Accounting is one of the oldest fields of business. Records show accountants existed in Mesopotamia over 7,000 years ago. These historic accountants kept records of crops and livestock. Today’s accountants usually work on behalf of organizations to produce financial records of the organization’s expenditures and profits, in addition to preparing tax records. They can be considered as the backbone of many businesses, as they are necessary for the efficient operation of these organizations.
According to the Bureau of Labor Statistics, the 2010 median pay for accountants was $61,690 per year, or $29.66 per hour. The lowest 10 percent of accountants earned less than $38,940, while the highest 10 percent of earners pulled in over $106,880. The 2013 average starting salary for accountants is $53,300; a seven percent increase from last year’s starting salary. There are dozens of areas of expertise within the general accounting field.
Managerial accountants prepare financial information for only the internal users of a company, such as management or executives. They may be asked to submit reports on a weekly, quarterly or yearly basis, depending on the needs of the client. These reports are confidential and used for decision-making. In managerial accounting, the goal is to examine financial data for forecasting purposes. The average salary for managerial accountants is from $45,000 to over $65,000 per year.
Tax accountants prepare and file income tax information for personal, corporate or government clients. It is also necessary to keep track of ever-changing tax regulations, in addition to determining the tax consequences of future business plans. Tax accountants are involved with reducing a company’s tax liability, and ensuring clients are aware of the consequences of failing to abide by tax regulations. It is often necessary to work with financial teams to formulate strategies to benefit the client. The starting salary for tax accountants ranges between $51,000 and $70,250 annually.
Government accountants focus on the financial affairs of government organizations. Government accounting uses a fund accounting system. Fund accounting is a system which emphasizes accountability over profitability. Government accountants manage funds assigned to a unit for specific purposes according to certain regulations. Government accounting differs from traditional accounting in that it focuses on measuring the influx and outflow of government finances rather than measuring economic activity. On average, government accountants earn $59,000 a year.
Auditing is a professional service intended to streamline financial records. Auditors provide independent assessment of the accuracy and fairness of an organization’s financial statements. They work in accordance with the client to guarantee all financial information is legal and valid. The auditor’s job is to review and give advice on clients’ accounts. They often test the internal methods of the business’s accounting system. This allows for risk-free decision-making. The median salary for auditors is $63,550, according to the Bureau of Labor Statistics. The salary is $51,000 on average, and $92,000 for supervisory auditors.
Cost accountants measure the cost of producing services by determining the fixed and variable expenses necessary for production. These costs include research and development, equipment, marketing and human resources. The information gathered by a cost accountant is beneficial for budgeting and product pricing, which both affect the future profits of the business. Cost accountants often collaborate with an executive team to create a financial plan for the company. The starting salary of a cost accountant is between $40,000 and $51,000 a year. According to the Bureau of Labor Statistics, the median salary is $60,340 yearly. After three years, the average salary may be between $45,000 and $70,000 per year.
Budget analysis involves efficiently distributing funds throughout an organization. A budget analyst provides the guidelines through which a company prepares its annual budget. They convene with managers to determine the financial needs of each department of the company for the forthcoming fiscal year. Any new plans must be approved by the budget analyst after comparing with the business’s financial goals. The budget analyst also monitors department spending yearlong. On average, budget analysts earn $68,200 per year, with the top 10 percent earning over $100,000.
Forensic accountants analyze and investigate financial records for irregularities, which may indicate potential fraud or embezzlement. They also make recommendations to prevent fraud. In fraud cases, they reconstruct events involved in any financial wrongdoing. Based on their findings, forensic accountants may be required to testify or present information in court. Forensic accounting is a specialized field which requires evidence gathering and knowledge of investigative techniques and litigation procedures. Starting salaries range from $69,000 to $102,000 annually. The average salary is $73,000 per year.
Teaching in Accounting
Many students of accounting desire to earn a doctorate degree in order to become an accounting professor. An accounting professor researches and teaches accounting students and fellow professionals. They perform research on accounting information systems, financial accounting, managerial accounting, tax accounting and auditing. As teachers of accounting, professors cover these same areas. The courses range from introductory to advanced. The average starting salary of an accounting professor is $127,400. An assistant professor earns $113,800; an associate professor earns $114,900; while a full professor earns $137,800 yearly.
Individual CPA or Large Firm?
As an accountant, one will consider the risks and benefits of working with an accounting firm against running a solo operation. As an individual accountant, it may be harder to garner the attention of clients, as opposed to having the support provided by a large firm. This is worth considering during times of economic instability, as it can affect one’s livelihood in both ways. An accountant with his or her own firm has the opportunity to run a business within itself, making all executive decisions with guaranteed employment. With a large firm, employment may not be guaranteed, but there is better chance of maintaining a steady stream of clients. New accountants earn more at large firms than at smaller companies. Entry-level accountants at large firms earn between $50,000 and $55,000.
The Big Four
The accounting firms of Deloitte Touche Tohmatsu Limited, Ernst & Young, KPMG and PricewaterhouseCoopers are collectively known as the Big Four. These firms are the largest international providers of professional accountancy services. Not surprisingly, salaries for these firms are above average for the industry. Based on experience, the average CPA can expect to earn between $48,396 and $79,024. At Deloitte Touche, a CPA earns between $42,574 and $98,823. At Ernst & Young, a CPA’s salary ranges from $45,570 to $107,164 annually. At KPMG, the salary is between $48,882 and $103,353. For PricewaterhouseCoopers, CPAs have a salary range of $49,466 to $103,042 per year.
Salaries for accountants vary depending on the company, location, field, and experience. The educational level also affects the average salary. Those employed by the Big Four will usually earn more and will have greater opportunities for future employment. No matter the salary earned, a skilled accountant will undoubtedly have the expertise to manage the wealth he or she is sure to earn in one of these lucrative fields.