:max_bytes(150000):strip_icc():format(jpeg)/GettyImages-1412762529-2fb014f1b6534c44bc40e451aad3e66c.jpg)
Accountants and auditors work with a company’s financial statements to ensure they are accurate, up-to-date, and in compliance with various regulatory standards. Here’s what you need to know if you’re considering either of these fields as a career.
Key Takeaways
- Accountants are responsible for preparing financial documents, monitoring day-to-day bookkeeping for a firm’s operations, and/or preparing and filing tax forms.
- Auditors verify the accuracy of financial statements and tax filings and may search for clues as to why some figures don’t quite add up.
- Both accountants and auditors can work internally or as employees of a third-party firm.
Accounting
An accountant is a common career choice for those with an analytical mindset and a desire to work with financial data. An accountant primarily provides in-depth analysis and accurate reporting on financial records, most often completed as a supporting role to a chief financial officer (CFO) or a company’s finance department. Accountants also review financial records for tax filings for individuals and businesses. An individual trained as an accountant has the opportunity to work in a small, medium, or large company in either the public or private sector, as an independent professional at their own firm, or as a consultant or contractor to companies or nonprofit organizations.
Accountants are typically interested in specific and exacting details, day-to-day operations, financial accuracy, and taxes.
Credentials are extremely important for accountants. Entry-level accounting jobs may require a recognized professional title, and advancement certainly depends on it. Pursuing a degree in accounting is a great place to start.
Each field has one dominant professional certification. For accountants, it is the title of Certified Public Accountant (CPA).
Auditing
Auditors verify the work accountants do. They examine the financial statements prepared by accountants and ensure they represent the company’s financial position accurately. Auditors verify that these financial statements, particularly the ones of public companies that are required to be released annually, are assembled in accordance with generally accepted accounting principles (GAAP).
Like accountants, an auditor can work internally for a single company or for a third party, such as a public accounting firm, to audit various businesses. Additionally, many auditors are employed by governments and regulatory bodies, for example the Internal Revenue Service (IRS).
Key Differences
Accounting and auditing draw from the same talent pool and, for the most part, require similar skill sets. However, subtle differences exist.
Accounting requires a person who is more detail-oriented and focused. Small mistakes can cost millions, particularly for large companies dealing with massive sums of money. As an accountant, it reflects poorly on you when an auditor comes in behind you and discovers errors.
Auditors must value attention to detail, but they also need strong investigative skills. In addition to capturing honest mistakes, a good auditor is called upon to detect subterfuge, fraud, and intentional misstatements. The companies that perpetrate such acts are generally good at hiding it, which is why preternatural detective skills are so valuable for an auditor.
Education
Expect to complete at least a bachelor’s degree to put yourself in an auspicious position to succeed in accounting or auditing. While neither career imposes across-the-board educational standards, and both professions employ successful people who did not graduate from college, these people are the exception, not the rule.
Most high-level accountants and auditors, at some point, take and pass the Certified Public Accountant (CPA) exam. To do so requires 150 hours of postsecondary education, which is more than a bachelor’s degree and almost enough to obtain a master’s degree. The Big Four accounting firms—PricewaterhouseCoopers, Ernst & Young, Deloitte, and KPMG—for whom many recent graduates in accounting want to work, generally prefer their new hires to have passed the exam already or, at minimum, be eligible to sit for it.
Skills
Accountants and auditors must be good with numbers. This does not mean a working knowledge of multidimensional calculus is necessary, since calculators and spreadsheets do most of the heavy lifting where math is concerned. Professionals in both careers, however, need to be quick and confident with quantitative analysis. Those who get confused easily when working with numbers, and who make constant mistakes, are going to find both careers frustrating.
The accounting world has long been pigeonholed as a haven for people who prefer the company of numbers to people, but this stereotype is outdated and inaccurate. Under the broad umbrella of accounting are many fields, such as management consulting, that require dynamic, extroverted individuals who can establish rapport with C-suite employees and give confident presentations to boards of directors.
Moreover, accountants and auditors often work in teams to conduct such duties as preparing and reviewing financial statements, tallying inventory, and forecasting future sales.
Starting Salary
The salary range for new accountants and auditors is broad. Where you fall on this continuum depends on several factors, such as education, geographic area, and size of employer. The Big Four firms set the salary benchmarks for the profession, and as of 2023, their salary range for entry-level accounting and audit associates is between $40,000 and $65,000, depending on the factors listed above.
A job with a smaller public firm or an industry accounting position might pay within this range, or it might pay more or less.
Keep in mind that accounting and auditing starting salaries are highly negotiable. If you have multiple offers on the table, this can be used as leverage to get a higher salary from your chosen employer.
Job Outlook
The government lumps accountants and auditors together when forecasting career growth, with the forecast looking strong. According to the U.S. Bureau of Labor Statistics (BLS) Occupational Outlook Handbook, there is an expected 4% growth rate for accountants and auditors between 2019 and 2029.
Job growth in the accounting field closely correlates to the health of the economy as a whole. Stronger-than-expected economic growth could push the numbers for accounting upward, while a deep recession or prolonged period of stagnation might squelch the demand for accountants in the coming years.
What Is a CPA?
Certified Public Accountant (CPA) is a professional credential bestowed by the Uniform Certified Public Accountant Examination and established by the American Institute of Certified Public Accountants. This is probably the most widely known and recognized professional designation in the financial industry.
How Many Hours of Education Does a CPA Require?
A CPA licensure requires 150 hours of college credit.
What Are the Big Four Accounting Firms?
The Big Four accounting firms are PricewaterhouseCoopers, Deloitte, Ernst & Young, and KPMG.
What Do Accountants Do?
Accountants prepare financial statements, which include the balance sheet, income statement, and statement of cash flows.
Beyond this, there are myriad additional duties that an accountant might perform, such as bookkeeping, tracking expenses and revenues, forecasting future profits and cash flows, and tax preparation. An accountant could be a dedicated employee of a company or work for a third party hired by businesses to manage their books and prepare their taxes.
The Bottom Line
For a recent grad or young professional who is ambitious, detail-oriented, and quantitatively inclined, it is difficult to go wrong with either accounting or auditing. Subtle distinctions in your interests and personality type will likely determine which career path will ultimately be more satisfying. If creating things from piles of raw numerical data sounds like a fun way to spend a day, lean toward accounting. If, on the other hand, taking someone else’s creation and picking it apart looking for errors and inconsistencies sounds more exciting, a career in auditing can give you what you desire.
It is also worth noting that both career paths offer strong income potential, above-average job security, and plenty of upward mobility. As for which one can lead to a more successful and satisfying career, that depends largely on your specific goals, personality, and skill set.