In simple terms, the role of the accountant is to present financial information to interested people, so that these people can use that information when they are making business decisions.
Types of Accountants
There are a number of areas that accountants choose to specialise in, but there is one key differentiating factor that any particular accountant will have to decide on: will they be employed by and work within one particular firm, helping them with their financial needs, or will they work externally for a specialist accounting firm, providing services for a number of clients. Here are some of the careers in accounting:
Management accountants co-ordinate the flow of financial information within the business, and in the process assist that firm’s management in their financial decision-making.
Cost Accounting is a key sub-branch of this is Management Accounting. Cost accountants concentrate on working out the exact costs of production, and use this knowledge to help management control their costs. For example, the cost accountants at McDonalds would know the exact cost to produce each burger, down to the precise cost of the lettuce used. McDonalds would use this knowledge every time they planned to introduce a new burger to the market, and it would also help them formulate the selling prices.
Probably the best known area of accounting. This involves the preparation, analysis and interpretation of financial information to help businesses with decision-making. At a simple level this means the writing up of the year’s set of accounts to determine a business’ profit or loss. A financial accountant’s more complex work comes when he or she has to take these accounts and make sense of them for the business owners, giving them practical and useful advice, as to how they can improve their business practices.
Taxation Accouting is the specialist work done where tax calculations and returns are prepared, as well as important tax advice being given to individuals and businesses.
Auditing involves checking financial records and accounting procedures to ensure that reports have been prepared honestly and meet legal requirements. Auditors are generally specialist external accountants, independent of the account creation. Some larger firms employ internal auditors, to ensure that they have good systems in place that are being properly followed.
What are CAs and CPAs?
Chartered Accountants (CAs) and Certified Practicing Accountants (CPA) are accountants who have met strict educational and experience requirements that belong to one of the main professional associations and abide by their rules. They sell their accounting services (usually financial accounting, taxation and auditing) to the public. These are the accountants that are most visible to people. All of the partners or directors of the large well-known accounting businesses, as well as most of their senior staff, will have qualified to become a CA or CPA. Their junior staff will be working through the experience requirements to become members.
The main difference between CAs and CPAs is which professional association they have qualified through. There are three main professional associations for accountants in Australia. Most accounting students who are in firms dealing externally with the public will work towards gaining membership to one of these. They are the Institute of Chartered Accountants in Australia, CPA Australia, and the Institute of Public Accountants.
All three organisations aim to ensure that their members are well qualified, knowledgeable and up-to-date. They all suggest academic pathways that accounting students can follow, as well as experience that they require their members to have. They all offer continuing education for their members. There is also a disciplinary process in place, so that the public can be sure that their members’ activities are regulated and monitored.
Educational Pathways to Become an Accountant
There is work available in businesses for those with Certificates and Diplomas of Accounting, mainly as accounting technicians, who focus more on preparing the actual accounting records, rather than analysing financial information and providing advice helpful for decision-making.
Although each of the professional associations have slightly different educational requirements, there is a general pathway that those wishing to become a CA or CPA should follow.
Ideally in high school students should study accounting, business, economics, English and maths in their senior years.
A common way to gain full CA or CPA status is to obtain an accredited Bachelor’s or Master’s degree majoring in Accounting. The exact degree studied for will vary depending on the educational organisation that it is studied at, but common names include Bachelor of Commerce, Bachelor of Accounting, Bachelor of Business Administration, Bachelor of Economics, Bachelor of Finance, and Bachelor of Business.
The professional bodies list specific papers that should be studied, and these are itemised for every educational organisation in Australia.
It is also possible to be accepted into one of these professional bodies through alternative means, including people who have recognised non-Accounting undergraduate degrees, associate degrees of accounting at TAFEs and colleges, as well as those with overseas qualifications. Check with the specific association for their exact requirements.