resume by demonstrating your business skills, discipline and commitment. It is a good fit for accountants worldwide, including business strategists, board members, and CEOs.
The CGMA complements the CPA designation. In fact, CPAs with 150 credit hours and three years’ management accounting experience can sit for the strategic case study exam to obtain the CGMA. It is highly recommended earning a CPA license first as, without a CPA, those with three years’ management accounting experience must first obtain the Chartered Institute of Management Accountants (CIMA) Certificate in Business Accounting (five exams) as well as the CIMA Professional Qualification (19.5 hours of exams) before they can sit for the strategic case study to obtain the CGMA.
Costs vary depending on which route fits your needs.
Chartered Financial Analyst (CFA)
Considered the “gold standard” in the investment industry, professionals who pursue the CFA charter are generally from the corporate and investment worlds—financial advisers, investment banking analysts, portfolio managers, private bankers, research analysts, and traders. The CFA charter is issued by the CFA Institute.
Many accountants also have a finance background and may decide to pursue a career specializing in finance as a risk manager, financial advisor, or chief executive. The CFA charter may be a good fit for accountants with such aspirations.
The CFA exam is offered only on certain dates and is not an exam you can schedule at your convenience. Level I is offered twice a year, a single day in June and a single day in December. Level II and Level III are offered only once a year, on the same date in June. The CFA exam is a pencil-and-paper exam.
The three levels of the CFA Exam do not test subject matter separately, as the CPA and CMA do. Instead, each level of the exam builds on the last and covers many of the same subjects but at broader and deeper levels.
You can expect to spend about $3,000 on exam fees for all three levels, which does not include your review materials. The CFA Institute recommends that you commit at least 300 hours preparing for each level of the exam, or 15-20 hours a week for four to six months. You need a bachelor’s degree or four years of professional experience to sit for the exam. You also need four years of experience to become a charterholder.
Certified Financial Planner (CFP)
The CFP designation is another highly regarded designation. That’s because Certified Financial Planners have completed extensive training and are held to rigorous ethical standards. They typically excel as financial advisors or consultants and/or working in insurance, brokerage houses, or banking industry. As accountants, the financial industry may be your niche and you may find yourself considering CFP certification.
To obtain the your CFP designation, a bachelor’s degree is required as well as three years of professional experience in the financial-planning process, or two years of apprenticeship experience that meets additional requirements. In addition, completion of the CFP Board’s coursework component is required. After successful completion of the education component, the candidate can sit for the CFP Exam.
The CFP Exam is offered three times a year each over a five-day period. The CFP Exam is offered in two three-hour sessions at Prometric testing centers. The exam fee is around $600, which does not include costs of your coursework or review materials.
You should make a point to research the scholarships available to accounting students. Below are a few to get you started, but be sure to check for scholarships your school offers as well. These are some of the best sites to look for scholarships before you go to college.
- Surety Industry Scholarship Program for Minority Students — You must be a minority student who has declared a major in insurance, risk management, accounting, business or finance, and must have at least a 3.0 GPA and completed at least 30 credit hours with at least six relating to your major.
- Laurels Fund Scholarships — In order to qualify, you must be a Ph.D. student, and you need to have completed your comprehensive examinations.
- Herman J. Neal Scholarship — In order to qualify, you must African-American and should be pursuing a degree in accounting or licensure as a CPA. You must have at least two years of post-secondary education completed and be attending a college or university in Illinois, and have a GPA of at least 3.0.
- Catching the Dream MESBEC Program — If you are Native American pursuing a STEM field and attend a school that is accredited on the state, federal or tribal level, you should consider applying for this scholarship.
- Society of Hispanic Professional Engineers or SHPE Scholarships — You must be a registered, full-time student pursuing a degree in math, science, technology or engineering, and you must have a 3.0 or higher GPA.
- ALPFA Scholarship Program — You must be enrolled as a full-time student in a degree-seeking program that is related to one of those fields. In addition to being a sophomore, junior or senior, you must have a GPA of 3.0 or higher.
- HSF/Marathon Oil Corporation Scholarship Program — You must be a sophomore majoring in accounting, engineering or a related field, and you must have a GPA of 3.0 or higher.
- The National Society of Accountants Scholarship Foundation — In order to qualify, you must be working on a degree program at a two- or four-year university or college. You must also currently have a B average or higher.
- Frank L. Greathouse Government Accounting Scholarship — In order to qualify, you must be attending school full time, and you must be planning to go into a career in finance with the state or local government.
- Ritchie-Jennings Memorial Scholarship — The Association of Certified Fraud Examiners awards scholarships ranging from $1,000 to $10,000 to full-time graduate or undergraduate students enrolled in accounting, business administration, finance or criminal justice programs.
- Frank L. Greathouse Government Accounting Scholarship — The Government Finance Officers Association gives a $6,000 scholarship for undergraduates or graduate students preparing for a career in state and local government finance.
- Online Accounting Degree Programs Scholarship — Students must have at least a 3.0 GPA.
- Wiley CPAexcel Scholarship – For any full or part-time college student taking at least one accounting course.
- COAG Scholarship — As long as you are a high school senior in the state of Georgia who plans to attend an accredited Georgia college or university while pursuing a degree in accounting, finance, pre-law, business, political science, government or law enforcement, you qualify for this scholarship.
- Texas Fifth Year Accounting Student Scholarship Program — In order to qualify, you must attend a public or private school in Texas.
- A.A. and Hattie Mae Bush Accounting Scholarship — You must be a graduating high school senior or a current college or university student to apply, and you must be planning to attend West Texas A&M University, Amarillo College or Texas Tech University.
- American Society of Women Accountants Scholarship — You must be attending a two- or four-year college or university in southwest Missouri in order to qualify for this scholarship.
- Financial Women’s Association of San Francisco — To be eligible, students must be enrolled at an accredited Bay Area college or university, and must have a minimum 3.4 GPA.