While many accountants do focus on helping people file their taxes every year, they also perform a number of other tasks for individuals and businesses involving taxes, financial statements and managing income year-round. There are a variety of types of accountants and qualifications to be considered when thinking of becoming an accountant or hiring one for any reason.
What Do Accountants Do?
Accountants perform a variety of tasks for individuals and businesses. Generally, they handle the finances of a person or business, and help with tax questions and regulations. In a business, the accountant is usually tasked with keeping track of income and expenses, payroll, filing taxes and providing financial reports. Many individuals hire accountants as well, mostly to stay on top of taxes throughout the year. Those owning their own business or having complex investments consult with their accountants many times during the year. One of the most valuable services an accountant offers is to help save money and increase profits by making financial reports and keeping track of profits over extended periods of time.
What Types of Accountants Are There?
“Accountant” is a general term and covers a variety of specific jobs. A Public Accountant has an associates degree in accounting and have more legal restrictions on what they are allowed to do than other accountants. A Certified Public Accountant (CPA), Certified Internal Auditors (CIA), Certified Management Accountants (CMA) and Accredited Business Accountants (ABA) are all legal certifications that can be earned for accountants. All these titles are similar, but vary in specialities and the services they offer. All these certifications also require the accountant pass an exam to show their knowledge of accountancy and the specific issues related to the certification. There are many private accountants who do not have any of these certifications, and do not require them for the work they do.
What Are The Qualifications to be an Accountant?
Many individuals work as an accountant with no formal qualifications, but they may have a difficult time finding a corporate position or getting promoted. Most businesses will require a licensed accountant, in the form of a CPA, CIA, CMA or ABA for legal reasons. This helps to protect the business when there are complex financial issues, as well as assuring the employers that the accountant has extensive knowledge of the United States Tax Code and legal requirements involving finances. All of the accountant certifications require a Bachelors Degree in Accounting – though some states will allow people to take the CPA exam with only a few accounting classes. The degree must include a number of courses in accounting and finances, and then the individual can sit for the certification exam. The exams are extremely difficult, and less than half of the CPA test-takers in 2010 passed. However, holding the certification shows that the accountant has extremely detailed knowledge of tax regulations and accountancy.
How to Become an Accountant
There are many ways to become an accountant, all depending on what the individual’s goals are. One way to enter the field of accounting is to get an Associates Degree in Accounting, which will allow the person to gain experience and get an entry-level position or work in the private sector. Another method is to get a Bachelors Degree with the required number of accounting classes and then take the CPA exam (or other certification test). There are several options to get the Bachelors Degree online for those making a mid-career switch, as well as text preparation.
Government Regulation of Accountants
There are a variety of legal issues involved in accounting. As such, accountants can come under the jurisdiction of a number of government regulations. The most common government body to interact with accountants is the Internal Revenue Service (IRS), since the majority of an accounts responsibilities involve taxes. Depending on the type of accounting and the certification of the accountant, they may fall under other government organizations such as the Securities and Exchange Commission (SEC). Individual states may also have specific regulators and laws that accountants are expected to be familiar with.
How Much Money Do Accountants Make?
Just as in any profession, an accountant’s income varies based on a number of things. The more qualifications and experience an accountant has, the greater their earning potential. Accountants for large companies generally start at an entry-level position with scheduled raises, and possibly bonuses based on performance. Those who work as accountants for private individuals or specializing in tax returns and auditing may charge hourly rates, or a percentage of the tax return, or set a flat fee for their services. A Chief Accounting Officer (CAO) of a large corporation will make a great deal more money than most private and lower-level accountants, earning upwards of six figures.