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Accounting

Topics
Overview
The work
Job profile
Requirments
Growth And money
Employment
Resources

Overview

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Accountants face a lot of ribbing being dubbed bean counters, but that is only partially true. You do have to know arithmetic to be an accountant, but counting is only the means to the more important purpose of an accountant’s presence in an organisation: ensuring the financial information available on the organisation is up front and above board.

An accountant's work can range from auditing, which is the formal analysis of an organisation's financial statements, to the daily book-keeping that ensures the accounts are hunky dory.

An accountant makes sure that a corporation is telling the financial truth to its shareholders, an individual is coming clean on his tax returns, or a company has been paid all of its outstanding accounts.

Accountants spend their days combing ledger pages, tax returns or computer printouts, searching for errors or signs of skulduggery.

If you aren’t keen or lucky enough to get into the top employers of accountants, namely, Arthur Andersen, Deloitte & Touche, Ernst & Young, KPMG, or Pricewaterhouse Coopers, you can be a bigger fish in a smaller pond by working at a national or regional public accounting firm or work in the accounting department of a private or government organisation.

The most sought-after of careers in accountancy is chartered accountancy (CA). A CA is someone who has passed out of the Institute of Chartered Accountants of India and has been accepted as a member.

In India, under the Companies’ Act, only practicing CAs can be appointed auditors of companies.

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The Work

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The main areas of work are accountancy, auditing, cost accountancy, taxation, investigation and consulting.

Accountancy includes writing accounts and preparing financial statements from simple payments and receipts to complex accounts as required by the Companies’ Act.

Auditing is satisfying the readers of the financial statements that the accounts presented to them have been drawn up on correct accounting principles.

Chartered accountants perform financial, cost and tax audits. They are trained at maintaining cost auditing records, compiling cost information, enforcing cost control and making cost audits.

CAs with accounting experience have an edge when it comes to preparing tax returns, representing assessees before the income tax authorities and generally advising clients on tax.

CAs specialising in taxes usually deal with direct taxes (those taxes collected directly by the government, like income tax and wealth tax). However, they do provide advice on indirect taxes (those that are paid by the public through increased prices and surcharges like sales tax and excise duty).

CAs also have to examine specific aspects of business like the financial position of an organisation, vis-a-vis new issues of share capital, purchase, sale, financing, reconstruction, consolidation or amalgamation.

The business of accounting, which remained stable for decades, has been changing in the past several years. Recent growth in the industry has come from adding new services, most notably, business management consulting, to the traditional audit and tax functions.

Therefore, in an information-led service like accounting, consulting can prove to be very lucrative. With the right breaks, even a fresher can get a job as a consultant in a high-profile firm or set up his own consultancy and make good money early in life.

The various areas of consulting are: management accounting and internal audit; corporate law; project planning and finance; business; and systems design and information consultancy.

Other than all the above, accountants are often appointed executors of a will or trust. In such cases, the accountants need to work with lawyers and solicitors.

CAs can also hold directorships of companies, arbitrate disputes, resolve insolvency and bankruptcy issues.

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Job Profile

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Accountants are usually deemed bookish, tight-fisted social misfits with inadequate social skills.

However, accountants need to be more than mere bean counters, they need to interface with clients and handle sensitive financial information. During tax time, personal accountants have to function almost like psychiatrists, consoling clients faced with sudden bad news.

Although, with few exceptions, most accountants are involved with a company's financial statements, there are several career paths one may take.

At public accounting firms, employees usually join either the audit or the tax sections - transfers between the two are usually uncommon.

Auditors review the books of their clients, while tax accountants prepare the taxes. In private accounting, however, the lines are not as sharp.

However, the larger the organisation, the more you'll probably specialise in a certain kind of task: cost accounting, tax, or government reporting, for example.

The following are broad divisions of the kind of positions one might hold in this line:

Staff Accountant

This is an entry-level job, usually at public accounting firms. Accountants sometimes go into the audit pool, which is a large group of accountants who get picked out from time to time to work on audits under the supervision of a senior, usually a chartered accountant.

Typically, freshers get the easier audit assignments, namely, cash accounts, for instance, leaving the Swiss bank accounts and money-laundering operations to older hands! In private accounting, the staff accountant may have responsibility for managing particular accounts, such as accounts receivable or accounts payable.

Internal Auditor

In this line, you'll basically do for a company what a public accountant does for the public record: make sure that the value is where it should be. It used to be a position one would cut their teeth on before moving up, now accountants are staying at this level longer.

Budget and Credit Analysts

The budget section of an organisation usually plans and manages corporate finances for the entire year or longer. The government also employs thousands of budget analysts to do the same type of work for public programmes and expenditure.

Credit specialists focus on whether or not customers or institutional clients can repay a loan or credit line. Banks and other financial institutions are the biggest employers of such analysts.

Senior Accountant

This is the level when you begin to live a little comfortably. It is the second level in the public accounting hierarchy. After a year or two at a public accounting firm, your paycheck improves and you might get sent out alone to run an audit. This is also when a lot of accountants, as many as eight out of 10, leave their firms for some form of private corporate accounting.

Controller

Here is where you begin to be more of a rudder for the organisation, taking on more and more decision and strategy-making responsibilities. The responsibilities and pay will vary considerably depending upon the size of the firm.

