There are four major kinds of accountants: public accountants, government accountants, internal accountants, and management accountants. Oftentimes they can be certified in more than one field, and switching is common.
Public accountants work for firms that provide various accounting services to corporations and individuals. They perform a variety of tasks which include auditing, tax preparation, and consulting. Moving up in the field almost always requires passing the CPA exam and getting certified, after which public accountants can open their own firms, move on to different types of accounting, or move up the corporate ladder in larger firms.
The career path for a public accountant in a large firm is fairly predictable. Often, newly employed accountants will spend the first year or so doing fairly menial work and getting adjusted to the office. After that, he or she can move up to become a senior accountant. If the promotions continue, a public accountant can hope to become a high-level manager or even partner in the firm.
Public accountants who decide to open their own firms will have to run a business and build an independent client base. But the advantage of running your own firm is the flexibility and independence to set your own hours and work from home.
Want to put white-collar criminals behind bars? A special area of public accounting is forensic accounting, which investigates potential fraud and illegal financial activities. Forensic accountants often work with law enforcement officials and present their findings in court. With new government crackdowns on public accounting firms, these special accountants are becoming increasingly in-demand.
A new accountant may choose to work for the local, state or federal government, often for the Internal Revenue Service (IRS). A government accountant maintains financial records for government agencies or audits private businesses or individuals who are subject to government regulations and taxation. Accountants in government progress in their careers much in the same way as accountants in private firms do, though their pay is slightly lower.
Internal accountants keep their own company’s financial records accurate and in order. They evaluate their company’s efficiency to make sure that all of the numbers add up. Internal accounting is becoming increasingly important since the passing of the Sarbanes-Oxley Act in 2002, which requires the chief executive and financial officers of accounting firms to sign off on and take responsibility for their firm’s business. With this increased pressure and accountability, firms are hiring more internal accountants to ensure against malfeasance. Internal accountants can also become certified as CIAs, or Certified Internal Accountants. The requirements for this certification are very similar to those for becoming a CPA. A bachelor’s degree, successful completion of a four-part exam, and experience are required for both. Accountants may have multiple certifications and designations, especially if they switch between the four different types of accounting throughout their careers.
Management accountants work internally for the company that employs them, recording and analyzing financial information. What differentiates them from internal accountants is that they are involved in budgeting, managing costs, and evaluating the company’s efficiency. Management accountants often start their careers as internal auditors and work their way up to full-fledged management accountants. The process to become a Certified Management Accountant is similar to those of a CPA or CIA and involves taking a four-part exam.