The Accounting Profession and the Work of Accountants

In terms of career opportunities, the field of accounting may be divided into three broad areas: (1) public accounting, (2) private accounting, and (3) governmental accounting.

Public accounting. Public accountants are independent professional persons comparable to attorneys or physicians, who offer accounting services to clients for a fee. The specific requirements regarding the right to practice public accounting vary among different countries. The three primary types of services rendered by public accountants are: auditing, income tax services, and management advisory services.

Private accounting. In contrast to the accountant in public practice who serves many clients, an accountant in private industry is employed by a single enterprise. The chief accounting officer of a medium-sized or large business is usually called the controller, in recognition of the fact that one of the primary uses of the accounting data is to aid in controlling business operations. He or she is a part of the top management team charged with the task of running the business, setting its objectives, and seeing that these objectives are met.

The accountants in a private business must record transactions and prepare periodic financial statements from accounting records. Within this area of general accounting, a number of specialized phases of accounting have developed. Among the more important of these are: design of accounting systems, cost accounting, financial forecasting, tax accounting, internal auditing, managerial accounting.

Government accounting. Government officials rely on financial information to help them direct the affairs of their agencies. Many governmental accounting problems are similar to those applicable to private industry. In other respects, however, accounting for governmental affairs requires a somewhat different approach because the objective of earning a profit is absent from public affairs. Universities, hospitals, churches, and other non-for-profit institutions also follow a pattern of accounting that is similar to governmental accounting. Governmental agencies employ accountants to prepare budgets and to audit the accounting records of various governmental departments. Every agency of government at every level must have accountants in order to carry out its responsibilities.