Although there are many sub-categories, most accounting position fall under one of seven main categories. These will be touched on below.
1. Forensic Accounting
Forensic accounting is usually associated with fraud prevention and working for the FBI, but that is not its only application. It is true that it entails a lot of investigative work, research, reconciling statements and interviews, but for the most part it involves doing damage calculations and fixing poor bookkeeping and financial tracking. This is a highly skilled position that requires focus, analytical skills, a detailed knowledge of various financial reporting systems, sleuthing skills and people skills.
2. Tax Accounting
Tax accountants are responsible for reviewing and analyzing the financial records of their client and ensuring that their financial documentation and practices are in-line with the local and federal laws and statues that govern taxation. They are also required to produce tax return documents and tax payment forms on behalf of their client. However, only those tax accountants with a relevant license or certification will be able to approve tax documents and represent their clients before the Internal Revenue Service (IRS.) These licenses include the certified public accounting license (CPA), enrolled agent (EA) license or chartered accountant (CA) license.
3. Financial Accounting
Financial accounting is the process of recording, summarizing, preparing and reporting financial documentation according to the US’s Generally Accepted Accounting Principles (GAAP) to show to relevant parties both inside and outside of the company. These parties include managers, investors, banks, suppliers and auditors, among others. The documentation produced are standardized and include balance sheets, income statements and cash flow statements, among others.
4. Cost Accounting
Cost accounting entails reviewing all relevant costs such as the cost of materials, cost of labor, rent, electricity, maintenance and so on so as to determine the total production cost of a business. This will enable the company’s management to use the data to make product pricing and production decisions.
5. Accounting Information Systems
An accounting information systems (AIS) accountant is responsible for the collection, storage and processing of financial information of a business. This data is then made accessible to managers and others to be organized to help them make financial and business decisions. Much of their job has to do with selecting and setting up software solutions for financial data input and data outputting. They will also need to ensure that all of the documents produced are in line with GAAP principles.
6. Management Accounting
Management accounting entails looking at all operational business metrics of the company, as well as its the accounting information and financial records and assessing the of the company so as to provide advice and assistance to the management and owners of the company regarding business decisions. They if the business in order to produce their reports. This includes looking at the variances between projected income and actual income, costing information and relevant data. They are employed by private businesses, public companies and government entities.
Auditors are a type of financial investigator who are responsible for inspecting the accounting and financial records of a company to ensure that they comply with local and federal tax regulations. They are also in charge of ensuring that their financial records balance and are up to date. Essentially, they are responsible for confirming that proper procedure is being followed. If they are internal company employees, there job will also include making recommendations on how company policy can be improved to better comply with government mandates and any other problems that require correcting. External auditors’ additional roles will differ depending on whether they were hired by the company or an external party and to what purpose. This position, especially in the US, usually requires an additional licensure or certification such as those of the Certified Professional Accountants (CPAs) or Chartered Internal Auditor (CIAs).