It is an Exciting Time for Accounting Majors.
Understanding and measuring how businesses perform is rooted in understanding accounting. Accounting can be defined as "organizing financial information into a cohesive and understandable presentation for multiple uses." Think about it. How many ways do accountants organize financial information and for what types of uses? There are the obvious answers such as issuance of financial statements and preparation of tax returns, but what about the valuation of a business and forecasting or projections for company financing (IPOs, private placement, venture capital funds, among others). More importantly, we, in the accounting profession are providing advice to our clients, that is to say, helping businesses improve. You, as an accountant, will always have to be good with numbers; however, you are now required to have good interpersonal skills because accounting is becoming more consulting-oriented. The ever-increasing need for technology and consulting skills has transformed how we do business and has expanded the role of the accountant in today's business environment. The "bean counter" is gone. There are multiple opportunities available for you to take advantage of.
The United States Department of Labor, Bureau of Labor Statistics (BLS) office, reported in 1998, accountants and auditors held approximately 1,080,000 jobs with roughly every one out of four in public accounting. Overall, job opportunities for accountants and auditors are projected to grow between 10 to 20 percent through 2008. That means there will be over 200,000 new accounting jobs waiting for you. African-American students can and should take advantage of this need. Bert N. Mitchell, founder and chairman of the firm, Mitchell & Titus, LLP, wrote in a revealing article over three decades ago for the American Institute of Certified Public Accountant (AICPA) Journal of Accountancy, "African-American certified public accountants numbered .15% of all C.P.A.s in the United States." In later updates of that same article slightly over a decade ago, Mitchell stated, "The number of African-American C.P.A.s has grown steadily; however, we continue to represent less than 1% of the accounting profession compared to other professions like law or medicine." Today, minorities represent roughly 5% of all C.P.A.s in the United States and the AICPA has made a major commitment to improving this situation. Not only are the major firms noticing and understanding the importance of diversity, but also minority firms are thriving and providing an alternative to the typical avenue in public accounting.
The BLS list for accountants includes appraisers, actuaries, underwriters, financial analysts, tax and revenue agents, and, of course, auditors. Accountants are also being recruited by law enforcement agencies such as the Federal Bureau of Investigation. Others are going into securities sales, healthcare and fraud auditing. Because many of the job opportunities available to accounting graduates are so closely related, it is easy to change your accounting focus throughout your career.
Some of the most dynamic business changes have been occurring in the accounting profession. When I started my career some 14 years ago, there were eight major C.P.A. firms. Very soon, they became the "Big Six" and today, after three significant mergers, they are known as the "Big Five," consisting of: Ernest & Young LLP; Arthur Andersen; KPMG (Peat Marwick); PricewaterhouseCoopers LLP; and Deloitte & Touche LLP. It would be no surprise to see only three major firms in the not- too-distant future! This does not mean jobs will be lacking. To the contrary, these firms are responding to the demands of an ever-increasing global economy through expansion of their services and capabilities. In addition, businesses such as American Express and H&R Block are taking advantage of new laws that allow non-C.P.A. firms to provide certain accounting services. This "One-Stop Shopping" approach is a trend that is rapidly changing the way we "full-time accountants" do business. Where does that leave non-Big Five firms? Accord ing to Anthony S. Kendall, managing partner of the New York office of Mitchell & Titus, LLP, "The Big Five firms will continue to service the majority of the world's larger companies and small C.P.A. firms will service smaller businesses and individuals. The market in between is vast. C.P.A. firms servicing this middle market will become niche-oriented, that is, developing strong specialties in a few unique areas such as employee benefits, not-for-profits, and midlevel commercial businesses, to name a few."
The profession is re-inventing itself constantly trying to meet global demands. The focus is no longer on auditing and tax work exclusively. The term "assurance" is what is being touted. Providing assurance services to clients can mean a multitude of different services from annual audits to internal control outsourcing to litigation support. More importantly, the overall theme is about being an advisor with in-depth insight into the operations of the business and not just from the narrow view of an outside consultant. However, firms are also reacting to changes by the Securities and Exchange Commission (SEC) to prohibit audit firms from providing certain non-audit services. The SEC is focusing on enhancing audit quality and auditor independence. As a result, firms have already spun-off or reorganized their partnership structure by separating the consulting components to respond to new market demands and to comply with the SEC's new rules. C.P.A. firms are even considering initial public offerings of non-audi t businesses to finance their expansion into other business lines, development of venture capital funds and continued technological growth.
The Certified Public Accountant (C.P.A.) examination is an extremely important aspect of your future as an accountant. Candidates must now have 150 hours of college study to take the exam in 17 states and other states have adopted similar legislation that will soon take effect. Although the additional 30 hours of study can be burdensome, there are beneficial and strategic ways of taking advantage of this time. Enhancing or improving your business skills in key areas is vital in today's marketplace and critical to your future success. Consider taking classes in business writing, oral presentations and marketing. These skills sets will enhance your value in a competitive marketplace.
