Financial Accounting

Financial accounting involves external factors of business, such as regulators, lenders and investors. Continue reading to learn more about the education and careers available in financial accounting.

Is Financial Accounting for Me?

Career Overview

Financial accounting involves presenting financial information to those decision-making entities that do not take part in the daily operation of a business or organization. For example, you might share financial information with stockholders, investors, banks and government agencies. Because these individuals or organizations are not familiar with the day-to-day operations of the business in question, they need information that can assist them in making important decisions. This information often concerns the financial performance of specific individuals or groups of individuals within the business, and it is your task as a financial accountant to provide it.

In order to work as a financial accountant you will need to follow certain accounting standards, and should have at least a bachelor's degree, preferably in accounting. You will also need to become a Certified Public Accountant (CPA). Expect to work at least a 40-hour workweek in an office setting. After graduating from an undergraduate program, you can obtain an entry-level job in financial accounting where you can expect to be supervised by an experienced financial accountant.

Earning a more advanced degree, such as a Master of Science in Accounting or a Master of Business Administration with a concentration in accounting will afford you the best job prospects. You will still need to earn the CPA designation, and many financial accountants seek additional certifications to advance in this competitive field. Possible careers can be found with nonprofits, government agencies and both public and private firms.

You should establish a firm foundation with the technical aspects of accounting, as well as possess a broad knowledge of general business strategies and applications. You will need strong math and communication skills, and an ability to work with accounting, financial and database software. You should also have high ethical standards, and excellent problem solving skills.

Employment Information

According to the U.S. Bureau of Labor Statistics (BLS), employment for accountants and auditors is expected to increase by 13% between 2012-2022 (www.bls.gov). In May 2013, the mean annual wage for this profession was $72,500. Salaries are based on education level, certifications and work experience. This may explain why the 10th percentile of accountants and auditors earned merely $40,370 annually in 2013, while the 90th percentile earned $113,740 that same year.

How Can I Become a Financial Accountant?

Undergraduate Education

You can begin your path towards becoming a financial accountant by earning a bachelor's degree in accounting, finance or a similar field. A Bachelor of Science in Accounting program should include basic business principles as the core curriculum. This will include courses in business administration, marketing, economics and management. Accounting courses should cover areas such as Federal income tax, financial and managerial accounting, cost accounting and auditing. Business law, psychology and other liberal arts courses may also be required.

Graduate Education

A Master of Science in Accounting would allow you to focus on specific issues in accounting. A Master of Business Administration (MBA) covers core business principles in greater detail with an emphasis on ethics, leadership and management skills. An accounting concentration as part of an MBA curriculum seeks to balance management principles with the intensive study of accounting regulations and procedures.

Certifications

You will need to become a Certified Public Accountant (CPA) in order to advance in this career. This certification is state regulated, so you will need to sit for a national examination through your local State Board of Accountancy. This exam is computerized and involves four sections that examine your understanding of ethics, accounting principles and regulations. The exam itself was created by the American Institute of Certified Public Accountants (AICPA), which is the main regulatory body for public accountants.

Another certification that could enhance employment prospects is the Certified Management Accountant designation. This is offered through the Institute of Management Accountants. In order to sit for this examination, you must have at least two years of work experience relevant to managerial accounting. The CMA examination requires a strong understanding of risk management, valuation and financial statement analysis. While not specific to financial accounting, this designation will nevertheless improve your chances for advancement with government agencies and business firms.

After gaining significant work experience, you can pursue additional certifications through the AICPA. These include Certified Information Technology Professional (CITP), Accredited in Business Valuation (ABV) and Personal Financial Specialists (PFS) designations. In order to maintain your certifications, you will need to participate in seminars, conferences and continuing education courses. Furthermore, you will be required to log a specific number of work hours related to financial accounting in order to maintain your CPA designation.

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