What Are the Different Types of Accounting?

Posted by BUOnline on January 07, 2019  /   Posted in Accounting

Woman at desk with laptop and calculator | types of accounting Students and career-changers may be surprised to learn about the different types of accounting jobs. To the average person, accounting is a relatively straightforward employment area. There is little variety in the field’s career titles and day-to-day tasks that accountants perform.

That’s hardly the case. Accountants do more than prepare and examine financial records. They help organizations solve real-world finance and tax issues, trace criminal activity in the forensic sector and serve as a valuable resource for the public. Another attractive aspect to accounting is that it’s an in-demand and rather lucrative career option.

Types of Accounting

The following sections list some primary types of accounting specialties.

Financial Accounting

Financial accounting is focused on the analysis and reporting of financial transactions in businesses.

Accountants in this field are responsible for the public reporting of their organization’s financial status. Typical responsibilities include collecting and maintaining data, detecting financial trends and forecasting future needs. Financial accountants are primarily concerned with providing information to parties outside the organization. However, they can help relay financial information to leaders at the company.

Professionals in this field can pursue job titles like financial accountant, controller, financial analyst and financial manager. Industries and job environments vary significantly, with financial accounting professionals working with the corporate and nonprofit world as well as in government roles. The need to produce financial statements and reports is present is pervasive.

Forensic Accounting

Forensic accounting investigates fraud or embezzlement and analyzes financial information used in legal proceedings.

In one of the more unique types of accounting, forensic accounting professionals look into disagreements and impending litigation to determine what events actually took place. Analysis could reveal losses and economic damages resulting from breach of contract, professional negligence or, in the case of criminal matters, possible fraud.

Forensic accountants are employed in several settings, according to the Association of Certified Fraud Examiners (ACFE):

  • Public accounting firms’ forensic accounting divisions
  • Consulting firms that specialize in risk consulting and forensic accounting
  • Lawyers
  • Law enforcement agencies, like the FBI
  • Insurance companies
  • Government organizations
  • Financial institutions

Government Accounting

Government accounting refers to the recording and management of financial transactions incurred by the government.

Government accountants perform similar work to what those in private sector perform. The difference is that instead of tracking, analyzing and reporting financial information for a business or nonprofit organization, government accountants work for various public agencies. Some drawbacks may be found in the rigid application and promotion processes, but job security can be a benefit of public versus private employment.

Professionals can work at the city, county, state and federal levels for organizations like public schools, the military and law enforcement. At the federal level, the U.S. Department of Treasury is the primary employer of accountants. It’s made up of several bureaus, including the IRS.

Management Accounting

Management accounting provides an organization’s internal management with financial information that helps improve the business.

As opposed to financial accounting, management accounting is focused on assisting employees, managers and executives. Management accountants guide critical decisions and drive performance in business, according to the Association of International Certified Professional Accountants, and their skills encompass operations, management and strategy. Specific tasks include directing internal financial processes, monitoring budgets, conducting audits, assisting leaders with financial decisions and identifying trends that predict future needs.

Management accountants are found across private and nonprofit organizations, as well as the government. Common titles include financial analyst, budget analyst and accounting manager.

Tax Accounting

Tax accounting refers to accounting for tax purposes.

Most types of accounting use frameworks like Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), but that’s not the case with tax accounting. Tax accounting is derived from the Internal Revenue Code (IRC), separating the specialty from what’s required to, for instance, prepare public financial statements. Skilled tax accountants are needed to help individuals, businesses, corporations and even those who are exempt from paying taxes fulfill tax-related needs.

Tax accountants can work in a company or as an independent contractor, helping individuals prepare taxes and consider tax-related implications for financial decisions. Other tax accountants work on the corporate side, helping an organization fill out tax forms, review financial records and provide input to company leaders on taxation and financial strategy. Corporate tax filings are generally more complicated, so more experience may be needed to work as a tax accountant in that environment.

Should I Be an Accountant?

Not sure if you want to pursue a career as an accountant? Consider some of the following tangible and intangible elements of the profession.

Salary and Job Outlook

The lucrative, in-demand aspects of accounting are hard to ignore. You shouldn’t have to worry about finding a job that pays well.

The median annual wage for accountants and auditors is $69,350, according to the Bureau of Labor Statistics. The highest 10 percent earned more than $122,220 and the lowest 10 percent earned less than $43,020.

Graphic depicting the range of accountant and auditor salaries | types of accountant

Salary data is available for the top industries in which accountants and auditors work:

  • Finance and insurance: $74,140
  • Management of companies and enterprises: $72,160
  • Accounting, tax preparation, bookkeeping, and payroll services: $69,410
  • Government: $67,100

Employment of accountants and auditors is projected to increase 10 percent by 2026, which is faster than the average for all occupations. Key factors for this growth include globalization, a growing economy and the presence of a complex tax and regulatory environment.

Job Satisfaction

In a survey of nearly 6,000 employed job seekers on Monster, finance and accounting workers were most satisfied with their jobs among all groups. They were also more confident about future job prospects. By volume of job postings, accountants claimed the top occupation among all finance and accounting occupations.

Accounting is an exciting career full of opportunities to do what you love. As you can see from the earlier list of different types of accounting jobs, you can pursue specialties that significantly alter responsibilities. You can work in a numbers- and spreadsheet-based environment, fulfilling what most people think of when they hear “accounting.” However, you can also be a self-employed tax accountant to help individuals, uncover possible criminal activity as a forensic accountant and work alongside executives to solve business problems as a management accountant.

Additionally, there are plenty of ways to move up as an accountant. One of the most obvious accounting certifications is Certified Public Accountant (CPA), which is the gold standard for many accountants, including those in audit, compliance, tax, forensic accounting, fraud, risk management, IT and appraisals. Becoming a CPA can drastically alter your earnings potential and opportunities. It’s one of many ways to enhance your career in accounting.

Ease of Entry

Careers with the type of salary and job outlook as accounting typically require quite a bit of education and experience. However, in accounting you can experience those types of benefits with a bachelor’s degree, which is the common requirement for most accounting and auditing positions. Robert Half, the world’s largest accounting and finance staffing firm, noted that general accountants with up to a year of experience earn $46,750 at the midpoint.

That means you can enjoy some of the benefits of choosing accounting once you graduate. Then you’ll be able to get valuable experience that you can use to pursue your chosen specialty (if you’re not already working in it) and increase your earning potential dramatically.

An online accounting degree is all you need to enter this lucrative, in-demand career option. Without sacrificing your current work and personal commitments, you can receive the educational foundation needed for a successful career in accounting. Brescia University’s online Bachelor of Science in Accounting is a top-ranked program that features affordable, flexible courses. For those who already have a bachelor’s degree, we offer accounting certificates, as well. Pursue your career goals at Brescia University — named one of the best online colleges for 2017 by TheBestSchools.org.