Public accounting firms generally have several different types of work available. Most accountants who enter one of the larger public accounting firms right after graduation begin working in the audit area. They are assigned to work on various clients under the direction of an audit senior and an audit partner. This type of work involves a lot of detailed review of accounts, transactions, and systems. Statistical analysis might be used to select an audit sample. An accounting course in auditing is essential for those entering this field. The auditors create a record of the audit in their work papers, and the end result of the audit is an auditor’s report on the financial statements of the company.
Junior auditors can work long hours, and public accounting firms focus on the number of “billable hours.” Billable hours are the hours that may be billed to a client. There is a delicate balance when considering billable hours. The firm wants its accountants to bill out as many hours as possible, but clients watch billable hours closely to try to reduce costs.
Another arena in which public accounting firms practice is tax accounting. Typically accountants with a master’s degree specializing in taxation start in this portion of a public accounting firm. These tax accountants could also have specialties within the field, such as in tax planning, estate taxation, individual taxation, corporate taxation, oil and gas severance taxes, franchise taxation, and foreign taxation.
Public accounting firms might also offer management consulting services. Typically these types of services focus on helping companies implement organizational change; performance management systems; human resources benefit analysis; or process improvements. Sometimes an objective person from outside the company might see ways to improve operations simply because that person is not entrenched in the current ways of doing business.
Another specialty in public accounting firms is forensic accounting. The Department of Labor, Bureau of Statistics, 2010-11 Occupational Outlook Handbook states, “Forensic accountants combine their knowledge of accounting and finance with law and investigative techniques to determine whether an activity is illegal. Many forensic accountants work closely with law enforcement personnel and lawyers during investigations and often appear as expert witnesses during trials.”
Other parts of a large public accounting firm could provide information systems analysis, as well as software evaluation and implementation services. Accountants working in this arena need to have taken at least one accounting course that specializes in accounting information systems. These accountants sometimes work under intense pressure to meet project deadlines, with a subsequently high level of overtime. For example, if the project is designed to convert an accounting system to a new one, each part of the project will have milestones. Each milestone must be met on time, or the whole project will be delayed.
Advancement in public accounting firms usually occurs in an environment of intense competition. Usually individuals are rewarded for their own personal performance and not for their ability to work with a team to accomplish a goal. Many firms have the philosophy often described as “up-or-out.” If a person does not move up as fast as the accounting managers believe he or she should, the firm lets the employee go.
Typically accountants in public firms progress from entry level to senior accountant and then to manager. Only a few managers are actually accepted as partners in the firm. Partner is the highest level. Many seniors and managers ultimately are hired by companies for whom they have provided services, and they might in fact rise to high levels in the company.
The 2010-11 Occupational Outlook Handbook states, “Accountants and auditors are expected to experience employment growth from 2008-18. Job opportunities should be favorable; accountants and auditors who have a professional certification, especially CPAs, should have the best prospects. Median annual wages of wage and salary accountants and auditors were $59,430 in May 2008. The middle half of the occupation earned between $45,900 and $78,210. The bottom 10 percent earned less than $36,720, and the top 10 percent earned more than $102,380.”