Opportunities for Accountants
Accountants employed by a business (companies, gvt, not-for-proﬁt) are employed in private accounting !•
Career opportunities: bookkeeper, payroll clerk, general accountant, budget analyst, cost accountant, ◦
international auditor, information technology auditor)!
auditors - verify the accuracy of ﬁnancial records, accounts, and systems!◦
Public accounting - Accountants employed publicly (individually, in audit, tax, or management advisory services) •
provide services on a fee basis !
Career opportunities: large, mid-size, or small ﬁrms)!◦
Certiﬁed Public Accountants (CPAs) - public accountants who have met a state's education, experience, and •
Generally Accepted Accounting Principles (GAAP)
Financial info in U.S. based on GAAP - a collection of accounting standards, principles, and assumptions that •
deﬁne how ﬁnancial info will be reported!
Accounting standards - the rules that determine the accounting for individual business transactions!•
Accounting principles and assumptions - the framework upon which accounting standards are constructed!•
(U.S.) Financial Accounting Standards Board (FASB) - has the primary responsibility for developing accounting •
standards; publishes Statements of Financial Accounting Standards, Statements of Financial Accounting
Concepts, and Interpretations!
Securities and Exchange Commission (SEC) - an agency of the U.S. gvt that has authority over the accounting •
and ﬁnancial disclosures for companies whose shares of ownership (stock) are traded and sold to the public;
may issue Staﬀ Accounting Bulletins on accounting matters not addressed by FASB!
International Accounting Standards Board (IASB) - issues International Financial Reporting Standards (IFRS)•
(diﬀerent from FASB)!
Characteristics of Financial Information
Primary goal of ﬁnancial accounting is to provide info useful for decision-making; must possess two •
characteristics: relevance and faithful representation!
Relevant - info has the potential to impact decision making!•
faithful representation - the info accurately reﬂects an entity's economic activity or condition!•
Financial accounting and GAAP are based on following assumptions: monetary unit, time period, business entity, •
monetary unit assumption - requires that ﬁnancial reports be expressed in a single money unit, or currency, •
normally determined by the country in which the company operations (United States = U.S. Dollar) in order to
maintain a common measurement of the eﬀects of economic events and transactions on an entity!
time period assumption - allows a company to report its economic activities on a regular basis for a speciﬁc •
period of time so that changes in ﬁnancial condition are reported periodically on a consistent basis (United States
= yearly basis supplemented by quarterly reports)!
business entity assumption - limits the economic data in ﬁnancial reports to that directly related to the activities •
of the business (business is separate from its owners, creditors, or other businesses)!
business entity = proprietorship, partnership, corporation, or limited liability company (LLC)!◦
Form: Proprietorship - owned by one individual!
Characteristics: 70% of businesses in U.S., easy and inexpensive to organize, resources are limited to those of the
owner, used by small businesses!
Examples: A&B Painting!
Form: Partnership - is owned by 2+ individuals!
Characteristics: 10% of business organizations in the U.S. (combined with LLCs), combines the skills and
resources of more than one person!
Examples: Jones & Smith, Architects!
Form: Corporation - is organized under state or federal statues as a separate legal taxable entity!
Characteristics: generates 90% of business revenues, 20% of the business organizations in the U.S., ownership is
divided into shares called stock, can obtain large amounts of resources by issuing stock, used by large businesses!
find more resources at oneclass.com
find more resources at oneclass.com