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Students about to graduate college in the accounting program and begin their journey into the real world often struggle to decide whether they want to pursue career in private or public accounting. The answer to this mind boggling question is all students should choose a career in public accounting over private accounting right after college.
Most students make decisions based on salary and eventually start to dislike their jobs because that type of accounting practice doesn't match their lifestyle.
The purpose of this report is to analyze between the two main type of accounting practices (private and public accounting) mainly based on criteria such as salary, duties performed and scope of promotion. Through this report, the best option will be recommended to students who will be looking forward to pursue a career in accounting field.
The benefits that can be concluded for choosing public over private accounting are as follows:
Promotion. Typically a public accountant can see advancement in their career within as little as two to three years and attain a senior position in a couple years after that. Private accountants require a variety of expertise before becoming an executive.
Salary. Public accountants have the potential to earn almost double what a private accountant could earn in their
Experience. Public accountants are exposed to a variety of different aspects form auditing and assurance, consulting services, to tax services on a day to day basis for a multitude of companies. Private accountants tend to have one specific job duty day in and day out for same company.
Average Workday. Public accountants work days differ from project to project allowing for flexibility where as private accountants tend to work a structured 40hrs a week allowing for no flexibility.
Based on these four criteria it can be concluded that public accounting is the correct career path for newly graduated students.
THE BENEFITS OF PUBLIC ACCOUNTING VERSES PRIVATE ACCOUNTING
This formal report is to inform those about to graduate at a post secondary educational institution in the accounting program about why a career in public accounting is most advantageous. This report will enlighten its audience as well as prove why public accounting is recommended as a preferred choice over private accounting by describing the benefits of four determining factors that one may consider when choosing which career path they may want to follow. They are;
4) Average Workday.
How is Public accounting different from Private accounting?
Public accountants can perform numerous jobs within their field such as accounting, auditing, evaluating tax, and advising their clients. Their clients can be corporations, governments, nonprofit organizations or individuals. They may be assigned to 4-5 or even more companies during the course of a year and may not deal with same client again. Some public accountants focus on forensic accounting, which includes investigation of fraud or money laundering within a company by an employee or employer, while other accountants specialize in preparing individual income tax returns or providing solution and advice to corporate firms on taxation matters that are related to business decision. They also do consulting in activities such as compensation or employee health care benefits and how to design accounting and data processing systems. (http://www.articlesbase.com/recruitment-articles/a-brief-summary-of-accounting-field-1334638.html) Public accountants, who succeed in their CPA examination, become Certified Public Accountant, and they can run their own businesses or work for Public accounting firms.
Conversely private accountants generally work for a particular employer, even though they perform task same as public accountant, however these duties are specific to the businesses for which they work, such as internal auditing, financial analysis, and taxation within the company. (http://www.wisegeek.com/what-is-tax-accounting.html).
Most private accountants are employed by corporations or businesses, government agencies as well as nonprofit organization to perform internal audit of the company, prepare and analyze company's several financial statements and reports. They also guide their managers on government policies and regulations, so that company can always make correct decisions. Even though private accountant may have a title, such as "internal auditor or management accountant, but all perform the similar function, therefore it is considered as part of private accounting.
In the working world everyone is looking to move up in the company. Moving up in the company means an increased salary to stimulate the bank account as well as more challenging work to stimulate the mind.
When working in the private sector of accounting there is less potential to advance in ones career based on the face that the company just isn't large enough. This means that unless some of the more senior management staff retires there isn't much room for job growth.
In the public sector of accounting however, there is a vast amount of room to grow. Companies are always expanding as well as try to draw in new business and explore new markets. This in turn will open up plenty of management positions that will allow movement upwards in the business hierarchy; therefore promotion is always around for the hardworking public accountants.
As with any job the most important determining factor as to whether or not to accept the job, significantly depends on salary package it offers. Table 1 lists the average yearly earnings for accountants in both the public and private (also referred to as corporate) sector.
As listed in Table 1 a private accountant is looking at a start in salary of $33,250 to $57,750 annually depending on whether or not they work in a small or large company. For a public accountant they are looking at an average yearly salary of $41,200 to $70,000. Individually compared this table depicts that accountants in the public sector have the potential to earn a starting salary of at least an additional $8,000 a year more than that of a private accountant. Furthermore this table also shows that senior level accountants in any size firm in the public sector whether it be small or large have the potential to earn 6 figure salaries where as an accountant in a larger firm in the private sector is only earning a 5 figure salary.
When applying for a position at any business employers are always looking for a candidate with experience. The more experienced the candidate the more likely the chances of getting an interview as well as the job. The experience gained by a public accountant is vastly greater then that of a private accountants.
Public accountants work in a fasted paced environment and can be expected to do anything from auditing to tax services for a variety of different companies. Since public accountants work for a firm that offers accounting services to other companies, public accountants can expect to travel as well as meet owners and Chief Financial Officers of various companies whether they be big or small. This means that not only will public accountants learn many different aspects of the accounting field, they will also enhance their communication skills by working with other companies as well as increase their exposure by working towards different accounting scenarios and by going out and meeting new important business executives while on the job. This in turn can open up new job prospects that would otherwise not have been possible.
Private accountants on the other hand go to the same place of business and perform the same routine job everyday. They work with the same employees and rarely ever interact with executives and Chief Financial Officers of other companies. This limits an accountant in the private sector to enhance their knowledge in the accounting field. as well as network
A typical work day for a public accountant would likely be classified as an exhaustive day for a private accountant. The work may perhaps be the same, for instance a public accountant performing tax services for a client would be the same as private accountant performing tax services for his/her own company, however, the hours worked and location may not the same. An average work day for a private accountant would be comprised of going to the same place of business Monday to Friday for roughly 40 hours a week. A public accountant, on the other hand may have to travel to client his/her company's client who has contracted their services. A public accountant could easily be expected to work over 40 hours a week depending on the job and is more likely to doing a variety of different accounting services for a variety if different companies. Jack Causa of Meris group described work routine of majority of public accountants "most public accountants went through in the last few months; early morning appointments, 10-minute lunch breaks, late night appointments, weekend marathon sessions at the office, cranky clients, looming deadlines and an empty chair at the dinner table at home. Burnout in public accounting is so common that many of us in the recruiting profession now hear about it from candidates in the majority of our private conversations"
CONCLUSIONS AND RECOMMENDATIONS
After exhaustingly and extensively stressing the difference between a career in the public sector of accounting verses the private sector of accounting and via a comparison in on four major aspects which are; promotion, salary, experience, and average workday. It can be concluded that:
1) A job in public accounting offers more of an opportunity for career advancement to the management level faster then in private accounting.
2) The salary of a public accountant is far greater then that of a private accountant.
3) The experience gained by being a public accountant is more diverse and will contribute to becoming a well rounded accountant.
4) The average work day for public accountants allows for flexibility and consideration of ones life, rather then having to work ones life their work schedule like in private accounting.
Based on these conclusions it is recommended that students' graduation post secondary education should look towards attaining a job in the public sector of accounting rather then the private sector.