Controllers generally leave most of the actual number juggling to junior accountants and take a more strategic role in the support side of the business, planning the allocation of various funds throughout the company.

Manager

Okay, you’re reaching the top now. If you get to this point, the firm thinks you're partner material and you're probably giving the idea some serious thought yourself.

You don't do as much hands-on auditing anymore, although managers often handle sensitive issues such as an important client's creative bookkeeping.

Mainly, you plan and assemble audit teams and allocate various jobs. In most cases, this is a five-to-seven-year test with significant competition from your peers, who are also on the partner track.

Partner

Good for you, you’ve made it! It took you probably 10 or more years to work your way through. Now you sign off on audits, work on client development (that is, bringing in the business) and train younger accountants. Oh, and you also collect an enviable salary.

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Requirement
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1.As far as the academic qualifications are concerned, chartered accountants have to have passed the Institute of Chartered Accountants of India and then they have to do an articleship for practical exposure. Cost accountants do not need to do an articleship. However, if possible, it is a better idea to do chartered accountancy.
An accountant can also take a course in company secretaryship or do an MBA, majoring in finance.

2.Accounting is a profession that demands precision. Many accountants stress that this is actually much more important than arithmetic skills. On the other hand, being short-sighted and not being able to see the woods for the trees is also not really the idea. Typically, the accountants who do well are people who can see the big picture as well as the details. A lot of accountants who do well at the lower levels by being very punctilious about the smaller details sometimes lose out later because they never learned to see the larger issues as well.

3.Accounting is increasingly becoming a team activity, particularly in the larger organisations and it is an asset if you have charisma and people skills. Later on as you progress in your career, you might lead a team of accountants and it helps if you can inspire them. Also, if you plan to set up a consultancy, the ability to build good working relationships with people might prove indispensable.

4. Until a while ago, you could have gone into an audit with just a pad and some pencils, but today you might see your neighbour in the room with a very fancy software that allows him to work at five times your speed. So get your journal entering down pat, but you should still be able to use computers.

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Growth and Money

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An accountant with a bachelor’s degree in commerce usually finds work like book-keeping, bank statement reconciliation, etc., and his salary ranges between Rs 5,000 and Rs 8,000.

If you are a chartered accountant, your salary will vary. It could be anything between Rs 15,000 and Rs 40,000, for someone just starting out.

Bigger firms usually pay very well. If you have a MBA degree in finance as well, you could be entrusted with managerial duties.

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3:19 Employment
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In-House Accounting

Any company will require the services of an internal accountant to set budgets, manage assets, and keep accurate track of payroll, accounts payable and receivable and other financial matters.

For medium and large firms, the internal staff works closely with the public auditors at the closing of the financial year and with senior management and income tax staff the year round.

Controllers and chief financial officers at smaller firms often enjoy even more important and influential roles in running and developing the business.

These jobs are just as demanding as those in public accounting, but they're generally less stressful. Most accountants in the private sector stay in one place, in one job, working with the same colleagues, for extended periods. However, should you choose to move around, accounting skills are very portable.

Government

Although it's not the biggest blip on the radar screens of aspiring accountants, the government hires a lot of people with accounting skills. In addition to monitoring individual and corporate tax returns, government accountants at the state and central levels formulate and administer budgets, track costs, and analyse publicly-funded programmes.

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Resources

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The two well-known institutes for the training required for this profession are The Institute of Cost & Works Accountants of India, which is located at Lodhi Road, New Delhi and the Institute of Chartered Accountants of India which is at ITO, New Delhi. NIIT and other computer institutes offer courses that provide you with a working knowledge of various accounting packages and may help you get a better job. However, if you are just a graduate, then the work is restricted to book-keeping, making balance sheets, bank reconciliation, co-ordination, etc. Apart from that, the Chennai Institute of Indirect Taxes conducts a three months' full time course in Customs for unemployed graduates. This is to meet the high demand of trained graduates in matters relating to export and import, with special emphasis to Customs. Practical training is part of this course. They also offer 12 weeks' courses in Customs on Saturday afternoons at the Institute's hall in Besant Nagar and correspondence courses in
i) Customs
ii) Central Excise
They provide weekly lessons through post, covering all aspects of law and procedures relating to:
i) Customs and
ii) Central Excise.
Contact information:

The Institute of Cost & Works Accountants of India
Southern India Regional Council,
ICWAI Bhavan,
65, Montieth Lane,
Egmore,
Chennai 600 008
Phone: 8554443, 8554326
Fax: 91-44-8554651
Gram: STANDCOST
Email: srcicwai@giasmd01.vsnl.net.in

Another institute offering a course in Accountancy is:
The Bombay Institute of Commerce
115, Himalaya House,
Palton Road,
Mumbai 400 001
Phone: 261 3374
Fax: 267 8337,
Email: bcdp@giasbm01.vsnl.net.in

Independent.

As an accountant you can always strike out on your own, individually or in partnership with other accountants, especially once you are a CA. There is plenty of business preparing tax returns and advising small businesses, provided you have the relevant expertise, such as a thorough knowledge of tax laws. You will also need to market your services and manage your own business, time-consuming activities that everyone may not enjoy.

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