An introduction to 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.
What 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 a career in public accounting 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.
Education requirements for public accounting
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.
What is the career path for a public accountant?
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.
Public accounting career options
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 accountant consultants
Consultants help clients manage their finances by performing tasks such as forecasting. They act as business advisers or even like outside business managers.
Public accounting auditors
Auditors verify that an organization’s financial transactions are performed in observance of the generally accepted accounting principles (GAAP).
Public accounting tax accountants
A tax accountant helps clients fill out their tax return and ensure they follow all tax regulations in place.