Whether you’re just looking into studying accounting, or are actively pursuing it as a career, this beginner’s guide to accounting contains useful resources and basic guides that will help round out your understanding of the field of accounting. Let’s get started!
What is Accounting
Accounting is the practical application of accountancy principles and entails creating financial records and documentation according to established accounting principles. The purpose of doing so is to accurately analyze and track an individual or organizations economic and financial activities so as to present the information in a way that is concise and useful to the organization’s management, stakeholders and other relevant internal and external entities.
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History of Accounting
Accounting is an ancient practice, predating known writing by about 17,000 years. However, the foundations of modern accountancy are thought to have begun somewhere between 3500 – 2000 BCE in Mesopotamia with the introduction of scribes who acted as ancient bookkeepers. Then as civilization, monetary systems and governments advanced and became more complex, so too did the method of recording financial data and taxation records evolve until the practice developed into the accounting that we know today.
Types of Accounting
Accounting continues to evolve as society, businesses and technology evolve. This has also led to the creation of many specialized accounting fields and diverse subfields.
These include forensic accounting, corporate accounting, financial accounting and management accounting, among others. The two main categories are private and public accounting. While a basic accounting or financial degree is generally enough to practice private accounting, practicing public accounting will require special licensure.
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- What is Tax Accounting?
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Due to the complexity of laws pertaining to taxation and auditing, most countries require certain certificates and licenses to be acquired before the individual can practice public accounting. These include licenses like the CPA, CIA, EA and CMA, among others. In order to achieve this, they will usually need to meet certain requirements.
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For the CPA license, for example, each US state has their own requirements for licensure. To sit the four-part CPA exam, an applicant will need to fulfill the 150 college credit hour requirements, age requirements and citizenship requirements. Then after they have passed the exam, they will also need to meet their state’s work experience requirements and ethics exam requirements. But even once they have obtained their CPA licence, they will need to renew their CPA license according to their state’s policies. This will entail paying the renewal fee and meeting the CPE requirements.
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Choosing a good accounting school is important, especially if you are considering getting a CPA licence or similar later on. This is because part of meeting the educational requirements includes meeting the specified course requirements, which includes ensuring that those courses are accredited by state-approved accrediting bodies.
As with all aspects of CPA licensure, the accrediting bodies that are acceptable varies from state to state. For instance, Texas State Board of Public Accountancy accepts transcripts that are accredited by any of the six main regionally accrediting bodies in the US. But there are others that are more or less selective.
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Careers in Accounting
Getting a job straight out of university can be challenging, but there are many resources to try. For example, you could try to reach out to HR managers and recruitment agents on LinkedIn or visit the websites of accounting firms and other company websites to check out their job openings. Job listing websites such as Indeed.com and Glassdoor can also be useful.
Some people choose to go into accounting because they are genuinely interested in it, while others pursue it because of the stability and job security it offers. They are therefore willing to pursue it despite accounting’s difficulty and the stress that it can sometimes entail.
But many also discover that accounting isn’t really their thing later on. Fortunately, accounting skills are transferable to many other careers, so even if it doesn’t work out, that time and effort wasn’t really a waste.
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Accounting in Culture
Accounting is now so varied and is practiced by so many people that it has even developed its own subculture. For instance, there are the plethora of accounting jokes and puns, as well as the various games and films that incorporate accountants and accounting as the main subject. There is even a lot of accounting and auditing themed merchandise for real enthusiasts.