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Accounting: An Introduction

By Yann, published on 11/01/2019 We Love Prof - AU > Professional Development > Accounting > An Introduction To Accounting

The life of an accountant isn’t one that is envied by many, but little do people know just how rewarding being in accounting careers can be and how much scope for professional progression there is in this career path, without the need to study for several years to gain certification and spend lots of money on tuition fees.

A reliable, varied, well-paid job with scope to progress quickly and no student debts… those wishing to pursue a career in accounting are seriously onto a winner!

This is because becoming an accountant is relatively straightforward (if you have the skills) and it doesn't cost an arm and a leg to qualify. Accountants will more often than not have a great work-life balance with little or no financial worries. Photo credit: Rawpixel Ltd on Visual Hunt

Below we will look at what it means to be an accountant, the different areas in which you can qualify and what jobs you could do as an accredited accountant with an accounting degree or accounting major.

But first, what do you need to become an accountant in terms of knowledge and skills?

Prerequisites and Desired Qualifications For Becoming An Accountant

If you have good numeracy skills, are good at managing money and can analyze figures and information systems then a managerial accounting career (i.e becoming a certified public accountant), bookkeeping position, or accounting clerk could be among the perfect jobs for you to pursue. The ability to understand accounting practices and abide by the generally accepted accounting principles is a must for anybody working at accounting firms or in the corporate accounting and public accounting worlds.

You do not necessarily need a degree in accounting or a business degree to do accountancy work in public accounting firms, which makes it a much more accessible job than some others that expect applicants to have the highest possible level of qualifications. However, you do need an AAT as a minimum prerequisite qualification, which can be complemented with various other diplomas, accounting certificate and accounting degrees.

Those with career goals of having accounting as their business environment, therefore, will be relieved to know that they can major in accounting without spending years studying at university campuses and it costing them a fortune.

In some areas, however, a higher learning degree is desirable, or at least it is deemed very useful. Maths and/or economics are classed as highly advantageous, especially as careers in accounting are in high demand.

There is a range of different qualifications you can take and paths to go down you in order to earn the title of an accountant.

Desirable qualifications include:

  • A level maths
  • A level economics
  • BTEC business studies

What Is Accounting?

Accountants are absolutely vital to the running of all businesses, though they often crunch numbers in the background and are overshadowed by numerous other departments or professional individuals.

Their main job is usually to analyse and provide trustworthy information about financial records, in an ethical and unbiased way. This could have them working in various areas of the financial sector including taxation, financial reporting, forensic accounting, corporate finance, auditing, business recovery and insolvency, or accounting systems and processes.

Depending on what area of accountancy you choose to specialise in, you will, as a rule of thumb, be governed by the generally accepted principles of accounting. Typical daily tasks of an accredited accountant could include:

  • The management of financial systems and budgets using spreadsheets and accounting programs
  • Undertaking financial audits: i.e. an independent check of the company’s financial position and how this is reported
  • Liaising with clients to provide financial information and advice

You can have internal audits or external audits (performed by an external body). An auditor will put together reports of a company’s financial situation. Photo on VisualHunt.com

What does a chartered accountant do?

Chartered simply means that you are qualified in a specific field, so whether you’re an accountant, surveyor, or engineer, being ‘chartered’ means you’re a member of a professional body with a royal charter, such as ICAEW.

Types of accountancy

There are two principal types of accountancy: financial and management accountancy. See below what professionals in these two areas do on a day-to-day basis.

Management accountants

Management accountants work internally to provide financial information. For example, they often provide details to management to aid them with their decision making.

A management accountant might get involved in performing tasks such as budget analysis, financial planning and forecasting. The emphasis of management accountancy is on forward-planning: i.e. achieving financial goals and planning finances based on budgets.

Financial accountants

Financial accountants provide information for external bodies, such as shareholders, investors and creditors.

Financial accountants focus more on the act of summarising a company’s current financial position, reporting on very important information like the company’s profitability, liquidity, solvency and stability. Unlike management accounting, financial accounting is required by law.

Many graduates entering the accountancy profession tend to start off in financial accountancy, mainly working in public accounting.

The responsibilities within this area of practice depend on what area of accounting you specialise in, but might include work surrounding:

  • Audit, assurance and advisory
  • Business recovery and insolvency
  • Corporate finance and risk management
  • Forensic accounting
  • Tax

What Is Accounting In A Business?

Have you ever heard of an international business with no accounts team? No.

Have you ever come across a small business with no accountant to manage their finances? We thought not.

Accounting professionals are highly important in almost all functions of a business. It’s not just about reporting income and expenditure and doing payroll, accountants will use their accounting skills to compile financial reports and use statistics to enable them to forecast spending, as well as use existing data in their preparation of budgets and so on.

