As lending standards, audit regulations, and financial laws become more meticulous, accountants with an advanced degree and more refined skill set will find themselves in demand.
The Changing Role of an Accountant
Remembrances of unfortunate accounting headlines, such as those involving Enron or WorldCom, are finally starting to fade as investors rebuild their trust in the financial sector. The role of accountants continues to evolve into a position of increasing worth and value. Accounting has transformed into an integral part of not only the financial side of business, but as a valued component of the decision-making process within an organization.
The Accounting Scandal
A sequence of unions and closures between 1989 and 2002 turned the Big Eight into the Big Six (Ernst & Whinney merged with Arthur Young, forming Ernst & Young, and Deloitte Haskins & Sells merged with Touche Ross, forming Deloitte & Touche). It then turned into the Big Five when Price Waterhouse merged with Coopers & Lybrand. It finally became the Big Four, when Arthur Anderson lost all of its clients following the Enron and Worldcom fiascos. Ethics became a primary focus for the accounting industry in 2001, and new regulations required accounting professionals to broaden their financial and business ethics knowledge.
- The Sarbanes-Oxley Act (“SOX”), passed in 2002, was enacted to put an end to deceptive and defective financial reporting. The act also gave life to a new governing board of regulations, the Public Company Accounting Oversight Board (PCAOB). The most relevant component of the SOX Act was its provision requiring chief executives to put their name on their company’s records, guaranteeing that all financial statements given to investors were genuine and complete.
- The effects of Sarbanes-Oxley meant a more complex job for the public accounting firms charged with auditing companies’ books, and that cost caused some smaller accounting firms to cease their engagement in the audit of publicly traded clients.
- The Sarbanes-Oxley Act caused uproar in the accounting world, as it exposed much more disorder and fraud in the books of the nation’s largest corporations. Accounting firms had to quickly learn the new regulations and staff up to handle the new wave of business.
- In May 2007, the SEC eased some requirements to reduce costs in achieving compliance, but any substantial modifications to the new laws seem improbable at this time.
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The New Role of the Accountant
While the accounting scandals of the past have caused the enforcement of new stringent regulations, the upside is a new appreciation for accounting professionals who influence core decision making at their businesses. Security regulations aren’t only affecting bookkeepers and accountants; they’re starting at the top, creating a new necessity for well-educated and highly sophisticated accountants to aid in the decision-making process and corporate ethical adherence.
Beyond accumulating data for presentation to management, accountants are tasked with in-depth analysis of both the company’s financial aspects and the performance of the business as a whole. This emphasis on strategic contribution in accounting requires skills sets that may not typically be related to finance, including:
- In-depth operational knowledge of the financial technologies in an organization
- Leadership abilities
- Comprehension of the expansive business environment
- Effective communication skills
A Good Time for Accounting
Accounting firms are not only increasing staff sizes to deal with increased business resulting from more demanding regulations, but also in preparation for a predicted impending talent shortage in the coming years. The U.S. Department of Labor’s Bureau of Labor Statistics forecasts a 16 percent growth in accounting jobs by 2016, but the number of qualified accountants is declining. Top accounting candidates will find themselves in the center of aggressive recruiting from top agencies, and sharpened accounting skills can push a candidate to the forefront of recruitment lists. Accounting professionals pursuing a new career will find more success when mixing age-old professional practices with new ideals, such as International Financial Reporting Standards (IFRS) and principals-based accounting methods.
Professional licensing is crucial in the accounting field, including the traditional Certified Public Accountant (CPA), as well as other designations such as Certified Management Accountant (CMA) and Certified Internal Auditor (CIA).
Opportunities in Accounting
Employing new skill-sets and higher education, accounting professionals can choose from a diverse list of financial and accounting sectors for employment, including:
- The Big Four – The elite accounting firms work with Fortune 1000 companies. With billions of dollars in revenues and thousands of employees, the prestige surrounding these four firms is a powerful indicator on a resume when moving on to another position. These are the most prestigious employers for accounting graduates. The primary focus of the Big Four firms is the confirmation of the accuracy and truthfulness of clients’ financial records. Work can also include risk analysis and merger/acquisition guidance.
- Public Accounting Firms – While the Big Four leads the accounting realm in professional reputation, many other national accounting firms provide excellent service to clients and wonderful employment opportunities for prospective accountants. Working with a smaller firm can allow for faster internal upward mobility and more varied work assignments.
- Internal Audit Outsourcing – Organizations sometimes prefer to outsource their internal audit requirements to a third party, and this type of work is ideal for accounting professionals that enjoy variance and working under a contract umbrella.
- Government Accounting –If working on a more national level is desired, governmental accounting opportunities are available for qualified individuals, including work in the Internal Revenue Service, the Department of Defense or the Securities and Exchange Commission. Government accounting professionals work to formulate and control budgets at the state and federal levels, in addition to tracking costs and examining publicly funded programs. Government accountants at the state and federal levels formulate and administer budgets, track costs, and analyze publicly funded programs.
The role of the accountant continues to be an indispensable resource within an organization’s financial structure, having moved from working with facts and figures to aiding in critical decision making and future financial planning. The demand for qualified accountants continues to grow in contrast to a slow decline in the number of available accounting professionals. There has never been a better time to find success in this changing field.