Who is an Accountant?
An accountant is a finance professional who is responsible for recording business transactions on behalf of a firm, reporting the firm’s performance to the senior management, and issuing financial statements. An accountant plays an important role in a company, irrespective of whether it is a small domestic entity or a large multinational company. An accountant closely scrutinizes the cash inflow and outflow of a company to ensure that all the transactions are legally correct and that they have processed through the proper channel. Typically, they start their career as entry-level accountants and then gradually grow with more responsibility to become managers or even partners in their firm.
Accountants employ their skills in accounting, finance, law, and math to deal with accounting numbers and financial statementsFinancial StatementsFinancial statements are written reports prepared by a company's management to present the company's financial affairs over a given period (quarter, six monthly or yearly). These statements, which include the Balance Sheet, Income Statement, Cash Flows, and Shareholders Equity Statement, must be prepared in accordance with prescribed and standardized accounting standards to ensure uniformity in reporting at all levels. to analyze the financial health of an individual or a company. As such, they are required to handle numerous responsibilities. Some of their major duties and responsibilities are mentioned below.
- They analyze the company’s business transactionsBusiness TransactionsA business transaction is the exchange of goods or services for cash with third parties (such as customers, vendors, etc.). The goods involved have monetary and tangible economic value, which may be recorded and presented in the company's financial statements. and present that in a detailed manner to the management so that they are fully aware of the company’s performance.
- They assist the auditorsAuditorsAn auditor is a professional appointed by an enterprise for an independent analysis of their accounting records and financial statements. An auditor issues a report about the accuracy and reliability of financial statements based on the country's local operating laws. during the process of an audit by providing them with all the relevant company information with necessary facts and figures.
- They keep track of the expenses and review actual vis-à-vis budgeted expenditure at regular intervals to ensure that the expenditures are within acceptable limits and that the company’s reserve is not depleted due to excessive spending.
- They meticulously supervise the inputting of financial data into the ERP systems because any slight deviation in the imputed data from the original one can put the entire financial status of the company at risk.
- They are responsible for identifying and recommending secure and efficient accounting software, which is used to gather and protect the company’s financial data.
Education & Certification
Although the minimum education that is required to become an accountant is an undergraduate degree, most accountants also pursue post-graduation degrees and certifications to enhance their employability.
- Education: The incumbent must possess a bachelor’s degree in the field of finance, accounting, or another related discipline. In fact, some employers prefer candidates with a master’s degree in taxation or accounting or an MBA in finance.
- Certification: An accountant has to be a certified public accountant (CPA) if they are involved in filing documents with the U.S. Securities and Exchange Commission (SEC). There are various other certifications available that accountants usually pursue to stay ahead of the competition in the job market. These certifications reflect the professional competence of the incumbent in a specialized field.
Typically, the growth of employment opportunities for accountants is closely correlated to the overall economic health of a nation. Hence, more and more accounting jobs are created as the economy grows. The employment opportunities for accountants in the US is expected to grow from 1,436,100 in 2019 to 1,497,900 in 2029, at a healthy CAGR of 4%.
The salary is dependent on various factors, such as level of education, specialization, and certification. Nevertheless, it is a fact that accountants, on average, are paid well given their field of expertise and its requirement in the business world. As per the U.S. Bureau of Labor Statistics, the median salary of accountants in the US was $71,550 in May 2019, with the bottom 10% earning less than $44,480 while the top 10% earning more than $124,450. Further, the salary varies across industries, and the industries that offer salary more than the overall median include finance and insurance ($76,440), Management of companies and enterprises ($74,060), and accounting, tax preparation, bookkeepingBookkeepingBookkeeping is the day to day recording of financial transactions such as purchases, sales, receipts, and payments, and it is the first step in the accounting process. It can be prepared in two ways: single-entry and double-entry; however, the double-entry approach is more widely used and recognized in most countries., and payroll services ($71,390).
Workplace of Accountant
There is no specific requirement for the workplace of an accountant. A big multinational company usually has a dedicated accounting department that has a large number of accountants. At the same time, a small firm may operate with only one accountant who has reported to a regional head. Most of these are required to work from offices, but some companies offer the flexibility to work from home. In some cases, they have to travel frequently to client workplaces.
They are required to work for 40 hours per week, while there are some profiles where the working hours are relatively longer. On the other hand, during certain times of the year, the workload may require the accountant to put it more hours, such as during tax season before the filing deadline or at the time of the budget.
Importance of Accountant
The role of accounts witnessed significant growth during the time of the industrial revolution. The professional growth happened because businesses were becoming more complex, and the stakeholders started to ask more questions as they wanted to know about the financial status of the companies in which they had invested. After the Great Depression of 1929 in the US, the Securities and Exchange Commission (SEC) was formed, and all publicly traded companiesPublicly Traded CompaniesPublicly Traded Companies, also called Publicly Listed Companies, are the Companies which list their shares on the public stock exchange allowing the trading of shares to the common public. It means that anybody can sell or buy these companies’ shares from the open market. were mandated to publish reports prepared by qualified accountants. This regulatory change further increased the need for accountants in the corporate set-up. Over the period, they have become a ubiquitous and vital part of any business.
This has been a guide to Accountant and its definition. Here we discuss the education, certification, responsibilities, and job outlook of an accountant along with its salary and importance. You may also have a look at these articles below to learn more about Finance –