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Accountants and Auditors

(D.O.T. 160 through .167-042, -054, and .267-014)

Nature of the Work

Managers must have up-to-date financial information in
order to make important decisions. Accountants and auditors
prepare, analyze, and verify financial reports and taxes,
and monitor information systems that furnish this
information to managers in all business, industrial, and
government organizations.

   Four major fields of accounting are public, management,
and government accounting, and internal auditing. Public
accountants have their own businesses or work for public
accounting firms. They perform a broad range of accounting,
auditing, tax, and consulting activities for their clients,
who may be corporations, governments, nonprofit organizations,
or individuals. Management accountants, also called industrial,
corporate, or private accountants, record and analyze the
financial information of the companies for which they work.
Internal auditors verify the accuracy of their organization's
records and check for mismanagement, waste, or fraud.
Government accountants and auditors maintain and examine
the records of government agencies and audit private
businesses and individuals whose activities are subject to
government regulations or taxation.

   Within each field, accountants often concentrate on one
phase of accounting. For example, many public accountants
concentrate on tax matters, such as preparing an
individual's income tax returns and advising companies of
the tax advantages and disadvantages of certain business
decisions. Others concentrate on consulting and offer
advice on matters such as employee health care benefits, and
compensation; the design of companies' accounting and data
processing systems; and controls to safeguard assets. Some
specialize in forensic accounting investigating and
interpreting bankruptcies and other complex financial
transactions. Still others work primarily in auditing
examining a client's financial statements and reporting to
investors and authorities that they have been prepared and
reported correctly. However, fewer accounting firms are
performing this type of work because of potential liability.

   Management accountants analyze and interpret the financial
information corporate executives need to make sound business
decisions. They also prepare financial reports for nonmanagement
groups, including stock holders, creditors, regulatory agencies,
and tax authorities. Within accounting departments, they may work
in financial analysis, planning and budgeting, cost accounting,
and other areas.

   Internal auditing is rapidly growing in importance. As computer
systems make information more timely and available, top management
can base its decisions on actual data rather than personal
observation. Internal auditors examine and evaluate their firms'
financial and information systems, management procedures, and
internal controls to ensure that records are accurate and controls
are adequate to protect against fraud and waste. They also
review company operations evaluating their efficiency,
effectiveness, and compliance with corporate policies and
procedures, laws, and government regulations. There are many
types of highly specialized auditors, such as electronic data
processing auditors, environmental auditors, engineering auditors,
legal auditors, insurance premium auditors, bank auditors, and
health care auditors.

   Accountants and auditors also work for Federal, State, and local
governments. Government accountants see that revenues are received
and expenditures are made in accordance with laws and regulations.
Many persons with an accounting background work for the Federal
Government as Internal Revenue Service agents or in financial
management, financial institution examination, and budget analysis
and administration.

   In addition, a small number of persons trained as accountants
teach and conduct research at business and professional schools.
Some work part time as accountants or consultants.

   Computers are widely used in accounting and auditing.
With the aid of special computer software packages,
accountants summarize transactions in standard formats for
financial records or organize data in special formats for
financial analysis. These accounting packages are easily
learned and require few specialized computer skills, and
greatly reduce the amount of tedious manual work associated
with figures and records. Personal and laptop computers
enable accountants and auditors in all fields even those
who work independently to use their clients' computer system
and to extract information from large mainframe computers.
Internal auditors may recommend controls for their
organization's computer system to ensure the reliability of
the system and the integrity of the data. A growing number
of accountants and auditors have extensive computer skills
and specialize in correcting problems with software or
developing software to meet unique data needs.

CPA's have the widest range of job opportunities.

Working Conditions

Accountants and auditors work in offices, but public
accountants may frequently visit the offices of clients
while conducting audits. Self-employed accountants may be
able to do part of their work at home. Accountants and
auditors employed by large firms and government agencies may
travel frequently to perform audits at clients' places of
business, branches of their firm, or government facilities.

   The majority of accountants and auditors generally work
a standard 40-hour week, but many work longer, particularly
if they are self-employed and free to take on the work of as
many clients as they choose. For example, about 4 out of 10
self-employed accountants and auditors work more than 50
hours per week, compared to 1 out of 4 wage and salary
accountants and auditors. Tax specialists often work long
hours during the tax season.

