Public vs Private Accounting

Difference Between Public and Private Accounting

The key difference between Public and Private Accounting is that Public accounting is the accounting of financial documents which is required to be disclosed to the public by the individual or corporation whereas Private accounting is the accounting of financial information of the company in which the accountant is employed generally for the internal manager.

The biggest question that arises when you complete your graduation and are looking for career options to pursue. Now, if you intend to pursue a career in the field of accounting, then the decision may come down to the choice between public and private accounting.

The decision may be driven by a few factors (not exhaustive), which include the expectation of the type of work, one’s personality traits, and career goals. This article is an attempt to provide an insight into both types of accounting careers, which will help one to determine which career path is the best for your future.

What is Public Accounting?

Public accounting is the type of accounting where an accountant works acts as an independent third party with a variety of client companies to examine the financial statements that a company is required to disclose to the public. The public accountant also supports the preparation of the financial statements to ensure fair representation of the results, financial position, and cash flowsCash FlowsCash Flow is the amount of cash or cash equivalent generated & consumed by a Company over a given period. It proves to be a prerequisite for analyzing the business’s strength, profitability, & scope for betterment. read more of the client companies.

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What is Private Accounting?

Private accounting, on the other hand, is the type of accountingType Of AccountingThere are different types of the accounting which an organization can follow as per the scope of its work and need of stakeholders. Some of them include financial accounting, forensic accounting, accounting information system, managerial accounting, taxation, auditing, cost accounting, etc.read more where an accountant is employed by a company to act as an internal manager and prepare and analyze its financial statement.

Public vs. Private Accounting Infographics

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Key Differences

Public vs. Private Accounting Comparative Table

Basis for ComparisonPublic AccountingPrivate Accounting
TrainingTrained in the analysis of accounting systemsAccounting SystemsAccounting systems are used by organizations to record financial information such as income, expenses, and other accounting activities. They serve as a key tool for monitoring and tracking the company's performance and ensuring the smooth operation of the firm.read moreAccounting systems are used by organizations to record financial information such as income, expenses, and other accounting activities. They serve as a key tool for monitoring and tracking the company's performance and ensuring the smooth operation of the firm.read moreAccounting systems are used by organizations to record financial information such as income, expenses, and other accounting activities. They serve as a key tool for monitoring and tracking the company's performance and ensuring the smooth operation of the firm.read more and validation of financial disclosuresExpert in the recording of accounting transactionsRecording Of Accounting TransactionsAccounting Transactions are business activities which have a direct monetary effect on the finances of a Company. For example, Apple representing nearly $200 billion in cash & cash equivalents in its balance sheet is an accounting transaction. read moreAccounting Transactions are business activities which have a direct monetary effect on the finances of a Company. For example, Apple representing nearly $200 billion in cash & cash equivalents in its balance sheet is an accounting transaction. read moreAccounting Transactions are business activities which have a direct monetary effect on the finances of a Company. For example, Apple representing nearly $200 billion in cash & cash equivalents in its balance sheet is an accounting transaction. read more which eventually forms financial statements
TrainingMay be exposed to a plethora of industries given the nature of work.Limited knowledge about industries other than the one they work in
Educational QualificationMust be a certified CPANot compulsory to be a certified CPA; but is an added advantage.
Travel RequirementMay be required to travel to the site of the client location.Usually fixed work location with no travel.
Client ProfileA significant number of companiesIndividual company for which they work
Work EnvironmentMay be required to work for long hours to meet tight deadlines.Relatively stable and regular work hours
Character TraitsMust be comfortable to interview clientsMust be comfortable to query other departments of the same company

Final Thoughts

As can be seen from the above explanations that both categories of accounting are very different in nature and serve important roles in the assessment of a company’s financial statement in their own unique ways; Both public and private accounting involves more or less similar kind of job activities, skills, and education.

However, the distinctions can be seen in the skill developed after the fresh graduates join in either career path. In simple words, public accounting and private accounting can be seen as “external” accountants and “internal” accountants of a company, respectively. As such, it is important to understand the various facets of the two in the pursuit of either career options. I hope the article helps you to decipher the two cost categories.

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