A Career in Accounting.(How Much Do Accountants Earn?)

A Career in Accounting.(How Much Do Accountants Earn?)

How Much Do Accountants Earn?
Accounting is a very important aspect of running a business of any size and has historically been considered a good career choice for people who are good at mathematics and have a fine eye for detail. Many people, however, are unsure of just how much the average accountant makes in any given year. Understanding the earnings potential of an accountant may be the determining factor in many people's career decisions.
Function


An accountant ensures that businesses are run efficiently and can suggest ways to improve profits or areas in which to make cuts to maintain profitability. Additionally, accountants also serve individuals in managing their wealth and investments, as well as assisting local, state and federal governments in maintaining budgets or uncovering fraud. According to the Bureau of Labor Statistics' Occupational Outlook Handbook for the 2007 to 2008 year, accountants can expect to earn between $42,520 and $71,960 yearly; the range of salaries is determined by many factors such as place of employment, nature of work and amount of accounting experience.

Types
One of the most common types of accountants are those who work for a governmental agency. Local, state and federal governments employ accountants to track contract bids, expenditures, income (usually in the form of taxes) and occasionally auditing private businesses. Additionally, these accountants also must ensure that all funds paid or received are in compliance with a complex network of local, state and federal laws. Most of the government-employed accountants work in the various taxation departments with Federally-employed accountants often working for the Internal Revenue Service (IRS). Working for the federal government, a starting accountant with minimal education may expect to begin well below the national average with a yearly salary of $28,862. More experienced and educated accountants, for example those who have Masters' degrees, may expect to earn more than $43,000 a year. Those who have many years of experience and extensive training can earn up to $78,655 a year.
Considerations
Choice of employer is a serious factor in considering a career as an accountant. For example, those employed by state agencies usually earned the least of all those surveyed by the Bureau of Labor Statistics, averaging about $47,000 a year. Local government accountants earned slightly more than their state counterparts, averaging $50,120. On the other hand, those who worked in the private sector, such as for management companies, could expect to average $55,560 a year. The best paid accountants, overall, worked for accounting or tax preparation companies, and averaged $57,020 for 2006. For more information, see Resources, below.


Benefits
Those who go on to attain Masters' degrees can expect to benefit from their increased education. In 2006 an accountant with a Masters' Degree could expect to begin their career earning slightly over $49,000 a year; almost $7,000 a year more than the minimum national average range. Level of education has a considerable benefit in terms of promotions as well, according to a survey conducted by Robert Half International. In lieu of education, accountants who had multiple years of experience in their position could also expect to benefit from their labors through promotions, but may be handicapped somewhat compared to someone with more education.
Geography
Where an accountant is employed is another factor in deciding the amount of earnings they can expect. In states or regions where the cost of living is below that of the national average, accountants can expect to earn less than the national average described in the Bureau of Labor Statistics' report. Conversely, those employed in high cost-of-living areas can expect significantly more pay. The trade-off on either end of the spectrum is the overall cost of rent or mortgage, transportations, food, clothing, utilities and other expenses which may lead to comparable living standards. Still, in a nation-wide average, the top 1% of accountants earned around $94,050 a year and the most well-qualified of those accountants earned upwards of $208,000 a year regardless of location.

A career in accounting (How to Become an Accountant)

A career in accounting (How to Become an Accountant)

Successful accountants need to possess a special aptitude for numbers and a close attention to detail. They must also have excellent computer skills and be adept at oral and written communication. This is a career in which education and constant accuracy are of utmost importance.

1. Make certain you excel in math in high school. Ask your guidance counselor which classes to take to best prepare you for college and a degree in accounting. Also ask for a list of colleges that offer accounting programs and degrees.

2. Write to colleges for their catalogs and applications well before your senior year in high school. In order to receive Certified Public Accountant (CPA) certification from a state, you will need to first receive a bachelor's degree in accounting or in a related business field with numerous accounting courses.

3. Do research on the degree requirements of the state in which you hope to obtain your eventual CPA certificate. Some states are now requiring 150 semester units for an accounting degree, and others will do so in the future. See the American Institute of Certified Public Accountants (aicpa.org) for further information.


4. Make certain that the colleges to which you apply offer accounting programs that will fulfill all of the state's current requirements.

5. Decide which accounting field best suits your interests. The major fields are public, government, and management accounting and internal auditing. Realize that within each field there are numerous subfields.
6. Become proficient with a variety of accounting software packages.

7. Work at part-time jobs or internships in accounting firms during your college years, especially during the summer, when you can gain full-time experience in the field. Many firms that hire entry-level accountants after graduation from college require this work.

8. Take the four-part, two-day Uniform CPA Examination prepared by the American Institute of Certified Public Accountants. You will need some accounting experience, in addition to a bachelor's degree, before applying for the test.