Employment

Accountants and auditors held about 939,000 jobs in 1992.
They worked throughout all types of firms and industries,
but nearly one-third worked for accounting, auditing, and
bookkeeping firms, or were self-employed.

   The majority of accountants and auditors were
unlicensed management accountants, internal auditors, or
government accountants and auditors. However, in 1992 there
were on record over 475,000 State-licensed Certified Public
Accountants (CPA's), Public Accountants (PA's), Registered
Public Accountants (RPA's), and Accounting Practitioners
(AP's). The vast majority of these over 400,000 were
CPA's, but there may have been far fewer practicing CPA's in
the country; many CPA's hold licenses in several States at
once.

   Most accountants and auditors work in urban areas where
public accounting firms and central or regional offices of
businesses are concentrated. Roughly 10 percent of all
accountants were self-employed, and less than 10 percent
worked part time.

   Some accountants and auditors teach full time in junior
colleges and colleges and universities; others teach part
time while working for private industry or government or as
self-employed accountants.


Training, Other Qualifications, and Advancement

Most public accounting and business firms require
applicants for accountant and internal auditor positions to
have at least a bachelor's degree in accounting or a related
field. Those wishing to pursue a bachelor's degree in
accounting should carefully research accounting curricula
before enrolling. Many States will soon require CPA
candidates to complete 150 semester hours of coursework
prior to taking the CPA exam, and many schools have altered
their curricula accordingly. Some employers prefer those
with a master's degree in accounting or a master's degree in
business administration with a concentration in accounting.
Most employers also prefer applicants who are familiar with
computers and their applications in accounting and internal
auditing.

   For beginning accounting and auditing positions in the
Federal Government, 4 years of college (including 24 semester
hours in accounting or auditing) or an equivalent combination
of education and experience is required.

   Previous experience in accounting or auditing can help
an applicant get a job. Many colleges offer students an
opportunity to gain experience through summer or part-time
internship programs conducted by public accounting or
business firms. Such training is invaluable in gaining
permanent employment in the field.

   Professional recognition through certification or licensure
also is helpful. In the majority of States, CPA's are the only
accountants who are licensed and regulated. Anyone working as a
CPA must have a certificate and a license issued by a State board
of accountancy. The vast majority of States require CPA
candidates to be college graduates, but a few States substitute
a certain number of years of public accounting experience for
the educational requirement. Based on recommendations made by
the American Institute of Certified Public Accountants and the
National Association of State Boards of Accountancy, some States
currently require that CPA candidates complete 150 semester
hours of college coursework, and many other States are working
toward adopting this law. This 150-hour rule requires an
additional 30 hours of coursework beyond the usual 4-year
bachelor's degree in accounting.

   All States use the four-part Uniform CPA Examination
prepared by the American Institute of Certified Public
Accountants. The 2-day CPA examination is rigorous, and
only about one-quarter of those who take it each year pass
each part they attempt. Candidates are not required to pass
all four parts at once, although most States require candidates
to pass at least two parts for partial credit. Many States
require all sections of the test to be passed within a
certain period of time. Most States also require applicants
for a CPA certificate to have some accounting experience.

   The designations PA or RPA are also recognized by most
States, and several States continue to issue these licenses.
With the growth in the number of CPA's, however, the
majority of States are phasing out the PA, RPA, and other
non-CPA designations by not issuing any more new licenses.
Accountants who hold PA or RPA designations have similar
legal rights, duties, and obligations as CPA's, but their
qualifications for licensure are less stringent. The
designation Accounting Practitioner is also awarded by
several States. It requires less formal training than a CPA
license and covers a more limited scope of practice.

   Nearly all States require both CPA's and PA's to complete a
certain number of hours of continuing professional education
before their licenses can be renewed. The professional
associations representing accountants sponsor numerous
courses, seminars, group study programs, and other forms
of continuing education.

   Professional societies bestow other forms of credentials on a
voluntary basis. Voluntary certification can attest to
professional competence in a specialized field of accounting
and auditing. It also can certify that a recognized level of
professional competence has been achieved by accountants and
auditors who acquired some skills on the job, without the
amount of formal education or public accounting work experience
needed to meet the rigorous standards required to take the CPA
examination. Increasingly, employers seek applicants with these
credentials.

