Today’s accountants offer much more than bookkeepers and auditors. They are financial specialists at the heart of all areas of business.
Accountancy qualifications provide a sound basis for many areas of finance, business or public service, as well as for accountancy itself. Different accountancy bodies’ qualifications can lead you in different directions. Consequently, you will have to decide:
- Which professional qualifications to take; this decision will affect the way your career develops.
- What kind of employment you want to start off in, i.e. small private practice, large industrial commercial firm or public sector?
- Where you see yourself in the long term: a partner in private practice, a specialist in a particular aspect of accountancy, or in general management, management consultancy, or another field in which accountancy is useful?
- We’ve detailed the different areas of accountancy below to help you choose the right one. Good luck!
Private practice
This area is also confusingly called public practice accountancy. Accountancy firms of all sizes fall into this area of accountancy. The majority of qualified accountants are employed in private practice. This sector also employs qualified accounting technicians.
Private practice firms provide various financial services to a wide range of clients. Only the very largest companies (which may have hundreds of partners and thousands of qualified staff!) have a full range of specialist departments. Most firms are much smaller, where partners and qualified staff share the full range of work.
Auditing
Auditors don’t prepare accounts; they examine those prepared by someone else. They ask searching questions and check supporting documents.
By law, the accounts of every limited company whose turnover exceeds a certain level must be certified “true and fair” by a qualified accountant.
You can gain Registered Auditor status and audit the company accounts of private limited companies and firms with limited public liability (Ltd. and Plc. respectively) by qualifying with a professional body recognised for the purpose of company audit. Auditing fees account for a substantial part of the earnings of accountancy firms.
Taxation
Some accountants specialise as advisors on taxation. Taxation levels are liable to change with every new budget, so the accountant has to study the subject continually.
Management consultancy
Accountants in management consultancy advise on how firms may become more profitable. As well as looking at a firm’s records and bookkeeping methods, the accountant considers the overall organisation and management, provides general business advice and suggests improved ways of doing things. Accountants also work in corporate finance, previously the province of the merchant banks.
Other work
This might include dealing with receivership, insolvency, executorship, trusteeship, statistics, and company secretarial and registration work.
Accountants often move from public practice into industry or commerce or vice-versa.
Industry & commerce
The success of an industrial or commercial concern is very much tied up with economics, i.e. budgeting, cash flow, cost control and accounting systems.
Director, company secretary, chief accountant, chief executive, financial adviser, management accountant and internal auditor are just a few of the possible job titles for accountants in industry or commerce.
Accountants in industry form an important part of the management team. Sophisticated computer systems are widely used to store and analyse financial information quickly and accurately.
Financial accounting
This area is concerned with keeping records of monetary transactions. Tasks include the setting up and supervision of a firm’s internal audit, preparing the accounts and reports for directors, protecting the firm’s assets and investments, and preparing share prospectuses in order to raise new capital. Wages, salaries, taxation, expenditure and invoices are also handled in this section.
Management & cost accounting
Budgetary control, forecasting needs and expenditure monitoring are the main tasks. The work may also include analysing and comparing costs, explaining financial information to non-financial managers and preparing management reports.
To cost a job, service or operation, calculations must include a price element covering labour, materials, machinery, buildings and fuel.
Other specialisations
Treasury management involves sophisticated financial housekeeping; for instance, ensuring the best borrowing rates, keeping stock-piling and debts to a minimum, streamlining invoicing procedures and investing the firm’s money. Tax management and pension fund management can also be separate jobs.
Accountants trained in industry and commerce can do similar work in public services (e.g. local or national government) or move sideways into fields such as management consultancy.
Public Sector
Running our many public services costs a great deal of money; we all pay for this through national and local taxation. Accountants in the public sector, who may be known as financial managers, play a key role in the administration and the use of this money.
Health authorities, local government authorities and central government organisations provide a major source of employment for accountants.
Government finance
Much of this work is similar to that in industry and private practice, but there tends to be far greater involvement with financial investigations. Other duties relate to contract costs, auditing government-owned establishments, budgeting and financial control.
Accountants advise their non-professional colleagues on management accounting and cost control systems, and often progress during their career to top positions in the more general field of management.
Local government
Accountants in local government require a wide range of professional skills, and specialised knowledge of the role and functions of local authorities. Local authorities’ responsibilities include fire services, transport, education, recreation, cleansing services, parks and gardens, housing and social services.
Each departmental head makes a case for improved services and resources. Negotiations must be handled tactfully and fairly.
Public bodies
Increasingly, organisations like health authorities and public utilities operate on a commercial basis, with an internal organisation similar to that of a large industrial concern.
Financial managers working in these circumstances therefore have comparable duties with those working in industry. Accountants working in public bodies need to follow a strict code of accountability.