Decision-Making Advice: Private vs Public Accounting

Another huge role they play is in conducting external audits of financial statements and ensuring they’re accurate. The peak of a public accountant’s career is to earn a coveted partner role at your firm. The top job for private accountants is to step into the role of Chief Financial Officer (CFO). Public accountants typically launch their careers as staff accountants, advancing into senior accountant roles, then management roles, and finally, a select few earn a partner spot at their firm. The Big Four, Deloitte, Ernst and Young, KPMG and PWC, are the largest accounting firms in the world.

The diversity in experience that you gain in public accounting is extremely valuable if you choose to advance your career into a specific area of interest. Working in private vs public accounting, on the other hand, will expose you to fewer individuals, especially clients with whom you could build future career opportunities. There are multiple career paths to explore once you pass your exam and earn CPA licensure. You’ll find five examples below, including corporate accounting, forensic accounting, and working in the government, non-profit, or academic sectors. Private accountants are typically employed by a single employer and review internal business documents to plan budgets and evaluate fiscal performance. While working with solely one employer can feel more routine, it often leads to a healthier work-life balance.

Which path offers better career advancement opportunities?

Meanwhile, cost accounting focuses on organizing and monitoring all direct and indirect expenses for effective resource allocation. For example, public accountants may need to travel to meet with various clients, while private accountants may work at fixed locations with minimal or no travel involved. Private accountants are not required to sit for the CPA exam, which is an optional exam for public accountants seeking CPA licensure. However, according to data from Zippia, more than three-quarters of corporate or private accountants (76%) hold bachelor’s degrees, while about one in 10 (12%) hold master’s degrees. Still, when choosing the path you want to pursue, it doesn’t necessarily have to be permanent.

To join the ranks of public accountants, the minimum education is a bachelor’s degree in accounting. While a bachelor’s degree will get you in the door, becoming a Certified Public Accountant (CPA) is essential to advancing in this sector. Accountants earn their CPA license from a state board, which sets standards for education and experience.

Examples of Private Accounting Jobs

The most significant difference in public vs. private accounting is that a private accountant works for another company. A public accountant might work for a firm but could also work freelance or own their own business. Those who do auditing for public companies must first meet specific requirements and register with the Public Company Accounting Oversight Board. No matter which path you choose, continuing professional education (CPE) plays a crucial role in staying current with industry trends and regulations.

DEGREES

Alternatively, some private accountants choose to pursue an MBA, which can be beneficial if you’re looking to expand your role to cover more of the operational side of the business. The work of private accountants is done for the company’s benefit and may include financial planning, reconciling accounts, and preparing financial reports. Success in both public and private accounting hinges on a blend of technical proficiency and soft skills. Public accountants, in particular, must be adept at navigating a complex landscape of standards such as GAAP and IFRS. This requires continuous learning and staying updated with changes in legislation and industry practices. Private accountants, while also needing a solid understanding of these principles, often focus more on the application of these standards within the context of their specific organization.

• Take the time to carefully weigh the pros and cons of each path and consider how they align with your goals and preferences.
• Additionally, senior accountants are often tasked with training junior staff members on correct accounting processes.
• This requirement applies in all U.S. states and includes 150 minimum hours of coursework.
• Alternatively, one may switch firms for higher pay or remain with the same firm for career development opportunities and gain experience in different areas, such as forensic accounting and tax planning.
• If you thrive in a fast-paced environment, enjoy working with diverse clients, and are eager to quickly develop your skills, public accounting may be the right fit for you.

Salary Expectations and Job Outlook

If you’re a public accountant, you work for many clients across the country or even globe. You will likely have to travel to see them, present reports, perform audits, etc., and could get sick of the frequent travel if it doesn’t fit in your lifestyle. While many of the same tasks and public vs private accounting skills are required in all types of accounting, there are also big differences in private vs. public accounting.

Ultimately, deciding which type of accounting will work best for a business based on its specific needs and goals is essential. In conclusion, private accounting is favored by some businesses for its secrecy and lack of auditing. On the other hand, public accounting is preferred by many companies for its transparency and ability to track financial performance. Bookkeepers maintain financial records, such as invoices, receipts, and other documents. They track expenses and income from business operations, enter data into accounting software, reconcile bank statements, and more.

