Public vs. Private Accounting

The accounting field holds the potential for good pay, comes with a range of career options and solid prospects for job growth. In fact, accountant ranked No. 6 in U.S. News & World Report’s 2017 review of the Best Business Jobs and No. 39 among The 100 Best Jobs.

Accountants generally are responsible for:

  • Ensuring financial statements are accurate and comply with laws and regulations
  • Inspecting account books and various accounting systems for efficiency and compliance with accepted accounting procedures
  • Organizing and maintaining all financial records

When starting an accounting career, there are two major career paths: public or private. Accountants in both fields perform similar work.

The Dollars Have to Make Sense

Regardless of whether working as a public or as a private accountant, the U.S. Bureau of Labor Statistics (BLS) said an accountant’s median salary in 2016 was $68,150 per year.

The National Association of Colleges and Employers’ Job Outlook 2017 Spring Update cited accounting as one of the top in-demand majors for new college graduates, with 57.1% of employers reporting plans to hire accounting graduates.

Now that you know what type of salary accounting jobs may command, here are some of the places you might find yourself working:

  • Accounting department – Many businesses have an accounting department with a plethora of different positions for a budding accountant. Experience and proficiency will determine how far up the ladder you go. Some of the positions you’ll encounter in these departments include: accounting clerk, auditor, accounting manager or budget analyst.
  • Tax firms – Tax firms handle tax issues for everyone from small businesses to personal taxes. An entry level position with a tax firm may include a position as a tax accounting clerk.
  • Accounting firms – Professionals in this field perform a broad range of accounting, auditing, tax and consulting tasks for their clients which include corporations, governments and individuals, according to the BLS.
  • Government – Accountants for local, state or the federal government maintain and examine the records of government agencies and audit private businesses and individuals whose activities are subject to government regulations or taxation.

Public Accounting and Private Accounting

Public accountants are responsible for a range of accounting duties from auditing to consulting tasks. They typically work for private companies with corporate or individual clients. Some have their own firms. Occasionally they may work with governments.

Public accountants deal with documents clients have to disclose by law such as tax forms and balance sheet statements. There are legal requirements demanding the availability of these documents because potential investors need to know what’s going on behind the scenes when deciding whether to do business with or invest in a company. Companies that are publicly traded need CPAs to sign documents they submit to the Securities and Exchange Commission.

Private accountants, also known as management, cost, industrial and corporate accountants, usually work internally for a company or corporation.

They record and analyze their company’s financial documents and information. The information they compile is for internal use by company business managers, rather than for anyone outside the corporation looking to invest in the company.

Budgets, performance evaluation and forecasting are among the primary responsibilities of private accountants. Private accountants usually work with financial managers and much of their job involves reviewing things like stocks, bonds and other sources of financial investments.

The differences between private and public accounting are subtle. It all depends on your personal interests and what you aim to accomplish with your degree in accounting.

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