Recent history has seen the accountant one of the most vital characters in the international economic stage. Names such as Enron, Worldcom and Bernie Madoff are associated with a few well-known scandals that have revealed just how important the accounting function is to economic stability. Companies seek to employ credible, reliable accountants, and to utilize accounting systems that close loopholes and reveal vulnerabilities. Colleges and universities have responded by offering specialties that allow accounting majors to focus their studies and choose a specialty that meets the needs of today’s employers.
Traditionally, accounting majors have followed one of two paths: financial accounting and managerial accounting. Now, accounting majors can choose three additional specialties: taxation, auditing, or accounting systems.
The accounting major that chooses financial accounting as a specialty is expected to gain expert knowledge of Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS). These are standards set forth by the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB), independent boards that regulate proper accounting practices. A financial accountant is expected to develop and review financial statements that are prepared in accordance with GAAP and IFRS.
A financial accountant often continues to become a Certified Public Accountant (CPA). A CPA is an accountant that examines the financial records of companies and attests to their adherence GAAP and IFRS. Financial accountants and CPAs work at accounting firms, corporations, or they can work independently, consulting with small businesses and individuals to offer advice and prepare their financial documents.
Management accountants seek to understand and communicate the financial implications of business decisions. A management account might answer questions such as, “If we switch suppliers for our primary raw material, would the per-item cost increase or decrease? Would our customers respond by increasing or decreasing purchases?”
Large companies hire management accountants to specialize in a certain aspect of the company’s financial activities, such as overseeing depreciation for fixed assets or managing the company’s cash accounts.
A management accountant may become a Certified Management Accountant (CMA). This certification is similar to a CPA designation, except that the examination focuses on cost accounting, financial planning and management issues.
Accounting majors can also focus on taxation. Tax accountants are expected to understand and follow the tax laws applicable to their employers. They may recommend how to best handle financial transactions such as mergers or equipment purchases to minimize tax liability. Tax accountants may consult with individuals on tax return preparation. Many tax accountants are CPA’s, providing credibility to their expertise.
The auditing specialty gained notoriety after the public became aware of how fraudulent accounting schemes could affect their own investments. Auditors investigate evidence of mismanagement and fraud. Audit accountants might work a government organization such as the IRS, FBI, or SEC. Other organizations that seek auditing expertise include local law enforcement agencies, law firms, or private companies that want to protect against internal fraud.
Auditors often seek a CPA designation, but they can also sit for the Certified Internal Auditor (CIA) examination. The CIA examination covers theory and practice of internal auditing, management, quantitative methods and information systems, finance and economics.
Accounting Information Systems
The Accounting Information Systems (AIS) specialty focuses on the technologies and information systems used for accounting tasks. Software designers that understand accounting concepts have a unique skillset. Those that choose an AIS specialty can audit computer systems for firewall vulnerabilities, design cost-optimization software, or maintain internally developed accounting software.
When choosing a specialty, colleges and universities design their programs differently. Some offer each of the above specialties in an undergraduate degree, while others may require you pursue a Master of Accountancy (MACC) degree, which may require one or more years of additional courses. Other colleges may only offer a business administration degree with a specialty in accounting that allows you to further specialize, but options may be limited. When choosing a specialty, choose a college that best fits your career aspirations.
About Sara Huter
Sara Huter has over 15 years experience in the banking and energy industries, and over 10 years as an adjunct professor. Her work has been published for BusinessBee.com, the International Directory of Company Histories, the Encyclopedia of Business Insights: Global, EHow.com, and Examiner.com. Find out more about Sara at her Google+ Profile.