A Career in accounting. (Forensic accounting)

A Career in accounting. (Forensic accounting)

Forensic accounting can be a very lucrative and enjoyable career with a wide variety of potential employers. Forensic accountants -- like all accountants -- must have a thorough knowledge of Generally Accepted Accounting Principles (GAAP), business practices and applicable laws. In the United States, most forensic accountants have at least a bachelor's degree in accounting, with a few years of experience within that field.
The next step in becoming a forensic accountant is passing the Uniform Certified Public Accountant Examination to become a Certified Public Accountant (CPA). This exam was created by the American Institute of Certified Public Accountants, which is a condition of employment by many firms, in addition to meeting other state and federal eligibility requirements. Continuing education is a requirement of maintaining the status of CPA, and many aspiring forensic accountants attend graduate school to fulfill this requirement, as well as gain more knowledge in the field and become more marketable. Many universities offer master's degrees in forensic accounting or in business administration with a concentration in forensic accounting.


Some forensic accountants take courses in:
• Sociology
• Psychology
• Law enforcement
• Criminal law
• Business law
• Business and finance
• Information systems
• Communication
There are several organizations that provide training and additional certification for forensic accountants. The American College of Forensic Examiners International (ACFEI) began offering a designation of Certified Forensic Accountant (Cr.FA) in 2001. There is also the Association of Certified Fraud Examiners (ACFE), which offers a designation of Certified Fraud Examiner (CFE), and the Association of Certified Fraud Specialists (ACFS), which has a designation of Certified Fraud Specialist (CFS). Each organization requires that its members possess varying degrees of education and experience, and they must sit for additional exams. These certifications show that a forensic accountant has training and experience beyond that of a standard accountant.
The term "forensic accounting" was first used in 1946 by Maurice E. Peloubet, a partner in a New York accounting firm. He wrote about the use of accounting in courtroom proceedings as part of testimony, but acknowledged that investigation was becoming more prevalent for accountants due to the increase in government agencies that regulated financial practices. Journals began to publish articles about the connections between law and accounting. In 1953, a New York lawyer named Max Lourie claimed that he invented the phrase "forensic accounting," although Peloubet wrote about it first. Lourie stressed the need for forensic accounting literature and training.
Forensic accountants are more than just number crunchers who happen to work on criminal or civil disputes -- these accountants possess additional skills. They must conduct investigations, know how to use a variety of computer programs and communicate well. Some forensic accountants specialize in specific industries that are susceptible to fraud, such as insurance or banking, and learn the business practices associated with those fields. Because the reputations of individuals and companies are at stake, forensic accountants must be very discreet when conducting their investigations. They must be independent and impartial, taking into account both the financial records and the conduct of employees. Unlike other accountants, when forensic accountants conduct audits, they are actively looking for signs of fraud. In addition to examining financial statements to determine whether they are accurate and complete, they may seek out internal databases and court records. Because people committing fraud have hidden the evidence of their crimes, forensic accountants must look beyond the numbers and anticipate criminal actions.
Regardless of whether their assignments are criminal or civil, these accountants follow the same forensic accounting basics when conducting their investigations.


First, they meet with a government representative, attorney or other client to learn the specifics of the alleged fraud. Then, they begin their initial research and plan the logistics of the investigation. The next step is to search the records -- bank statements, credit statements, journals, ledgers, databases, e-mails and memos -- anything that will offer a bigger picture of the financial situation.
After gathering the records, forensic accountants often conduct interviews with the accused and other involved parties to get individual stories about the irregularities. Forensic accountants must possess observational skills to pick up subtle hints or suspicious clues that may eventually lead them to the perpetrator. Clues may include new cars, numerous vacations and starting additional businesses without other visible sources of capital.
How far will forensic accountants go to obtain information? It all depends on the nature of the case. In criminal cases, they usually work with law enforcement and the district attorney's office. Just as with other types of evidence, the prosecution must obtain search warrants and subpoenas to locate financial information and compel knowledgeable people to give interviews about the situation in question. If the case is civil, they're empowered by the client, who is usually a part of the company being investigated or holds agreements that permit accounting investigations.
After gathering all of the information, a forensic accountant begins the analysis. He or she may trace the assets of the company, calculate the total loss and exactly how it occurred, and summarize various transactions. The final step (unless the accountant is also testifying in court) is to prepare a report detailing the plan of action and what the investigation uncovered. This may include graphs, charts, spreadsheets and other methods of explaining the case.
In addition to investigating, forensic accountants may provide litigation support. Attorneys engage the services of forensic accountants to review existing documentation and testimony and explain their financial significance. A forensic accountant can tell the attorney what additional information may be needed to prove the case and what questions to ask of witnesses. The forensic accountant may also review damage reports and state whether the report was put together accurately and supports the case.
Now that we've established what forensic accountants do, let's look at the specific types of assignments that they may investigate.