A certified internal auditor is among one of the many accounting positions you could fill. Audits help businesses to prove that they can manage their assets and means that it is easier for them to borrow money should they need it.

Accountants and bookkeepers prepare and maintain financial records and make sure that financial records are accurate and in line with accounting principles.

Accounting is the backbone of businesses.

The accounting departments in businesses are responsible for knowing where money is at all times, i.e. funds coming in and all of the money going out. This includes employees’ salaries, the various costs of running the building, advertisements, and anything else that comes under this umbrella. Accounting professionals keep everything organised in a systematic way.

Accountant positions encompass a wider range of job functions, no matter the size or nature of the business. While there is a lot of variety in this career, there are also some things that remain the same across all areas and must be followed, such as the golden rules of accounting.

What Are The Golden Rules Of Accounting?

As you’d expect with a field that is determined by accounting procedures, there are some rules that every accounting professional must follow when performing their tasks and duties. The three rules are:

  1. Personal account: Debit the receiver, credit the giver.
  2. Real Account: Debit what comes in and credit what goes out.
  3. Nominal Account: Debit all expenses and credit all incomes and gains.

Various examples of these golden rules of accounting can be found across the web (in online resources or on accounting websites) as well as in books and journals on accounting practices and principles.

Accountants are governed by rules, principles and procedures. Waiting for news on your tax return can be stressful but you can rest assured that an accountant has input all of your details correctly and accurately. Photo on VisualHunt.com

Accounting Institutes

As we’ve discovered, there are some minimal requirements for being an accountant, like having the AAT qualification, however, there are ways to make you stand out from the rest of the accounting applicants. One of the best ways to do this is to apply to become a member of one of the renowned accounting institutes, which represent accounting professionals and provide worldwide recognition for their knowledge, skills and experience.

Below are just two examples of the accounting institutes that can offer you accreditation in your chosen area of study and work.

CIMA

According to its website, “CIMA is the world’s leading, and largest, professional body of management accountants. Our unique blend of management accounting, financial accounting and business-focused subjects produces competent and confident CGMAs who can lead their organisations to sustainable success.

The CIMA Professional Qualification is recognised worldwide as the most relevant global finance qualification for a career in business. If you have relevant education such as a university degree from an CIMA-accredited university, you could start here.

Why CIMA?

We are the Chartered Institute of Management Accountants. The world’s largest professional body of management accountants, with the most useful accounting qualification for a career in business.

Globally recognised

Together with the American Institute of Certified Public Accountants (AICPA), we established the Chartered Global Management Accountant (CGMA) designation in 2012 to provide members with a new level of resources and recognition.

Our journey

The Chartered Institute of Management Accountants (CIMA) was founded in 1919 and is the world’s leading and largest professional body of management accountants.”

ACCA

Finally, ACCA presents itself on its website as “A powerful global presence within the profession, ACCA inspires its members and students towards greater success and prosperity.

With centres across the United Kingdom, members and students have round-the-clock access to a wealth of valuable resources and support.

We’re the world’s most forward-thinking professional accountancy body.
We believe that accountancy is vital for economies to grow and prosper, which is why we work all over the world to build the profession and make society fairer and more transparent.

We have more than 208,000 fully qualified members and 503,000 students worldwide. They’re among the world’s best-qualified and most highly sought-after accountants – and they work in every sector you can imagine.

Organisations know and trust our designation. We’re out there every day, connecting with businesses large and small, governments, educational establishments and opinion formers. We’re on top of emerging trends, legislation and legal requirements, helping to shape them.

Because of all this, we’re able to create the innovative, strategic-thinking accountants our fast-changing world needs.

Our mission and values

We have a mission to be a global leader and a set of values, giving us our distinctive character and defining our approach to the global profession.”

Accounting Classes

If you are interested in learning more about accounting theory through accounting courses like undergraduate programs at universities, then you should look up an institution which offers the examination that you should be preparing for in order to enter the field of work you have set your heart on.

You can usually find details on admission processes for each establishment online, and on completion and acceptance of your application, you would normally be offered further details on semester hours, coursework and exam requirements, if you haven’t had these already.

Most accounting courses will cover the fundamental basics of accounting, accounting standards and the ethics of money within the business world.

You can also find online training for personal and business accounting programmes like Sage, Quickbooks and so on.

If you wish to learn more about the various certifications in accounting, you might like to run an Internet search on the following terms:

  • aacsb
  • acbsp
  • cma
  • board of accountancy
  • mba
  • cpa / cpa exam / cpa examination / becoming a cpa /accountant cpa
  • intermediate accounting ii
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