• Working in private vs public accounting, on the other hand, will expose you to fewer individuals, especially clients with whom you could build future career opportunities.
• Professionals in this field analyze internal financial data to inform strategic decisions, optimize budgets, and improve financial performance.
• The entry goes into a tax liability account (an account for tracking tax payments that have been made or must still be made).
• Additionally, public accounting firms frequently provide performance bonuses, profit-sharing plans, and opportunities for rapid salary growth, particularly for those who achieve certifications like the CPA.

The University

On the other hand, private accountants, on average, make $63,384, with salaries ranging from $49,000 to $81,000. Public accountants, especially during busy seasons like tax time, often face long hours and high-pressure environments. However, many firms are increasingly recognizing the importance of work-life balance and are implementing flexible work arrangements and wellness programs. In private accounting, the work schedule tends to be more consistent, with fewer peaks in workload intensity, allowing for a more balanced lifestyle. This stability can be a significant draw for those prioritizing personal time and family commitments.

Bookkeepers often help prepare financial statements and reports management uses to make decisions. Public accountants can help individuals and businesses save money by providing tax planning advice and preparation services. To ensure accurate tax filing, public accountants are knowledgeable about recent changes to the tax code and can guide how to maximize deductions or credits available to taxpayers. Private accountants typically have more freedom to choose their hours and workload and decide which clients they wish to serve. CPAs are licensed professionals who provide assurance services to clients regarding financial information and other related processes. They must pass the Uniform CPA Examination, which consists of four sections and meet additional requirements depending on the jurisdiction.

Chartered Financial Analyst (CFA)- Accounting Certification

Private accountants are not subject to the same standards of practice, ethical codes, and quality control measures as public accountants. Such professional management is necessary for mistakes or negligence to occur in a private accounting setting without being detected and rectified promptly. Furthermore, private accountants enjoy a more casual working environment than their public-sector counterparts.

Now headquartered in Amstelveen, Netherlands, they offer assurance services and other professional services such as corporate finance, restructuring, and corporate governance advice. They are also known for supporting social causes such as poverty reduction efforts and education reform initiatives throughout various communities worldwide. Ernst & Young (EY) is also one of the world’s leading professional service networks, with offices in more than 150 countries. Founded by Arthur Young and Alwin C EYerhardt in 1989, it offers assurance, tax, and transaction advisories for corporate clients worldwide. Furthermore, they must also review operational procedures to identify discrepancies, which allows them to detect fraud or any other form of mismanagement within a business entity. Their findings will then be reported either internally within the organization or externally via government authorities, depending on the regulatory requirements specified by applicable laws.

Additionally, the increasing focus on corporate governance and transparency has heightened the demand for forensic accountants and auditors who can ensure compliance and detect financial irregularities. Unlike public accountants who serve multiple clients, private accountants become intimately familiar with their company’s industry, business model, and strategic objectives. This specialization allows them to provide customized financial insights and support decision-making processes within their organization. While certifications such as CPA are still valuable in private accounting, they may not be as prevalent or mandatory as in public accounting, depending on the role and industry. Private accountants, on the other hand, deal with the financial information of a single company they’re employed by, usually preparing or analyzing reports for an internal manager.

How much actual cash coming into the company, however, would be evident on the cash flow statement. They assess financial opportunities, weigh them against potential risks, make recommendations to the company’s leadership, and oversee lower-level financial staff. Private accountants must also have strong leadership abilities and be able to hire and fire others. If a public accountant owns their own business, these would be equally valuable characteristics.

Many accountants begin their careers at a public firm to build experience, then transition to a private accounting role for greater work-life balance. Public accountants must quickly assess and interpret financial data from a variety of clients, identifying discrepancies and ensuring compliance. This often involves a high level of scrutiny and attention to detail, as even minor errors can have significant repercussions. In private accounting, analytical skills are equally important but are applied in a more focused manner.

If you’re considering a career in public accounting vs private accounting, it’s important to understand the details of each. It’s also necessary to consider the benefits and disadvantages you may experience when working in private vs. public accounting. You’ll need to master a range of hard and soft skills in order to excel in your career as a public or private accountant. Here are just a few of the hard and soft skills that are needed to maximize your success in an accounting position, including critical thinking, time management, and general business knowledge.