Dynamic Culture of Accounting Profession

Dynamic Culture of Accounting Profession

Sean Lowery

Cost Accounting 303

October 25, 2009

In the business world, the Accounting profession has been referred to by many as the “language of business.” The field is defined as the study of how businesses track their income and assets over time. Duties involve preparing financial statements, computing costs, and developing certain tax strategies. Accountants, today, work as consultants in business. They advise management in many different financial decisions and are involved in many business transactions.  An accountant must possess a wide variety of skills. Analytical skills, computer skills, and communication skills are all necessary to have in the profession.  The changing atmosphere of the accounting profession has resulted in a more demanding curriculum, but allows for many diverse job options in accounting.

Accounting has undergone many changes over the past several decades that have changed the field drastically. Globalization is a key factor that changed the profession and how it is defined. Since many companies are now going overseas, the need for a set international standard of accounting is needed. For example, more investors are looking overseas for possible investment opportunities, so reliable information from an international company is needed.  Accounting professionals must keep up with globalization by providing more accurate and up-to-date information.  They must understand foreign companies’ business practices and business laws. Another factor that contributes to the changing environment of the field of Accounting is the increase regulations and government control. Financial accounting usually is overseen by the Federal Accounting Standards Board, FASB. Accountants must also conform to the principles which are outlined in the Generally Accepted Accounting Principles, GAAP. In the past decade, a handful of incidents have called for changes in regulations. Major scandals include the incident of Enron and TYCO electronics. In response to these scandals, the federal government has created the Sarbanes Oxley Act. This law set new standards that would enhance companies’ reliability and accuracy in their financial reporting. Many aspects of the legislation provided significant changes, particularly in how auditing is conducted. These changes call for companies to spend millions of dollars to keep in compliance of the new legislation. The Sarbanes-Oxley Act of 2002 also allowed for changes that greatly affects internal users such as managers and executives.  New industries have also called for major changes in the Accounting profession.  In the future, changes will occur that will increase the outlook for accounting majors. Many current accountants are retiring or a few years away.

The accounting field is increasingly becoming more demanding. To keep up with the dynamic culture of accounting, the curriculum and standards for accounting has become stricter. The highest certification for an accountant is passing the Certified Public Accountant exam, CPA. This rigorous exam is composed of four parts, which include auditing, financial accounting and reporting, regulation, and business environment. Before, people gained the certification by simply passing the four part exam. However, in the past decade, new requirements have been set before a person can sit for the exam. For many states, it is now required to have 150 semester hours and two years experience in public accounting. Specifically in Pennsylvania, the 150 hours and two years of public accounting experience will be implemented in the 2011. The reason for this change is to make the accounting field a more technical field. It also allows people to be better prepared to work in the changing environment of businesses today. They will be better prepared to tackle new challenges in the field such as working with advancing technology and dealing with more complex business decisions. The 150 hour requirement eliminates any inconsistencies between state-to-state regulations. Accountants will be able to work in other states without conforming to the specific standards the state has in place. The new consistency of standards between states is needed in today’s high tech, global environment. The new requirements benefits business is so many ways. After finishing a bachelous degree in Accounting, many go on to get a Masters in accounting or get an MBA, Masters of Business Administration. The added education illustrates the commitment to the profession which can only be a benefit.  Even though there will be an increase demand for accountants, many people are choosing not to enter the major because of the increase in requirements for CPA’s and government regulations. The American Institute of Certified Public Accountants, AICPA, stated that between 1996 and 2000, the number of students pursuing an accounting degree decreased by 25%. However, the percentage of people who pass the CPA for the first time had increased. The decrease of people pursuing an accounting degree is contributing to a likelihood of substantial salary increases for CPA’s This can be explained by the implementation of the 150 hour rule.

Accounting offers many opportunities and job options. Many new opportunities have been created due to the changing culture of Accounting. Before, accounting graduates would enter into the field with a good mindset of what they were going to do. For many who obtained their bachelors in Accounting, they were most likely going to work in a big four firm, attempt to certified, and advance within the career. The Big Four firms include PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young, and KPMG. Specifically, the new industries created in the past decade helped to offer more opportunities in Accounting. New industries lead to more specialization in Accounting. Instead of accountants doing a wide variety of tasks at a big firm, Accountants are working in small or mid-sized CPA firms. These smaller firms focus on a specific type of company or size of company. Examples of these firms include BDO Seidman, Grant Thornton, and RSM McGladrey. Biotechnology, environmental business, telecommunications all require accountants to operate efficiently. A new trend for accounting majors is the increase in non accounting field. Many accounting majors end up working in careers related to finance, management, marketing, or even computer science. Accountants, in the past, were not necessarily considered to be consultants. They explained costs and assets, but were not in control over profit gaining. Making accountants influence in revenue generation allows for more options in the career. Many accountants take jobs as in budget analysis. Budget analysis involves developing and managing organizations financial plans.  Managerial Accounting very much involves consulting with top management on strategies to maximize profits. A popular trend in the Accounting field is tax strategy. Accountants who have knowledge on federal tax regulations may pursue career options in developing tax strategies and increasing profits. Women are especially experience more opportunities in Accounting. There has been a large increase of women accounting graduates and many go on to work in variety of different careers. Some women accountants end up working in financial institutions, education, health care institutions, etc. Many Accounting majors are pursuing careers in the FBI. Many accountants who work for the FBI work as forensic accounting. Forensic accounting involves investigating white collar crime. The need for forensic accounting is increasing as a result of white collar scandals in the past decade.

