TELL anyone that you are an accountant and the first thing that comes to mind is a Scrooge-like personality poring over figures in a ledger and hitting those well-worn calculators. The truth is, there is more to accountants and accountancy in general than meets the eye.
As one of the most respected and oldest professions in the world, it has evolved over the years into a very exciting and dynamic field. But what exactly do accountants or auditors of the modern age do? How do people get trained to become one? And what does the future hold for those in the profession?
This article by PricewaterhouseCoopers endeavours to shed some light on this often misunderstood profession and educate potential practitioners and school-leavers looking for a bright and challenging career.
First, we look at the various career options for those considering a career in this profession.
If you are interested in any aspect of the business world, you could consider starting off with accounting. Accounting is “the one degree with 360° of possibilities”, is a claim made by the American Institute of Certified Public Accountants.
The training and experience you receive will go a long way towards preparing you for almost any position in a myriad organisations ranging from small businesses to large corporate or financial entities.
Accountants are not just the bedrock of any organisation, they form its central nervous system and brain as they are heavily involved in all aspects of an enterprise.
Picture this: the engineering or production department wishes to upgrade production by adding more hi-tech equipment. The accountant is normally involved, as he will provide input on how much funds are available which vendor to source from.
Similarly, when the marketing department intends to have an advertising campaign, the accountant is consulted on the viability and effectiveness of the campaign. Therefore, it is not true that accountants just sit in their office with no interaction or involvement with other departments within an organisation.
A unique characteristic of accountancy is that it is truly multi-faceted. Even if you have five accountants sitting together, chances are each of them will be doing something quite different from the other: one might be a financial expert, another a dispute analysis expert, the third a business restructuring consultant, the fourth a budget analyst, and the fifth a tax expert.
What’s more, your career options do not diminish, as you get more senior in your career. No matter where you are on the tree of accountancy, there will always be a new branch for you to explore. In fact, the metaphor is particularly apt as accounting is a genuinely organic profession that grows in tandem with the business community. Whenever the business world takes a new turn, when trends change or new markets are discovered, accountancy responds by growing a new branch!
When mergers and acquisitions became de rigueur, demand for accountants who specialise in those areas immediately increases. Similarly, as big corporations are now taking on greater risks through diversifying their businesses and consolidating other operations within their network, there is a high demand for risk management accountants as well.
However, before you can specialise in any of these highly paid and highly interesting arenas, you have to obtain your professional qualifications and gain relevant experience.
In the beginning, one of the biggest career decisions that you have to make is whether you want to work as a chartered accountant – in other words, join a firm of chartered accountants that typically provides assurance, tax, corporate finance, corporate recovery services to clients; or work with an organisation as an accountant.
The main advantage of becoming a chartered accountant is, you will be exposed to a variety of businesses from various industries in a short space of time. This naturally broadens your knowledge and understanding of the mechanics of the various sectors in the business world as well as gives you the opportunity to travel.
If you do decide to work in a chartered accountants firm, there are options as well. You can decide on whether to join a small or midsize firm or one of the Big Four global firms such as PricewaterhouseCoopers. The Big Four can provide you with excellent training and an environment of unparalleled knowledge and global experiences. However, with a smaller accounting firm, you are likely to be involved in a broader range of duties and have a closer-knit working environment.
The choice is up to you – you have to select the environment that is most suited to your needs and goals. Many graduates, however, prefer the big names for the first few years, and then move on to other industries later, armed with an impressive curriculum vitae and industry savvy.
As an in-house accountant of a corporation, you will prepare all the financial information necessary to help the corporation’s management plan, and control and monitor its activities. You will find yourself working on various management reports, such as budgets and cost analyses.
In addition, you will have to prepare financial statements and annual reports for external parties. You may be called upon to give tax advice, or to institute internal controls. As you will have a finger in every pie, so to speak, you are likely to gain in-depth knowledge of the workings of your corporation very quickly.
There is no limit as to how far, or how fast, you can go. Many chief financial officers, chief executive officers and presidents of corporations come from accounting backgrounds. Whether you aspire to such heights is entirely up to you.
