Majoring in Accounting - Questions

College Majors Business Major
1

<p>First off, I'd just like to ask, what exactly is an auditor? Going by definition, this is what I get:</p>

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a qualified accountant who inspects the accounting records and practices of a business or other organization

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<p>I'm sure there is much more than just that to being an auditor. I was reading about accountants on the BLS website, but it doesn't really provide much about the job description.</p>

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Public accountants perform a broad range of accounting, auditing, tax, and consulting activities for their clients, which may be corporations, governments, nonprofit organizations, or individuals. For example, some public accountants concentrate on tax matters, such as advising companies about the tax advantages and disadvantages of certain business decisions and preparing individual income tax returns. Others offer advice in areas such as compensation or employee healthcare benefits, the design of accounting and data processing systems, and the selection of controls to safeguard assets. Still others audit clients' financial statements and inform investors and authorities that the statements have been correctly prepared and reported. These accountants are also referred to as external auditors. Public accountants, many of whom are Certified Public Accountants (CPAs), generally have their own businesses or work for public accounting firms.

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Internal auditors verify the effectiveness of their organization's internal controls and check for mismanagement, waste, or fraud. They examine and evaluate their firms' financial and information systems, management procedures, and internal controls to ensure that records are accurate and controls are adequate. They also review company operations, evaluating their efficiency, effectiveness, and compliance with corporate policies and government regulations. Because computer systems commonly automate transactions and make information readily available, internal auditors may also help management evaluate the effectiveness of their controls based on real-time data, rather than personal observation. They may recommend and review controls for their organization's computer systems, to ensure their reliability and integrity of the data. Internal auditors may also have specialty titles, such as information technology auditors, environmental auditors, and compliance auditors.

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<p>It sort of sounds like auditors just verify financial documents..but I'm sure I'm missing something in my reading. Could someone further explain this position?</p>

<p>Furthermore, I read somewhere on this forum that there is a need for those entering the taxation field. Why is that so? Is it just one of those fields that no one really wants to do?</p>

2

<p>An auditor is to accounting as an editor is to writing. An auditor simply verifies that financial information is being documented and reported correctly. Think of what happens when the IRS audits someone. They ask for proof that what the individual reported on their tax return is correct, and that’s basically what you would be doing, but with companies instead of individuals. Sounds like a crap job to me, but that’s just me.</p>

3

<p>Inmotion12 just got the bleakest view of an auditor possible…but a lot of it is true. The major positives are being able to learn about the inner workings of a business from the most basic level. You have to conquer the “understand how monies flow through an organization” concept as part of an auditor’s skill set, which can be invaluable once you have moved to a new position.</p>

4

<p>So what would I end up doing if I received my Master’s in Taxation?</p>

5

<p>A Masters in Tax would move you into a role of doing tax work for a CPA firm, rather than audit. Tax responsibilities are kind of like being a consultant…but all you deal with is tax. You are basically looking at engagements and figuring out the best way for them to be structured so that your client has the smallest tax liability. That is it in a nutshell, but the types of tax engagements vary.</p>

<p>Tax is known for being a cubicle/office job. In audit, you go to the client a lot and it is more personable than Tax. Consulting is even more personable because consultants are being asked to come help the business (and are paid tremendously for it) instead of being required by federal law to have an audit performed.</p>

6

<p>Thanks for the responses.</p>

<p>Hm…well as of now, I plan to transfer to Baruch for Accounting, and I’m considering to do a Bachelor’s in Accounting and then a Master’s there so that I can qualify for the CPA afterward. They offer choices of a Master’s in Taxation, Accountancy, or a MBA. I was thinking of doing either Taxation or just take some other electives so that I can qualify for the CPA, but I’m not sure if Taxation is really the way to go.</p>

<p>As I said, I read somewhere that Taxation is in need (I swear I read it but I can’t find it anymore). So when you say consultants, does that mean you’re talking about all accounting consultants or just auditing consultants when you say:</p>

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<p>Also, what bothers me about your statement is that you said federal law requires the audit to be performed. That entirely makes sense to me, but does that mean that the supply of jobs for auditors will always greater and will have much more job growth compared to the tax field (I don’t know what to call this job lol - tax consultant?)? What I’m MOST worried about is: a) job security, b) job placement, and c) a decent income. I’m sure all of these are all common concerns, but I’m just another one of those people who wants a job right out of college. Then after a few years of working, I wouldn’t mind going back to school. I just need to get out from under my parents’ roof ;)</p>

7

<p>Tax laws are always changing and are very complex so there is a lot of demand in tax accounting and there will continue to be so. And yea, maybe auditors get out of the office a little more than the tax guys, but it’s not like they’re being welcomed with open arms. They are not well-liked by their clients and for good reason.</p>

8

<p>I still would like to know more about the different fields of accounting that I may enter =x</p>

9

<p>It just feels like the majority of accountants begin as auditors, then after a few years of working, they move up into higher positions that actually have names (analysts, etc.). I know this isn’t true, but if one graduates with a Bachelor’s in Accounting and doesn’t go onto graduate/obtain a CPA license, then does that mean that most likely he/she will be doing the same work as the other graduates? I know that it will depend on the company, but are there not concentrations in undergrad Accounting as there are concentrations for almost every other field?</p>

<p>With that said, which area of accounting has the greatest need? I feel like I’ve already asked this but indirectly. Now I’m asking it bluntly =x</p>

10

<p>Do most tax accountants end up doing tax returns? Is that what most end up doing with a Master’s in Taxation?</p>

11

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<p>lol. Computers and low level clerks end up doing that. And starting out as a new hire, you will be doing that too. However, with a few years of experience you get to do the exciting tax planning and strategy stuff. Instead of just filing tax returns you are more of a consultant.</p>

12

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<p>Such as? I don’t really know much about this, and I’d prefer to read what someone says in their own words, even if it is based from experience, than read something from a .com website that might not be first hand knowledge.</p>

13

<p>There are literally hundreds if not thousands of ways to help clients reduce their tax liability.</p>

<p>Some quick examples:</p>

<p>Having them start their own business
Have that business classify itself as an S Corp
If they already have a business, set up a retirement fund for employees
etc,etc,etc…</p>

<p>It really goes on and on and depends on the client</p>

14

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<p>Such as:</p>

<ol>
<li><p>Should a wealthy individual gift his assets to his heirs be bequest them? Gifting an asset will reduce the gift tax provided the asset appreciates in value in the future (paying tax on an asset that is worth $100 now v. $1000 10 years later).</p></li>
<li><p>From a tax perspective, as a stock deal better or an asset deal? In an M&A, should the buyer buy the Target’s stock or it’s assets? </p></li>
<li><p>How should you open up your new business…as a C corporation or an S corporation or a partnership? Opening one or the other has tax benefits/disadvantages depending on the situation.</p></li>
</ol>

<p>And plenty more…</p>

15

<p>Hm…in a way, I definitely do like the idea that I’ll sort of be a “consultant.” However, as stated, I’m sure I won’t get to this stage until I’ve had a few years of work experience. Hopefully, if I go to Baruch, I’ll get some opportunities to make that happen.</p>

<p>Are there any links that anyone has that are recommended?</p>