While it is certainly true that most people are at least vaguely familiar with the basic principles of accounting, you would be hard pressed to find one in ten that can answer the question, ‘What does an accountant do’? As there are a number of very different fields of expertise, this confusion should not really be much of a surprise.
With that being said, accountants, in general, help companies run efficiently by ensuring that the financial records of the company are properly recorded and represent, in all material aspects, the current financial position as of a specified point in time. To do so, accountants will typically prepare, analyze, and verify financial documents for the company’s management, banking institutions, or regulatory bodies such as local, state, or federal governments.
Within the field of accounting, however, there are four distinct fields of expertise that warrant mention; internal auditing, public accounting, governmental accounting, and managerial accounting.
1.Internal Auditors
The primary function of an internal auditor is to ensure that a company’s internal controls are functioning as designed. By testing the controls that have been established by the company’s management, internal auditors help reduce, if not prevent, the likelihood of fraud. Furthermore, as these accountants generally have unrestricted access to the company’s finances and IT infrastructure, they will often recommend additional control procedures if necessary.
2.Public Accountants
When the average person wonders, what does an accountant do, public accounting is typically the image that comes to mind. Due to a number of high profile accounting scandals, however, the field of public accounting has taken a beating with the media during the past decade. The public, in general, is under the erroneous belief that public accountants should catch every instance of fraud or financial mismanagement.
In all circumstances, the financial statements of a company belong to the management of that company. It is the public accountants responsibility to test these client prepared statements and to give an opinion on whether or not these statements represent, in all material aspects, the true financial position of the company. Additionally, many public accountants also consult with their clients to provide additional tax, auditing, or accounting guidance.
3.Governmental Accountants
Governmental accountants typically audit companies that have business activities that are subject to local, state, or federal rules or regulations. These accountants ensure that government contracts have been properly completed and that all funds designated for specific purposes have been used as intended. Furthermore, agents that are employed by the Internal Revenue Service can also be considered governmental accountants.
4.Managerial Accountants
Managerial accountants, also known as private accountants or cost accountants, prepare, record, and analyze the financial records for their employers. Typical responsibilities include preparing journal entries, preparing budgets, managing fixed assets and inventory, and managing the various costs associated with running the business.
As you can see, the field of accounting is extremely complex and diverse. An accountant’s typical responsibilities truly depend of what area of expertise they elect to pursue. Regardless of the specific nature of an accountant’s field of expertise, most have earned at least a bachelor’s degree in accounting. Additional certifications are available for those individuals that wish to progress beyond the responsibilities of the traditional accountant.
