Term Paper: Certified Public Accountants (Cpas) Are Found

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Certified Public Accountants (CPAs) are found in many walks of life. They are the well-paid and often highly publicized (albeit sometimes for the wrong reasons) Chief Financial Officers (CFOs) of major corporations and advisors to smaller neighborhood businesses (CPA.net., 2004). They work for both large and small public accounting firms, and are typically well-respected strategic business advisors and decision-makers. CPAs also act as business consultants on many issues, including taxes and accounting.

Public accountants perform a variety of accounting, auditing, tax, and consulting activities for their clients, who include corporations, governments, nonprofit organizations, or individuals (U.S. Department of Labor Bureau of Labor Statistics, 2004). For instance, some CPAs concentrate on tax matters, such as helping companies understand the tax advantages and disadvantages of their business decisions and preparing individual income tax returns. Others serve as consultants in areas such as compensation or employee healthcare benefits, the development of accounting and data processing systems, and the selection of controls to protect assets. Others may audit clients' financial statements and report to investors and authorities that the statements have been properly prepared and reported. CPAs' usually either have their own businesses or work for public accounting firms.

REQUIREMENTS

There are numerous requirements involved in becoming a CPA (CPA.net., 2004). CPAs must meet the requirements of the state or jurisdiction in which they wish to practice. These requirements, which are different in various states, are established by law and administered by the state boards of accountancy.

As a general rule of thumb, CPAs must complete the following to qualify for certifications (CPA.net., 2004):

Complete a program of study in accounting at a college/university (the AICPA recommends at least 150 semester hours of college to study to obtain the common body of knowledge for becoming a CPA);

Pass the Uniform CPA Examination, which is developed and graded by the AICPA, and;

Have a certain amount of professional work experience in public accounting (not all states require this).

All states use the four-part Uniform CPA Examination prepared by the AICPA (U.S. Department of Labor Bureau of Labor Statistics, 2004). The 2-day CPA examination is rigorous, and only about one-quarter of those who take it each year passes every part they attempt.

After one completed these qualifications, most states require specified amounts of continuing professional education courses annually to retain a professional license to practice.

SALARY

In 2002, the median wage and salary annual earnings of accountants and auditors were $47,000. The average salary fell between $37,210 and $61,630 (U.S. Department of Labor Bureau of Labor Statistics, 2004). The top 10% of accountants and auditors earned more than $82,730, and the bottom 10% earned less than $30,320. In 2002, median annual earnings in the industries employing the largest numbers of accountants and auditors were (U.S. Department of Labor Bureau of Labor Statistics, 2004):

Federal Government

Accounting, tax preparation, bookkeeping, and payroll services

Management of companies and enterprises

Local government

State government

EDUCATION

In this industry, education matters. According to a salary survey by the National Association of Colleges and Employers, bachelor's degree candidates in accounting received offers averaging $40,647 a year in 2003; master's degree candidates in accounting were offered $42,241 (U.S. Department of Labor Bureau of Labor Statistics, 2004).

As I plan to transfer to a school in the New England region to complete my accounting degree and pursue a master's degree, I have researched a variety of schools in the area. I am interested in the following schools (CPA.net., 2004)

Babson College: Private college in Wellesley, MA. Offers BS and MBA.

Boston University: Private university in Boston, MA. Offers BSBA, MBA, aand DBA.

Merrimack College: Private College in North Andover, MA. Offers BSBA.

Northeastern University. Private university in Boston, MA. Offers BSBA, MS, and MBA.

University of New Hampshire: Public university in Durham, NH. Offers BSBA and MBA.

Plymouth State College. Public college in Playmouth, NH. Offers BS and MBA.

Management Elements of Accounting

The six fields of study recognized by the Board of Certified Public Accountant Examiners are accounting and auditing, consulting services, management, personal development, specialized knowledge and applications, and taxation (North Carolina Administrative Code, 2004). Of these, I am especially interested in the management field, as it seems to be the most challenging and rewarding.

This field deals with the management needs of individuals mainly in public practice, industry, and government (North Carolina Administrative Code, 2004). Some areas focus on the practice management area of the public practitioner, including organizational structures, marketing services, human resource management, and administrative practices. For CPAs in this field, there are subjects dealing with the financial management of the organization, including information systems, budgeting, and asset management, as well as items covering management planning, buying and selling businesses, contracting for goods and services, and foreign operations.

Management is an important aspect of accounting (U.S. Department of Labor Bureau of Labor Statistics, 2004). Management accountants record and analyze the financial data of the companies for which they work. They are also responsible for planning, budgeting, performance evaluation, cost management, and asset management. Often, management accountants are part of executive teams that provide strategic planning or new-product development for companies. They analyze and interpret the financial data that businesses need to make sound business decisions.

JOB OUTLOOK

Like just about every industry today, computers and technology are changing the nature of the work for accountants (U.S. Department of Labor Bureau of Labor Statistics, 2004). Now there are special software packages that allow accountants to summarize transactions in standard formats for financial records and organize data in special formats for financial analysis. These accounting packages have cut down the amount of tedious manual work associated with data management and record keeping, which are tasks that have discouraged potential accountants in the past. Computers allow accountants and auditors to enjoy mobility and to use their clients' computer systems to get data from company databases and the Internet.

As a result, an increasing number of accountants and auditors with solid computer skills specialize in correcting problems with software or in developing software to meet special data management and analytical needs (U.S. Department of Labor Bureau of Labor Statistics, 2004). Accountants can also perform more technical duties, such as implementing, controlling, and auditing systems and networks, and developing technology plans and budgets. For these reasons, the job outlook of accountants is positive, as new and innovative areas of the field are opening up.

Accountants and auditors held approximately 1.1 million jobs in 2002 (U.S. Department of Labor Bureau of Labor Statistics, 2004). These accountants were employees throughout private industry and government, but 1 out of 5 wage and salary accountants worked for accounting, tax preparation, bookkeeping, and payroll services companies. An estimated one in ten accountants or auditors was self-employed.

A lot of accountants and auditors are unlicensed management accountants, internal auditors, or government accountants and auditors; however, the majority are licensed CPAs. Perhaps the reason for this is financially oriented. As CPAs deal primarily with money, it is no surprise that they go where the money is. And studies show that CPAs earn an average of 20% more than uncertified accountants.

Some employers prefer applicants with a master's degree in accounting, or with a master's degree in business administration with a concentration in accounting (U.S. Department of Labor Bureau of Labor Statistics, 2004). Accounting is a somewhat competitive field but educated accountants can usually find employment. Previous experience in accounting or auditing can help an applicant land job. Many colleges offer summer or part-time internship programs conducted by public accounting or business firms. In addition, technical aptitude in accounting and internal auditing is a great asset for jobseekers in the industry.

According to the U.S. Department of Labor Bureau of Labor Statistics (2004): "Employment of accountants and auditors is expected to grow about as fast as the average for all occupations… [END OF PREVIEW]

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