The finance industry has great careers that are some of the most engaging, stimulating, and profitable out there. Anyone thinking about going into this field has great choices to pick from and is sure to work at a job that will keep him/her constantly challenged. As careers, accounting and financial analysis are sought after by ambitious men and women and related fields of study are finance, accounting, economics, and business administration, among others.
Among other duties, accountants analyze and communicate financial information for various entities or individuals. As for financial analysts, their duties include assessing the performance of stocks, bonds, commodities, and other types of investments; and providing guidance to businesses and individuals making investment decisions.
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Becoming an Accountant
According to the United States Department of Labor (USDL), accountants help to ensure that firms are run efficiently, public records are kept accurately, and taxes are paid on time and properly. They analyze and communicate financial information for companies, individual clients, and Federal, State, and local governments. In the USDL’s Occupational Handbook 2010–2011 Edition, the Bureau of Labor Statistics states that “…many accountants also offer budget analysis, financial and investment planning, information technology consulting, and limited legal services.”
The majority of positions for accountants require at least a bachelor’s degree in accounting or a related field. Some colleges and universities currently offer programs to prepare students for work in specialty professions, like internal auditing. Sometimes employers prefer job seekers with a master’s degree in accounting or in business administration with a concentration in accounting.
Accountants will experience a much faster than average employment growth through 2018. Job opportunities should be favorable and accountants who have professional certifications, especially CPA’s, have the best prospects. The USDL also states: “Employment of accountants and auditors is expected to grow by 22 percent between 2008 and 2018, which is much faster than average for all occupations. This occupation will have a very large number of new jobs arise, about 279,400 over the projections decade.”
Becoming a Financial Analyst
According to Investopedia, a financial analyst researches macroeconomic and microeconomic conditions and other company fundamentals to make the appropriate recommendations. They also recommend a course of action, like buying or selling a company’s stock based in its overall current predicted strength. The site states that “An analyst must be aware of current development in the field in which he or she specializes as well as preparing financial models to predict future economic conditions for any number of variables.”
Most companies require at least a bachelor’s degree in a related field such as finance, business, accounting or economics in order to work as a financial analyst. There are other majors that are looked upon favorably like computer sciences, biology, physics, and even engineering. Some positions, however, will require a master’s degree in finance or a Master of Business Administration (MBA). Additional licenses and certifications for specific positions may be required as well.
Employment of financial analysts is expected to grow much faster than average for all occupations. According to the USDL “…As the level of investment increases, overall employment of financial analysts is expected to increase by 20 percent during the 2008–2018 decade, which is much faster than the average for all occupations.”
The Best Careers in Finance
Accountants and financial analysts are just two of the very lucrative careers to choose from in the dynamic field of finance. The duties of an accountant include working on strategies for mergers and acquisitions, and doing quality management, among others. Financial analysts, on the other hand, provide guidance to businesses and individuals making investment decisions.
These professionals work for banks and other financial institutions. There is competition for positions available, but even in the current economy; there are jobs available, especially in the big cities. According to the United States Department of Labor, both careers are in great demand and there is a good job outlook for them in the coming years.
Management and Public Accounting
When individuals think of the word accountant, the acronym CPA comes to mind as well. However, management accountants, although less recognized and understood, contribute at least as much to the working of businesses today as public accountants. There are similarities and differences between these two closely related professions and they are both necessary in our current system of business. They also both follow codes of ethics that are increasingly important in the post-SOX (Sarbanes-Oxley) business world we live in today.
Public Accounting
Public accounting is involved in the preparation, auditing, and presentation of financial statements. The most common financial statements include the balance sheet, the income statement, and the statement of cash flows. The balance sheet lists an entity’s assets, liabilities, and owners equity accounts and is a snapshot of a certain date. As its name suggests, the balance sheet is essentially an equation that must balance. Assets = liabilities + owners equity. The income statement presents a time period and lists the entity’s revenues and expenses. The statement of cash flows shows how much of an entity’s cash was received and spent in operating, investing, and financing activities. This is perhaps the most important financial statement because it shows that an entity has (or does not have) enough cash to pay its creditors. It also shows where the cash is coming from and if this cash source is likely to be available in the future.
Essentially, public (or financial) accounting is concerned with (as its name suggests) the public. Financial accountants concern themselves with the objectivity, conservativeness, and transparency of information. The main users of financial accounting reports and information are external. Examples of external users include investors (current and potential), creditors, stockholders, and potential employees.
Managerial Accounting
Managerial accounting is also concerned with reports, but less with historical reports that are prepared by financial accountants. Managerial accountants are likely to be involved in preparing budgets, investment appraisals, costing reports, and modeling. To prepare many of the reports necessary for management to make effective daily decisions, managerial accountants must not only review historical data, but also conduct research and use databases to predict future costs and revenues. Management accountants should also have a good understanding of finance implications. Managerial accounting reports and information is used internally by management. In most companies, few (if any) of these reports are ever seen by external parties.
Aside from the traditional budgets and costing reports management accountants are known for, management and modeling have become increasingly important job functions for management accountants, as have business planning and financial analysis. Also, ethics have become increasingly important to management accountants as the awareness of ethics (and the lack thereof) in business today has become a hot topic. The Institute of Management Accountants (IMA) is the leading organization for management accountants. They offer the Certified Management Accountant (CMA) designation which is comparable to the Certified Public Accountant (CPA) designation for financial accountants.
In Brief
Although financial and managerial accounting are similar in many ways, their purposes and areas of concentration are, much of the time, very different. Financial accounting is primarily concerned with communicating historical, objective, transparent information to external users. Managerial accountants concern themselves with communicating future-oriented information and analyses to internal users. However, both of these professions focus on ensuring the information they communicate is accurate, relevant, and ethically applied.
