Guide to public accounting

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What is public accounting? 

The world of accounting is comprised of many professional paths, offering those interested in this field the opportunity to become specialized in very narrow business niches. However, 2 main branches of accounting clearly stand out. The first is private accounting, also known as industry accounting. The second branch, which is the focus of this article, is public accounting. 

We cannot say what public accounting is without also referring to private accounting. A simple definition would be that industry accountants are internal employees who deal solely with their company’s financial activities. In comparison, public accountants are considered external professionals. They are either self-employed or hired by a third-party firm to verify the economic activities of one or more businesses from an outside perspective.  

Basically, private accountants work for a single company, while their public counterparts provide services to various external businesses or individuals, ranging from traditional accounting activities to auditing, taxation, and financial planning.  

Is public accounting right for you? 

Accountants collect, compare, interpret, and report numbers, so first and foremost, you must have excellent computing skills. You need to have strong knowledge of current accounting software and information-processing programs – especially of Microsoft Excel – to compile, organize, and understand financial reports successfully. 

You’ll interact with various types of people in different business environments, so it’s essential to have empathy and excellent communication skills. That ties in with 2 other important qualities you must possess – punctuality and resilience. You’ll work where your client has made room for you – sometimes alone in a friendly, quiet office, in other cases crammed in the corner of a crowded open space – and almost always under a high amount of pressure to meet very tight deadlines. This generally means you will need to work long hours and deal with a high amount of stress. 

Other skills, abilities, and competencies a public accountant should have are: 

  • Knowledge of computer systems and applications
  • Analytical and critical thinking
  • Excellent written and verbal communication,
  • The capacity to work independently and as part of a team

Lastly, to be a successful public accountant, you must become a certified public accountant (CPA). Getting there takes a lot of years of study, work experience, commitment, motivation, and hard work, in addition to the associated costs.  

If you tick some or all the above boxes, public accounting might be the right choice for you. 

Things to know before you choose public accounting 

There are pros and cons to every career, and this one makes no exception. Depending on your personality, aspirations, expectations, and way of life, it has advantages and disadvantages. That is why it’s essential to be aware of them before you choose public accounting as your career path. 

On the plus side, public accounting enables you to advance much faster in your career than you would do as a private accountant. Public accounting professionals can choose a specialization, which means they gain a significant body of knowledge and set of skills in a specific market niche. Besides better career opportunities in accounting, this also brings increased exposure, which is key in a business environment. 

The main downside of choosing public accounting over private comes from dealing with a higher degree of pressure from much tighter deadlines and longer working hours, especially at the end of the fiscal year. As already mentioned above, public accountants travel to where their client is located, which can be inconvenient and incur additional costs for self-employed professionals. 

Public accounting education requirements 

If you still think public accounting is what you want to do in your professional life, it would be wise to plan how you will earn the degrees necessary to help you stand out to your future potential employers. 

While you can qualify for bookkeeper or accountant assistant roles with an undergraduate certificate or an associate’s degree, you need to earn a bachelor’s in accounting (BA) to become a public accountant.  

It will generally take you 4 years or 120 credit hours to earn a bachelor’s degree in accounting. Most universities offer part-time formats and even programs that are entirely online, in addition to the traditional on-campus programs.  

Become a CPA 

Although not essential for private accountants, public accountants must be certified to gain access to higher and better-paid roles and have a successful public accounting career. The road to becoming a CPA is long and complex. You can find everything you need to obtain this certification in our dedicated article.  

The educational criteria you need to meet to qualify to sit for the CPA exam vary from one state to another, but almost all states require you to have earned degrees totaling 150 semester credit hours. Go here for a complete list of education requirements by state to become certified.   

The most direct way to meet the credit requirements is to first earn a bachelor’s in accounting program (120 credit hours), followed by a master’s in accounting degree (30 credits). However, there are no rules on how to get the 150 credit hours other than by obtaining them from a higher-education institution that is officially recognized by an independent body at state or national level.  