   The Institute of Internal Auditors confers the
designation Certified Internal Auditor (CIA) upon graduates
from accredited colleges and universities who have completed
2 years' work in internal auditing and who have passed a
four-part examination. The EDP Auditors Association confers
the designation Certified Information Systems Auditor (CISA)
upon candidates who pass an examination and who have 5 years
of experience in auditing electronic data processing
systems. However, auditing or data processing experience
and college education may be substituted for up to 3 years.
Other organizations, such as the National Association of
Certified Fraud Examiners and the Bank Administration
Institute, confer other specialized auditing designations.

   The Institute of Management Accountants (IMA), formerly
the National Association of Accountants, confers the
Certified Management Accountant (CMA) designation upon
college graduates who pass a four-part examination, agree to
meet continuing education requirements, comply with
standards of professional conduct, and have at least 2
years' work in management accounting. The CMA program is
administered through an affiliate of the IMA, the Institute
of Certified Management Accountants. The Accreditation
Council for Accountancy and Taxation, a satellite
organization of the National Society of Public Accountants,
awards a Certificate of Accreditation in Accountancy to
those who pass a comprehensive examination, and a
Certificate of Accreditation in Taxation to those with
appropriate experience and education. It is not uncommon
for a practitioner to hold multiple licenses and
designations. For instance, one internal auditor might be a
CPA, CIA, and CISA.

   Persons planning a career in accounting should have an
aptitude for mathematics, be able to analyze, compare, and
interpret facts and figures quickly, and make sound
judgments based on this knowledge. They must be able to
clearly communicate the results of their work, orally and in
writing, to clients and management.

   Accountants and auditors must be good at working with
people as well as with business systems and computers.
Accuracy and the ability to handle responsibility with
limited supervision are important. Perhaps most important,
because millions of financial statement users rely on their
services, accountants and auditors should have high
standards of integrity.

   Capable accountants and auditors should advance rapidly;
those having inadequate academic preparation may be
assigned routine jobs and find promotion difficult. Many
graduates of junior colleges and business and correspondence
schools, as well as bookkeepers and accounting clerks who
meet the education and experience requirements set by their
employers, can obtain junior accounting positions and
advance to more responsible positions by demonstrating their
accounting skills on the job.

   Beginning public accountants usually start by assisting
with work for several clients. They may advance to
positions with more responsibility in 1 or 2 years and to
senior positions within another few years. Those who excel
may become supervisors, managers, or partners, open their
own public accounting firms, or transfer to executive
positions in management accounting or internal auditing in
private firms.

   Beginning management accountants often start as cost
accountants, junior internal auditors, or as trainees for
other accounting positions. As they rise through the
organization, they may advance to accounting manager, chief
cost accountant, budget director, or manager of internal
auditing. Some become controllers, treasurers, financial
vice presidents, chief financial officers, or corporation
presidents. Many senior corporation executives have a
background in accounting, internal auditing, or finance.

   There is a large degree of mobility among public
accountants, management accountants, and internal auditors.
Practitioners often shift into management accounting or
internal auditing from public accounting, or between
internal auditing and management accounting. However, it is
less common for accountants and auditors to move from either
management accounting or internal auditing into public
accounting.

Job Outlook

Employment of accountants and auditors is expected to
grow faster than the average for all occupations through the
year 2005. Qualified accountants and auditors should have
good job opportunities. Although the profession is
characterized by a relatively low rate of turnover, because
the occupation is so large many openings also will arise as
accountants and auditors retire, die, or move into other
occupations. CPA's should have the widest range of
opportunities, especially as more States enact the 150-hour
rule and it becomes more difficult to become a CPA.

   As the economy grows, the number of business
establishments increases, requiring more accountants and
auditors to set up their books, prepare their taxes, and
provide management advice. As these businesses grow, the
volume and complexity of information developed by
accountants and auditors on costs, expenditures, and taxes
will increase as well. More complex requirements for
accountants and auditors also arise from changes in
legislation related to taxes, financial reporting standards,
business investments, mergers, and other financial matters.
In addition, businesses will increasingly need quick,
accurate, and individually tailored financial information
due to the demands of growing international competition.