According to a UK online recruitment agency (reed.co.uk), more than 70% of managing directors in the UK’s top 100 companies are qualified accountants. And most accountants start off as auditors. So, you can expect your career path from an auditor to be an exciting one, leading to an almost limitless range of possibilities.
The early years may be tough, but as you trudge your way through seemingly endless rounds of audit, you will accumulate so much knowledge and skills that, eventually, many doors will open to you.
Broadly speaking, if you’re an internal auditor, you will oversee the processes and controls of every department in your organisation and will have such a deep understanding of the overall business that you could work your way into a number of senior positions within the top hierarchy without too much difficulty.
In a chartered accountants firm, the best and most dedicated of junior audit team members (read: those who put in the years) will eventually stand a chance of becoming partners of the firm. On the way, they are likely to specialise in one of the many different areas of accounting: from the more traditional areas of audit, tax, business advisory and corporate finance to newer (and hotter) areas such as environmental auditing, forensic accounting, and risk management in financial, operations and IT systems.
Financial accountants prepare financial statements based on general ledgers and participate in important financial decisions, especially those concerning mergers and acquisitions as well as long-term financial projections. The scope of work requires a solid understanding of both accounting and finance.
Management accountants concern themselves mainly with decisions about capital budgeting and business analysis.
Their major functions include cost analysis, analysis of new contracts (to ensure their profitability) and the efficient management of company assets.
The preparation of corporate and personal income tax statements and the formulation of taxation strategies is the work of tax consultants. Tax consultants have to look into all financial choices available when formulating tax strategies. They are the ones consulted on how best to treat a merger or acquisition for taxation purposes, for example.
Tax consulting requires individuals who have a thorough understanding of business, regulations and the tax codes of different countries.
Then there are accountants who specialise in insolvency work with organisations facing bankruptcy.
Accountants who branch into corporate finance, meanwhile, are mainly involved in the listing exercises, mergers and acquisitions, and project financing.
But the real rising “stars” in accounting today, the ones who are changing the general public’s perception of what an accountant is, are those involved in the new and exciting areas such as the environment, fraud, IT, e-commerce and the knowledge industry.
An increasing number of companies are taking more interest in environmental concerns and are seeking ways to be profitable while also preserving the natural ecosystem.
As such, they need accountants who specialise in environmental issues to advise them on the most cost-effective way to go about their environmental-friendly business.
At the other end of the spectrum, there remain those in the corporate world who are interested in maximising their own profit, and are happy to break the rules to do so but not if forensic accountants can help it. These accountants specialise in fraud, embezzlement and all other types of sophisticated white-collar crime. Even the FBI employs the services of these very “glamorous” accountants to help with their investigations.
Another growing area in which the services of an accountant are becoming highly sought after is in IT. Businesses today are becoming more complex and the use of IT for financial purposes and to automate operations is imperative to remain competitive. As activities become more computerised, there is a need to integrate IT with business processes to ensure an effective and efficient value chain.
That’s where accountants highly proficient in IT come in. They help to design, integrate and implement advanced software that will fulfil the clients’ requirements while safeguarding their interests. IT consultants are also becoming integral to e-commerce. In addition, information integrity is critical and accountants especially from an audit perspective would be highly valued in ensuring the integrity of business information.
And if you are interested in travelling, a good way to do so while earning money in the process is to specialise in international accounting. This niche has sprouted as a direct consequence of falling trade barriers, thus opening more avenues for global trade. Companies that seek to take advantage of this by expanding across borders need to have a consultant advising them on the relevant international and trading laws, as well as tax structures in partner countries. In other words, they need an international accountant.
Finally, there’s even a scope for accountants to enter the glitzy world of entertainment and sports, as personal consultants to celebrities who don’t have the time or necessary skills to manage their personal wealth. A growing number of movie stars, athletes and artists use the services of an accountant to help them invest and subsequently look after their portfolios, file their tax returns, and perform all the nitty-gritty tasks of managing their multi-million dollar estates. This certainly opens doors to the lives of the rich, famous and glamorous!
So as you can see, there is a jungle of opportunities open to you once you decide to become an accountant and, it is for you to decide which path you wish to take to create a personally rewarding and fulfilling career.