If you’re good with numbers and details, you may have decided that you want to go into the field of accounting. You may have even chosen an accounting career that you feel is best for you, based primarily on browsing generic job descriptions and reading about the highest paying accounting jobs. Though everyone knows that accountants work with numbers, it’s important for prospective and current accounting students to develop a deeper understanding of what the field of accounting entails so that they can make truly educated decisions about what kind of accountant they would like to be.
Understanding the Accepted Definition of Accounting
Like most people, you may associate accounting with tax season or with business budgets. An actual widely-accepted definition of what accounting is may surprise you on the basis of what it encompasses.
As long ago as 1966, the American Accounting Association established a definition for accounting that many educational institutions, businesses, dictionaries, professional organizations still use. In “A Statement of Basic Accounting Theory,” the organization defined accounting as “the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users of the information.”
Accounting, then, isn’t just generally working with numbers. Accountants must know what financial figures are relevant and important. That means they must know tax laws and bookkeeping practices in order to identify the economic information they need. Measuring economic information means maintaining accuracy in keeping track of all financial records. Communicating economic information might take several forms, from knowing how to fill out tax paperwork to creating reports and statements for business owners and managers.
In more recent years, the role of accounting professionals in the business world has evolved, meaning that accounting as a field has begun to include other responsibilities and opportunities. Many accountants now play roles in increasing the productivity and profitability of businesses. They analyze various kinds of information, the New Jersey Society of Certified Public Accountants reported, from the basic bookkeeping roles of tracking money coming in and going out to the ways businesses can alter practices and protocols to achieve financial goals. Accountants may take part in budgetary discussions. They recommend ways to cut costs, increase profits and improve efficiency, including implementing best practices in financial operations, according to the United States Bureau of Labor Statistics.
Understanding accounting as a multi-faceted field that is integral to the structure and financial health of businesses in every industry may help you differentiate between the numerous careers available within the profession. Some roles, like bookkeeper, focus narrowly on accounts payable and receivable. Others, like internal auditor, allow for more latitude in analyzing the financial practices of businesses. Some career preparation paths, like earning the degree and taking the exam to become a CPA, will prepare you for a wide variety of job opportunities. More specialized programs of study, like those that result in a bachelor’s degree in internal accounting, allow for a more intensive education in a narrower field of study.