Public accounting career path 

Entry-level public accountants compile and analyze financial statements, help with tasks such as budgeting and planning, or perform economic reporting activities.  

Public accountants with at least 3 years of work experience can advance to a senior position where they perform advanced financial and auditing activities. In these roles, they may also supervise the work of entry-level public accountants or interns.  

Professionals with over 6 years of public accounting experience usually qualify to become managers. In this role, they oversee the whole workflow of senior and entry-level employees, are in charge of internal control procedures, and manage financial activities.  

There are 3 main branches of public accounting: consulting, auditing, and tax. According to the American Institute of Certified Public Accountants (AICPA), each of these functions has specific day-to-day tasks based on different levels of expertise and seniority. Salaries for professionals working in these sectors can vary depending on the level of experience, the state they operate in, and the type of company that employs them. All in all, the more expertise you have and the bigger the firm you work for – the higher your salary can be. 

Public accounting consultants 

Consultants help clients manage their finances by performing tasks such as forecasting. They act as business advisers or even like outside business managers. 

These are professionals at the beginning of their public accounting career, with up to 3 years of experience in the consultancy field. They perform a series of entry-level advisory services under the supervision of a senior consultant. 

2020 median annual salary: $62,508

Once you have acquired more experience in the field, you can become a consulting senior. Having between 3 and 6 years of specialist knowledge, you perform advanced consulting tasks for your client as directed by the company’s manager.  

2020 median annual salary: $69,684

People who acquire more than 6 years of work experience in consulting can advance into management roles where they oversee staff consultant teams or the work of senior consultants. Manager positions are highly coveted in public accounting as they open up the path to becoming a partner. 

 
2020 median annual salary: $121,965

Public accounting auditors 

Auditors verify that an organization’s financial transactions are performed in observance of the generally accepted accounting principles (GAAP).  

Someone with up to 3 years of experience is a staff auditor. Daily responsibilities include inspecting the legality and accuracy of financial information from commercial organizations and government institutions. 

2020 median annual salary: $57,357 

If you have between 3 and 6 years of experience, you are most likely a senior auditor. In this role, you verify the compilation process of detailed reports that document the financial activity of one or more companies. 

2020 median annual salary: $70,442

Auditing managers are usually professionals with more than 6 years of experience in their field of work. They are typically certified professionals with a high degree of specialization in their field, and they oversee the work of staff and senior auditors. 

2020 median annual salary: $90,996

Public accounting tax accountants 

A tax accountant helps clients fill out their tax return and ensure they follow all tax regulations in place.  

At the beginning of their public accounting career, these are professionals who help clients determine the amount of tax they should pay. Daily tasks in this role include auditing, data analysis, and calculating and verifying the accuracy and legality of tax returns.  

2020 median annual salary: $57,442

When you have between 3 and 6 years of public accounting experience as a taxation specialist, you are usually considered a senior tax accountant. You oversee the work of entry-level professionals and deal with advanced tasks related to tax savings and tax returns. 

2020 median annual salary: $72,542

Six or more years of experience in the field of public accounting taxation can propel you to a manager position. In this position, you would oversee the work of staff accountants and be in charge of complex tax matters.  

2020 median annual salary: $98,375

American Accounting Association (AAA)

Established more than a century ago, the AAA gathers under one roof an extensive community of accountants from all walks of life, including the academic field.

National Society of Accountants (NSA)

With a core mission of helping tax and accounting professionals further their knowledge, NSA is a society that has been active for 75 years.

American Institute of Certified Public Accountants (AICPA)

Established in 1887, AICPA is the official body that represents CPAs, developing and grading the CPA certification examination at state and national level.

Information Systems Audit and Control Association (ISACA)

Founded in 1969, ISACA now has more than 150,000 members in over 180 countries and is a global organization for information governance, control, security, and audit professionals.

National Association of State Boards of Accountancy (NASBA)

Established in 1908, NASBA acts like a forum for the 55 State Boards of Accountancy in the US, which administer the Uniform CPA Examination. In partnership with AICPA, NASBA facilitates CPA examination for professionals overseas.