In a nutshell: An accounting degree opens the door for exciting opportunities in forensic accounting, business valuation, managerial accounting and financial accounting.
Times change. Technology continues to advance. Businesses have moved to data analytics to make important decisions on everything from marketing to capital investments.
Through it all, one career continues to flourish: accounting.
More than 1.3 million people work in the accounting field, according to the U.S. Bureau of Labor Statistics. That number is expected to grow 11 percent by 2024, with an additional 142,000 people joining the ranks of accountants.
Accountants made a median annual salary of $68,150 in May 2016, according to the BLS. The top 10 percent earned almost $121,000,
But the attraction of accounting goes beyond just stability, salary and job growth. Accounting also offers a variety of different career paths to follow. The wealth of career choices applies both to students learning to become accountants and working accountants looking to change their career focus.
Here is a look at four different career paths within the accounting field.
All of these areas require a bachelor’s degree, status as a Certified Public Accountant, expert-level knowledge of Generally Accepted Accounting Principles (GAAP) and, in most cases, a few years of experience. Other needed certifications are noted in each category.
Those who go into forensic accounting combine accounting expertise with the investigative skills of a detective. The need for such a skill set is enormous. The average company loses 5 percent of revenue each year to fraud, according to a 2016 study from the Association of Certified Fraud Examiners. The study found the total loss of revenue reached $6.3 billion worldwide.
Forensic accountants typically gain experience as a general accountant for several years before making the move into a forensics department. They are employed in a variety of organizations. Those include certified public accountant businesses, government departments, insurance companies and law enforcement agencies.
Those wishing to go into forensic accounting can also benefit from education in law enforcement. They require familiarity with a number of financial-related crimes. These include white collar crime, insurance fraud, money laundering schemes, contract violations and securities fraud. Most also earn designation as a Certified Fraud Examiner.
Savvy accounting firms have increasingly moved into business valuation in recent years. As the United States population ages, more people require an accountant to properly value assets to aid with estate planning, wills and transfer of businesses to family members. All this requires an accountant familiar with evaluating businesses, assets and the pertinent tax codes.
Business valuation also plays a critical role in valuing assets for larger organizations, particularly during a merger or acquisition. Business valuation accountants must have expert-level knowledge in assigning value to sometimes hard-to-define assets. They also need expertise in interpreting financial statements, cash flow models and determining the sale value of a company.
Most accountants specializing in business valuation also have years of experience as a general accountant. Many also seek certification from agencies such as the American Society of Appraisers and the National Association of Certified Valuation Analysts.
Accountants who specialize in managerial accounting work with top executives and focus on extracting actionable information from an organization’s finances. They provide information on both past financial activities as well as models to project future profits and expenditures.
Much of their focus typically is on modeling financial projections based on strategies under consideration by top management at an existing company or an entrepreneur starting a new business. For example, managerial accountants provide information that helps business leaders decide what to sell, how much inventory to keep on hand and the proper price point for a product or service.
Those who enter the field typically obtain Certified Managerial Accountant designation. Equally as important is in-depth knowledge of how a business functions and the overall market conditions of an industry. They also need an understanding of the decision-making process underpinning capital investment, structure of operations and risk assessment.
Soft skills also are important in this area. Because they work with executives who are typically outside the accounting field, managerial accountants need to excel at communications and clear, concise methods of reporting findings.
This area involves work that is most often associated with the accounting profession. Unlike a managerial accountant, who works internally with executives in the decision-making process, financial accountants prepare public reports on a business’ activities.
These include the four major financial statements: cash flow, balance sheets, statements of retained earnings and income statements. For publicly held companies, these reports are filed with the Securities and Exchange Commission and made public.
Expertise in tax codes and government regulations is a must. Financial accountants must also have skills in the different reporting strategies (accrual method and cash method) and, if a company does global business, with International Financial Reporting Standards.
All four of these areas provide a potentially stable and lucrative career path for accountants.
No matter how much technological advances are brought into play in business, cash flow and money management remain the life blood of any organization. That simple fact means accountants will always be needed. And those who specialize in important areas may well find themselves in demand.