ACCOUNTING

 

Accounting

Accounting or accountancy is one of the most important fields of finance and is considered as the pedestal of all other fields in the finance sector. Accounting is the branch of commerce which deals with aspects such as summarizing, reporting and analyzing financial transactions to keep financial records. It is the study of how businesses track their income and assets over a period of time. Accountancy is related to dealing and maintaining records of all daily financial transactions happening in business to estimate the success or failure of a business.

Growing economic and commercial activities, has made accounting an integral part of our everyday lives. Any business requires an accountant who would be responsible for maintaining books of accounts. Hence, accounting career opportunities exist almost everywhere, and accountants are in high demand whether it is a new business, big or small, home-based business, corporations and government organisations. The services of accountants are required by all organisations as they must maintain systematic records of all transactions for the purpose of planning activities, managing and furnishing tax returns. Without this department, recording financial transactions, proper maintenance of staff salary and books of account, balance sheets preparation, calculation of various taxes etc is not possible in a firm. Most decisions related to present and future projects are based on the financial records of a concern. Accounting is an important field not only in business but also in every day life of common man. People use accounting skills while making decisions related to finance and investment options.

With IT boom, computer has occupied almost every field and in this scenario even accounting is not possible without computers. This has increased the importance of computerised accounting. Specially designed accounting software like Tally is used by firms to ensure speedy and accurate accounting.

Accountants assess the present and future economic activities of individuals, businesses, non-profit organizations and governmental bodies. Accountants manage many tasks besides preparing financial statements and recording business transactions. Key areas of accountants work are audit, budget analysis, taxation, management accounting, financial accounting etc. Auditing, an important feature of each and every business, involves checking of books of accounts. Budget analysis is developing and managing the financial plans of an organisation. Taxation involves preparing tax statements for particular individual as well as business concern. Management accounting involves preparing an analysis of the assets. Financial accounting means analyzing and recording the transactions and financial statements.

Within the field of accounting, there is another option called Forensic accounting. Forensic accounting is the practice of utilizing accounting, auditing and investigative skills to assist in legal matters. Forensic accounting involves Investigative accounting i.e legal investigation and analysis of financial documents of any firm or client, who is involved in a legal dispute of a criminal nature such as insurance fraud, employee theft etc. and Litigation support which deals with the calculation of economic damages or loss resulting from a breach of contract.

Career areas like Chartered Accountancy, Company Secretary, Banking, Actuary, Cost and Works Accountants are related to accountancy. These are advanced fields in accounting which require specific qualifications. However to enter a career in accountancy which is an important field of finance, the basic qualification needed is only a bachelors degree in commerce.

Accounting : Eligibility

Educational

The basic educational qualification for pursuing a career in Accounting is taking 10+2 with Commerce as the main subject, followed by a bachelor degree in Commerce. For Post graduate courses such as M.Com one needs to have B.Com at graduate level. Along with subject specialisation computer literacy is also essential. One must take a course in computer accounting software's such as Tally or some other related diplomas. One can further take up more advanced positions by doing ICWA, CA, Company Secretary ship or an MBA in Finance. After bachelors degree in accounting, one can also go for diploma or certificate course in Forensic accounting. Some institutes offer Forensic Accounting as part of the Law degree.

Personal attributes

Accountants should have an aptitude for mathematics and be able to analyze, compare and interpret facts and figures quickly. They must be able to communicate well and have an eye for detail. Familiarity with computerized accounting is essential. They must be able to work as a team. Must have high standards of integrity and accuracy as major decisions are made based on financial statements given by them.

Accounting : Job Prospects & Career Options

As the economy grows and the number of businesses increases, more accountants are required to set up account books, prepare tax returns and provide management advice regarding financial matters. Accountants are always on demand and a diverse range of exciting careers are available for accounting graduates to choose from. 

People can start their career as a junior accountant and can reach various top level positions such as Senior accountant, Chief financial officer, auditor, budget analyst, financial manager, tax consultant etc. An accountant's work can range from auditing, which is the formal analysis of an organization's financial statements, to the daily bookkeeping that ensures the accounts are maintained correctly. Places where they can find work include public accounting firms, government departments, non-profit organisations, private firms etc. They could also start their own accounting or auditing firm. 

The four major fields of accounting are:

Public accountants - Public accountants work with different clients to assist their accounting needs. They provide accounting services to individuals, businesses and governments. As a public accountant you will focus primarily on tax functions and auditing. They advice on the most effective use of financial resources.

Management accountants - Management accountants also called industrial, corporate or private accountants. Their main responsibilities involve cost management, budgeting, asset management and performance evaluation. Management accountants analyze and interpret financial information and assist to make sound business decisions. 

Government accountants-Government accountants may work at the local/state level or the central level, administer and formulate budgets, track costs and analyze programs. With this position, you work in a variety of government departments such as the Internal Revenue Service, Department of Defence.

Internal Auditors- They conduct audits to ensure compliance with accounting laws and working to make sure that accounting information systems are up to the standard. Verify the accuracy of financial reports and guard against waste or fraud in company operations. Specifically, they examine and evaluate their firms financial and information systems, management procedures, and internal controls to ensure that records are accurate and controls are adequate to protect against fraud and waste. 

Options available in this field are that of

Auditors - The job of the auditors is to ensure the credibility of the financial accounting data and financial statements in private sector companies as well as public sector companies. Work in audit involves checking accounting ledgers and financial statements.

Budget and credit analyst- Budget analysts are responsible for developing and managing an organizations financial plans. They forecasts expenditure incurred, analyses records of present and past operations. There are many opportunities for a budget analysis accountant in private as well as government agencies.

Financial accountant- Financial accountants draw information from the general ledgers to prepare financial statements. The core function of a Financial Accountant involves analyzing and recording business transactions, financial statements, with information from the ledgers by preparing general ledger accounts, trial balances etc.

Tax accountants-  Tax accountants prepare corporate and personal income tax statements and formulate tax strategies. Based on their statement financial choices are made as how to best treat a merger or acquisition, deferral of taxes, when to expense items and the like. They clarify current tax laws to clients, advises on ways to avoid tax by smart investments and assists businesses in calculating annual tax returns. They need to have a thorough understanding of economics and up-to-date information on the tax code and laws of the country. 

Management accountant - Management accountants work in companies and contribute to decisions about capital budgeting and business analysis. Major functions include cost analysis, analysis of new contracts and participation in efforts to control expenses efficiently. They work along with marketing and financial managers to take business decisions.

Teachers/Lecturers- Teaching is another noble profession. If you have a knack for teaching and the required qualification, you can work as professors, or as researchers in universities or colleges. Pursuing BEd, MEd, M. Phil or passing the NET Exam can give an edge for those interested in teaching. 

Forensic accountant - Forensic accountants  frequently work for public accounting firms, banks, the IRS (Indian Revenue Service), insurance companies and law firms.