The newly expanded role of the accountant will require you to increase your knowledge base in other business disciplines such as finance and information systems. Beta Alpha Psi, the scholastic and professional accounting fraternity is "aligning with organizations" to be in a better position to address "emerging trends in business education and corporate hiring practices." This is based on professional service firms expanding their hiring criteria since clients need more diverse services. "We encourage our recruits to take more diverse classes to expand, not only their college experience, but to increase their business education," says Derrick A. Roman, an African-American partner at the Big Five accounting firm of PricewaterhouseCoopers LLP. "Selecting classes to enhance skills such as critical thinking, problem solving, and communication will go a long way in helping one be successful in today's business world."
Consideration should also be strongly given for internships. Internships allow you to gain experience and, more importantly, determine if the accounting profession is the right fit. Public accounting can be stressful, while working within an accounting department of a small company might offer a more conductive and flexible atmosphere for some. Early and frequent internships will allow you to see multiple business environments and ultimately choose the one that is right for you. Companies get to know you, your capabilities and skills and, to a potential employer, job experience can be as important as a high grade point average. I participated as a mentor in the INROADS program during my days at PricewaterhouseCoopers and now at Mitchell & Titus, LLP., INROADS offers minority students an opportunity to gain work experience at various companies and is just one of the many excellent internship programs nationwide. I strongly encourage you to explore the internship programs available at your college or universit y.
The typical first accounting job is in public accounting, either as an auditor or tax accountant. With solid training and increasing exposure to a variety of businesses, public accounting offers a unique way of seeing how businesses work. For the budding entrepreneur, public accounting provides the opportunity for exposure to numerous financial operations and the enhancement of business knowledge. Accountants have an advantage because these types of business experiences give them tremendous insight into the inner financial workings of their client's businesses or their companies (in private industry). These career experiences will allow you to carefully plan and direct your long-term career path whether it is to pursue a partnership with a public accounting firm, move into other high-level positions in private industry or start your own business.
While conventional wisdom dictates that the typical career path into public accounting starts with one of the larger firms for maximum flexibility, a career with a minority firm offers a unique professional opportunity for you. The attitude and atmosphere is certainly different and may offer you, as a minority student, comfort zones to enable your growth into the professional you envision. Certainly, I do not discourage working for a Big Five firm. At Mitchell & Titus, the majority of my partners, including myself, spent their early careers at Big Five firms; some were even partners at the Big Five. However, minority-owned C.P.A. firms such as Mitchell & Titus, LLP, Bert Smith & Co., Williams & Adley, LLP, Watson Rice LLP, to name a few, offer high-quality opportunities and diverse career paths.
Moreover, accounting majors have many more options than just public accounting. The College Majors Handbook lists the top ten occupations for accounting majors:
1. Accountants, auditors, financial specialist
2. Top and mid-level managers, executives, administrators
3. Accounting clerks, bookkeepers
4. Other management-related occupations
5. Insurance, securities, real estate, business services
6. Other administrative positions
7. Sales occupations
8. Other marketing and sales positions
9. Computer systems analyst
10. Other computer and information science occupations
There are other areas to pursue as well: healthcare, forensic accounting and, of course, Internet and information technology. Continue to put yourself in position for the best job opportunity. Develop the skills necessary to be a successful business professional such as strategic thinking, critical analysis, taking responsibility, communication and leadership skills. Also, remember that honesty and integrity, which may seem basic and commonplace, are not only very important virtues, they are primary qualities employers look for when evaluating a potential hire.
Competition among private and public firms/companies for qualified accounting graduates has led to increases in compensation for entry-level positions all the way to senior-level positions. Average salaries for positions at public accounting firms are:
* Entry-level - $30,000 to $36,000
* Senior accountants - $41 ,000 to $47,000
* Managers - $54,000 to $70,000
* Partners/Directors - $70,000 to $100,000 and up.
The private industry salaries for comparable positions are:
* Entry-level - $31,000 to $35,000
* Senior accountants - $40,000 to $52,000
* Corporate tax managers - $80,000 to $110,000
* Corporate controllers - $75,000 to $150,000 (depending on the sales' volume of the company)
* Chief financial officers - $100,000 to $350,000 and up (depending on the sales' volume of the company).
As you can see, the simple principle of supply and demand has driven the salaries to higher levels to meet the increasing need for quality accounting professionals. It is an exciting time for accounting majors. The degree opens many doors; you just have to walk through them.
Darrell K. B. Giles is the managing partner of the Washington, D.C. office of Mitchell & Titus, LLP, the largest minority-owned CPA firm in the United States with offices in New York, Philadelphia, Washington, D.C. and Baltimore.
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|Author:||B. Giles, Darrell K.|
|Publication:||The Black Collegian|
|Date:||Feb 1, 2001|
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