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You Pick: Management Accounting Or Public Accounting?

By Eric Anderson

Which is for Me? Yes, these are both accounting fields but they are radically different.

When you think of accounting and what accountants do all day long, you may actually be thinking of public accounting. It is a fairly straightforward concept: accounting to help the public. If you are a public accountant, you might: * Prepare tax returns. * Prepare profit and loss statements for a client or a small company.

* Prepare and audit financial statements for clients. * Evaluate the financial statements of a publically traded company before your client invests his or her hard earned money. If you are working for one of the small public accounting firms, you might support a small business client, a sole proprietorship, or a partnership. If you are employed by one of the Big 4 public accounting firms, you would work for: * PricewaterhouseCoopers, * Deloitte and Touch, * KPMG or * Ernst & Young

where you would audit and perform tax accounting for the largest corporations which are publically traded. If public accounting warms the cockles of your heart, you should consider becoming a Certified Public Accountant. After you complete your bachelor’s degree (and in 46 states, an additional 30 semester hours), you can focus on passing your CPA Exam. Becoming a CPA is the Holy Grail for most public accountants.

But wait, you ask, “What do management accountants do all day?” If you like to solve problems, be actively involved in a company’s internal audit structure, and apply that knowledge to assist in decision-making, then have we got the perfect career for you! You are going to be the next great management accountant! As a management accountant, you will use the audit data to make decisions about capital investments and the company’s budget-decisions critical to the company’s staying viable in the market.

Management accountants have their own version of the professional Holy Grail: the Certified Management Accountant (CMA) designation. Like the CPA Exam, the CMA Exam is uniform: it is the same test whether you take in Fayetteville, New York or Fayetteville, California. The difference is that California and New York may have different requirements for you meet before you sit for either exam. Is it worth it to go after the CPA or the CMA? Yes, absolutely!

* Expanded job pool: Right now, the U.S. has double digit unemployment which compresses the job market downwards. Managers are now selling tee shirts to tourists. The people who used to sell tee-shirts are working at McDonald’s. One small McDonald’s just had 150 people apply for 1 job! A CPA can always get a job as an accountant and always make a good living, no matter what the economy looks like. * The reverse is not true. A CPA can take any accounting job but an accountant cannot step into a CPA’s job. Therefore, the pool of jobs for accountants is smaller than it is for CPAs. Being a CPA is a great way to survive in a tough economy.

* Most large firms will not promote you above a certain level (the proverbial “glass ceiling”) unless you are a CPA. If you want to move into upper management, you better be a CPA!

* CPAs have higher salaries than accountants. Go to Payscale.com and compare the salary of an accountant and a CPA in the same city, with same degree, same size firm and work, and the same number of years of experience. If you compare two people in Edmond, Oklahoma with five years of auditing experience after college, the CPA makes $13,772 more per year than the accountant-and that’s comparing the median salaries! Top salary for a CPA with 5 years’ experience is $73,723 while the accountant tops out at $52,685-a difference of $21,038!

Now is getting that CPA designation worth it to you if you can earn $21,038 more in one year? I’m leaning towards “yes.” Multiply that by 40 years and that’s $841,520-to which you can add promotions, merit raises, cost of living raises, and a multitude of other monetary bonuses, making the earnings gap even wider.

That means that there will be even more opportunities to get into a great work environment in the accounting profession. As a CPA, you will have your pick of the best jobs but to do that, you have to pass the CPA Exam.

Public Accountants: A Public Accountant is NOT a Certified Public Accountant: they are two separate designations. A Public Accountant is a designation for a person who provides tax preparation, auditing, consulting, accounting and related financial services to the general public, corporations, government agencies, and non-profits. Public accountants advise federal, state and local government departments on how proposed legislation might affect society.

Certain states offer a designation which not so rigorous in its qualifications. This is called the Public Accountant (PA).

Many states no longer accept new applicants for this designation. As of 2010, only 10 states continue to offer the designation to new qualified members. The National Society of Public Accountants is their national association.

A Public Accountant may decide to add the Certified Public Accountant designation because CPA is more widely recognized, garners a higher salary, and has more career options.

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Article kindly provided by UberArticles.com

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Article Citation
MLA Style Citation:
Anderson, Eric "You Pick: Management Accounting Or Public Accounting?." You Pick: Management Accounting Or Public Accounting?. 23 Jul. 2010. uberarticles.com. 18 Sep 2015 <http://uberarticles.com/business/you-pick-management-accounting-or-public-accounting/>.

APA Style Citation:
Anderson, E (2010, July 23). You Pick: Management Accounting Or Public Accounting?. Retrieved September 18, 2015, from http://uberarticles.com/business/you-pick-management-accounting-or-public-accounting/

Chicago Style Citation:
Anderson, Eric "You Pick: Management Accounting Or Public Accounting?" uberarticles.com. http://uberarticles.com/business/you-pick-management-accounting-or-public-accounting/


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