There are so many different career options for accountants, bookkeepers, and CPAs that many students have a difficult time deciding where they want to focus their careers. The most obvious and well-known option for accountants is public accounting. Although this area of accounting might sound intriguing, it’s not for everyone.
In this article, we’ll discuss what you can expect from a career in public accounting along with how you can determine if it’s right for you.
What is Public Accounting?
Public accounting involves providing accounting and financial services publicly traded or privately owned companies. The reason it is called public accounting is because the CPA firm providing the services is an outside entity from the company purchasing the services. Compare this to private accounting where the accountants are employed and work for the company itself as internal employees.
Public firms typically provide services that include tax, consulting, auditing, and advisory services, among others. Each of these different services provides a unique career path with different opportunities for anyone starting a career in public accounting.
Tax accountants are responsible for performing any number of compliance related activities. They prepare individual and corporate income tax returns, deal with complex inter-state and international tax issues, and advise clients on tax saving business formation strategies.
Consultants and financial advisors aid companies in decision-making processes that involve operations, efficiencies, and investments.
Auditors perform inspections of companies’ assets and internal reports to validate their accuracy. Since they must physically be at the clients’ business to perform the audits, auditors tend to do a lot of traveling. This can be a big perk.
Now that we know what public accounting is, let’s talk about some of the pros and cons to see if this is an area where you would like to focus your career.
One of the biggest benefits of starting a career in public accounting is the vast amount and variety of opportunities. Unlike other professions that are pigeon holed into a single job description, accountants can fill many different roles.
Like we talked about before, there are four distinct career paths that you can take: tax, audit, assurance, and consulting. There is also some degree of flexibility between these different paths as well. For instance, if you started your career as an auditor, you could switch to a tax accountant down the road if you got tired it.
This type of flexibility and range of opportunity doesn’t exist in other professions or private accounting for that matter.
In Demand Employment
Public accountants are in demand and will continue to be needed more and more in the future. The increased government regulation, more complex business environments, and international financial markets necessitate the need for public accounting more now than ever before in history.
The Bureau of Labor and Statistics estimates that public accountant and auditor jobs will grow another 11 percent in the next ten years. That type of job growth is rarely seen outside of medical and tech careers. Needless to say, if you go into public accounting, you will never have a problem finding employment.
This point is both a benefit and a drawback of public accounting. It’s pretty much expected that all accountants in the public industry become certified.
That is, they are almost required to become certified public accountants. I think this is a major benefit for the profession because it restricts the amount of people who are qualified to perform the work. The restricted supply of qualified workers increases the demand and consequently increase the pay and salary for accountants.
On the flip side, if you want to move up the corporate ladder in the public accounting world, you will have to get your CPA license. This isn’t an option. If you don’t get it within a few years of being hired, you will face a promotion and pay ceiling that you won’t be able to break through without your license.
My advice would be to use one of the many training courses available to study for the CPA exam and get it out of the way. It’s a difficult exam, but it’s not impossible. You’ll be happy you did it in the long run.
Long gone are the days where CPAs sat in windowless conference rooms staring at stacks of papers and reports. This stereotype still plagues the profession, but it is unwarranted. Today’s public accountants are hands-on and interact with clients on a daily basis. Communication skills are paramount.
As such, CPAs are often required to travel to their clients’ businesses to perform audits, discuss operational advice, and collect documents. In fact, it’s not uncommon for public auditors to work more on the road than in their own offices.
Bigger public firms also have branches worldwide. It’s not uncommon for individuals to request transfers to different countries for a year or two. For instance, if you have always wanted to travel Europe, you could transfer to the London EY office for a few years. Seeing the world is a real possibility in public accounting.
No matter which career path you take in public, you will always have a busy season. The most notable is tax season. Tax accountants can work 70-90 hours per week during tax season. Unfortunately, there is no way around this. This is one of the major drawbacks in the profession.
To combat this, many firms offer generous vacation policies outside of their busy seasons for accountants to regroup and recoup.
Is This The Right Career For You?
We’ve discussed several benefits of starting your career in public accounting and a few drawbacks as well. This brings us to the question, is it right for you?
Public accounting offers so many opportunities to start and grow your career, but it’s not without its drawbacks. Licensing requirements and long hours during busy seasons can drag you down.
I think the important thing to remember is that if you start your career in public accounting, you aren’t stuck there. You can always take the experience you gained and switch to private accounting if you want to.
That being said, I would recommend anyone who is serious about starting a career in accounting to look into public accounting. You will gain experience, respect, and a lot of opportunities if you do.