   The changing role of public accountants, management
accountants, and internal auditors also will spur job
growth. Public accountants will perform less auditing work
due to potential liability, and less tax work due to growing
competition from tax preparation firms, but they will assume
an even greater management advisory role and expand their
consulting services. These rapidly growing services will
lead to increased demand for public accountants in the
coming years. Management accountants also will take on a
greater advisory role as they develop more sophisticated and
flexible accounting systems, and focus more on analyzing
operations rather than just providing financial data.
Similarly, management will increasingly need internal
auditors to develop new ways to discover and eliminate waste
and fraud.

   Despite growing opportunities for qualified accountants
and auditors, competition for the most prestigious jobs
such as those with major accounting and business firms will
remain keen. Applicants with a master's degree in
accounting, a master's degree in business administration
with a concentration in accounting, or a broad base of
computer experience will have an advantage. Moreover,
computers now perform many simple accounting functions,
allowing accountants and auditors to incorporate and analyze
more information. This increasingly complex work requires
greater knowledge of more specialized areas such as
international business and current legislation, and
expertise in specific industries.

Earnings

According to a College Placement Council Salary Survey in
1993, bachelor's degree candidates in accounting received
starting salary offers averaging nearly $28,000 a year;
master's degree candidates in accounting, over $30,000.

   According to a survey of workplaces in 160 metropolitan
areas, accountants with limited experience had median
earnings of $24,700 in 1992, with the middle half earning
between $22,200 and $27,500. The most experienced
accountants had median earnings of $76,000, with the middle
half earning between $68,500 and $84,600. Public
accountants employed by public accounting firms with
limited experience had median earnings of $28,000 in 1992,
with the middle half earning between $26,500 and $29,400.
The most experienced public accountants had median earnings
of $42,400, with the middle half earning between $36,900 and
$50,400. Many owners and partners of firms earned
considerably more.

   Based on a survey by the Institute of Management
Accountants, the average salary of IMA members was about
$55,100 a year in 1992. IMA members who were certified
public accountants averaged $61,900, while members who were
certified management accountants averaged $58,700.

   According to a survey by the Institute of Internal
Auditors, salaries of internal auditors in 1992 ranged from
$26,500 for those with less than 2 years of experience to
$60,700 for those with over 10 years of experience.

   In the Federal Government, the starting annual salary
for junior accountants and auditors was about $18,300 in
1993. Candidates who had a superior academic record could
begin at about $22,700. Applicants with a master's degree
or 2 years' professional experience began at $27,800.
Accountants employed by the Federal Government in
nonsupervisory, supervisory, and managerial positions
averaged $46,300 a year in 1993; auditors, $48,200.

Related Occupations

Accountants and auditors design internal control systems
and analyze financial data. Others for whom training in
accounting is invaluable include appraisers, budget
officers, loan officers, financial analysts and managers,
bank officers, actuaries, underwriters, tax collectors and
revenue agents, FBI special agents, securities sales
workers, and purchasing agents.

Sources of Additional Information

Information about different accounting licenses and the
standards for licensure in your State may be obtained from
your State board of accountancy. A list of the addresses
and chief executives of all State boards of accountancy is
available from:

   National Association of State Boards of Accountancy, 380
Lexington Ave., Suite 200, New York, NY 10168-0002.

   Information about careers in certified public
accounting and about CPA standards and examinations may be
obtained from:

   American Institute of Certified Public Accountants, 1211
Avenue of the Americas, New York, NY 10036-8775, or call 1-800-862-4272.

   Information on management and other specialized fields of accounting
and auditing and on the Certified Management Accountant program is
available from:

   Institute of Management Accountants, 10 Paragon Dr., Montvale, NJ
07645-1760.

   National Society of Public Accountants and the Accreditation Council
for Accountancy and Taxation, 1010 North Fairfax St., Alexandria, VA
22314.

   The Institute of Internal Auditors, 249 Maitland Ave.,
Altamonte Springs, FL 32701-4201.

   The EDP Auditors Association, 455 Kehoe Blvd., Suite 106,
Carol Stream, IL 60188-0180.

   For information on accredited accounting programs and
educational institutions offering a specialization in
accounting or business management, contact:

   American Assembly of Collegiate Schools of Business, 605
Old Ballas Rd., Suite 220, St. Louis, MO 63141.