In conclusion, the accounting profession has undergone many changes, which calls for a more demanding curriculum and more job options. Accounting remains to be and will always be considered to be the language of business. The field is now more than just how businesses track their income. Accountants carry a wide variety of skills, many of which who have developed new skills in the past few decades. It is correct to say that accountants are now consultants who are involved in advising management.

Cuddy, B. (1992, Summer). New career paths in accounting. Massachusetts CPA Review, 66(3), 8. Retrieved October 24, 2007, from Business Source Premier database.

Business Credit. (2002, October). Working Smart: New Education Requirement Poses Challenges for Accounting. Business Credit, 8. Retrieved October 24, 2007, from Business Source Premier database.

Warner, J. (2007, September). The New Specialists. Directorship, 44(7). Retrieved October 24, 2007, from Business Source Premier database.

Basics Of Small Business Accounting

Accounting is a key function of any business-big or small. Good accounting practices are necessary to maintain an accurate set of books which in turn are necessary for taking business decisions, raising capital or bank loans and of-course for knowing how much money your business is making!.

 

Getting the accounting right for small businesses is all about doing simple accounting things well every time. These practices can be easily implemented by most business owners. Some of the key things are:

 

a. Keep all business and personal transactions separate. Use a business card if possible, to segregate business transactions.

 

b. All sales are deposited and that all expenses are recorded in the business checking account or on a business credit card.

 

c. Book even cash-receipts from customers. Ideally store all the cash in a drawer and reconcile the account at-least once a month (if not weekly)

 

d. Track personal funds used to pay company expenses or vice-versa through one account. Track reimbursements to owners also through this account. This helps in clearly identifying what money has been spent by you on business transactions

 

e. Reconcile all bank and credit card accounts-monthly. This is a highly recommended practice as its benefits go beyond just good accounting. When your bookkeeper/you reconcile books, you get a clear picture of how funds move in-and-out of your bank account.

 

f. As far as possible, track all bills under a proper expense account. Always right the nature of the expense in memo.

 

g. Clear tracking of expenses can save a lot of money in taxes as many expenses may be deductible. Your tax-preparer or CPA will not be able get you those benefits if can’t see them booked in right accounts or atleast with enough detail in memo.

 

h. Simplicity of small business software like QuickBooks has made many small business owners to do their accounting themselves. This is not a good idea as without the basic accounting knowledge, it’s easy to make errors like treating a liability as an expense. For e.g. I see many small business owners books loan repayments as a expense without separating the principal and interest components

 

Accounting for small business is not rocket science; it’s about being systematic and detailed. The starting point is to set in good accounting practices. These are best done by using a professional accountant or bookkeeper. Today, small businesses can access qualified and efficient accounting talent not available locally. Your accountant no longer needs to be present in your office or physically meet you. He/She can be in another part of the country or even outside the country!!

 

Facebook Account Suspended


Image by Dan Patterson

Retail Accounting: the Best Way to Simplify Accounting Tasks

 

People, who are concerned with any kind of mercantile activity, need to have basic knowledge of accounting. Retails shops are one of the busiest placed, where accounting transaction takes place very rapidly, hence, people, who handle accounting functions in any retail shop should be efficient enough to monitor and record these transactions. Cash flow is the basic of every accounting system and efficiency of any accounting system depends on how the accountant record and report the cash flow. Since retail shops deals with immeasurable cash transactions, quick and efficient maintenance of transactions is must. People, who manage accounting records in any retail shop deal with thousands of financial entries everyday, hence, a slight mistake made by them can affect the complete accounting statement for the day. And tallying such records may take extra hours and can influence the smooth processing of accounting data. To avoid flaws in accounting record the retail shop owner either needs to hire extra and efficient employees or outsource retail accounting task to an external accounting firm. Both the options can enable the shop owner to maintain flawless accounting records and can allow him or her to be rest assured about accuracy and accountability.

 

Question that comes in every mind that what retail accounting is so completed? However, answer is simple and outlines the number of entries and business transactions per day. Handling cash transaction is tougher than handling online or bank transactions and cash collection in retail accounting is tallied with accounts on daily basis. In such a situation, mislay of a single rupee can take hours in totaling and can make the entire process more complicated and time consuming. Perhaps, complexity and sensitivity are the reasons that are increasing the tendency of hiring accounting services among retail shop owners.

 

Retail accounting one way or another carries messy dealings that presents a big challenge for professionals, who handle such accounting tasks. Hiring accounting services from outside provides the retail shop owner with a convenient option to keep an eye on daily sales plus stock available. Since numerous products are launched everyday, retails shopkeepers face a lot of problems in managing their accounts, as every product comes with different scheme and offer and keeping their record enhances the accounting burden. Well managed accounting data helps a retail shopkeeper in getting detailed information about sale of every individual product.

 

However, retail accounting is complicated and hassle some task but it can be simpler by outsourcing some of its portion of any accounting firm. Firms that offer accounting help for retails shops make it possible through highly qualified accounting professionals; hence, it can be assumed that mistakes will not occur. Computerized accounting systems can also be used for making this task hassle some, as computerized procedures can be handled without putting extra efforts and human resource. People, who are facing accounting flaws everyday, need to ponder over any solution, as regular mistakes in accounting records can affect their financial position in long run.

Financial Accounting ACG2021 Spring 2008 SFCC Chapter 2 Crosson
Video Rating: 4 / 5