“Accounting” and “tax preparation” have become fairly synonymous since the government began leveraging income tax in 1913, but both the history and the profession of accountancy encompass much more than tax claims.
The stereotype of white-collar workers who sit in their offices, frantically filing tax returns and endlessly punching numbers into an adding machine is an outdated one. Accountants can work in a variety of fields and perform an array of duties, and accounting consistently ranks high in terms of job satisfaction and work/life balance.
The IRS employs accountants (and they brought down Al Capone in the 1930s by charging him with tax evasion, after the police failed to convict him for murder) but so does the FBI, and some forensic accountants even receive firearms training. Partners at the accounting firm PricewaterhouseCoopers have held the honor (and occasionally the disgrace) of hand-counting the ballots for the Academy Awards since 1941. And despite concerns that the integration of AI will render accountants obsolete, the job remains one of the most secure career paths, with a projected growth of 11% between 2016 and 2026. Technological innovation relieves accountants of menial computing tasks and enables the diversification of the field.
Today, the accountancy profession in the United States can be divided into four main categories with almost unlimited specializations—no surprise, really, considering the vast range of organizations, from family-run farms to Fortune 500 powerhouses, in need of business insight and guidance. Here, we discuss the distinguishing features of each category and highlight common specializations.
Corporate accounting can refer to a number of accounting roles within an organization, including staff, project, cost, financial, and management. Corporate accountants might prepare their company’s tax statements, yes, but they may also handle or supervise invoicing, reconciling accounts, external reporting, data analysis, budgeting, financial strategy, and risk management. From a more generalized staff position to a specialized cost accountant role, corporate accountants are responsible for keeping accurate and well-organized records, maintaining compliance with standards like the Generally Accepted Accounting Principles (GAAP) and the Internal Revenue Code (IRC), and staying apprised of a company’s financial health so that leaders can make sound decisions and employ perceptive strategies for future success.
While corporate accountants are generally employed by a single company, public accountants work with a variety of external clients ranging from individuals to corporations. Regardless of the scale, accuracy is paramount, as is current knowledge of the GAAP and industry best practices.
Fiduciary accountants, who often work with estates and trusts, must ensure the precision of their reports and records so that they stand up to IRS scrutiny.
Investment accountants must keep pace with investment trends and regulations, and develop strategies for maintaining and building capital.
Financial advisors and CPAs help their clients meet financial goals and plan for the future. Clients trust CPAs and tax accountants to continually cultivate their knowledge of ever-changing tax laws to keep their businesses compliant.
Auditors verify, assess, and organize records for maximum efficiency and offer recommendations for growth and improvement.
Government accounting objectives diverge from those of corporate and public accounting significantly enough that a separate organization was created to develop and update standards. The Governmental Accounting Standards Board (GASB) issues accounting and financial reporting standards for state and local governments to uphold consistency on both levels. As governments must tightly control resources and designate revenue for various projects and programs, specialized sets of self-balancing accounts called funds are employed to record assets and liabilities, as well as operations and objectives. This unique accounting format requires a specific skill set and a dedicated career.
Not all detectives are accountants, but some accountants are detectives. Forensic accountants use “clues” to reconstruct incomplete financial information for defunct or fraudulent businesses. They also investigate white-collar crimes like embezzlement and bankruptcy. Litigators may use investigation results as evidence in a court case and call in forensic accountants as expert witnesses. Forensic accountants, then, need to possess a working knowledge of the rules of evidence and unparalleled attention to detail. This branch of accounting requires a strong sense of curiosity and a demonstrated ability to collaborate and problem-solve.
From job duties to work environments, accounting positions differ in a variety of ways. Some characteristics hold true across all fields, however: they require a bachelor’s degree (usually in accounting, but finance, economics, or business degrees are valuable to the profession as well), proficiency with numbers, and interpersonal communication skills.
The ability to interpret complex data, communicate it effectively to peers and clients, and use it to make insightful decisions will only increase in value as automation and artificial intelligence technology continues to advance.
It’s time to lay the frazzled, office-bound tax accountant trope to rest—modern accountants use cloud-based software and automation to handle the number-crunching, so that they can optimize their efficiency and their clients’ results.