Where do I fit in the various Accounting roles out there?
The profession of accounting is a multi-faceted. Number crunching is perhaps only one part of the role that an accountant must play in an organisation. If you are studying for a degree in accounting and finance or pursuing an accountancy qualification then you must have come across different forms of accounting such as simple bookkeeping, financial accounting, managerial accounting and cost accounting. Most accountancy qualifications also include subjects such as taxation, economics, audit and corporate law. These subjects are meant to give professional accountants a comprehensive base of skills that they can then use to further specialise later in their careers. These subjects also enable future accounting professionals to prepare for different roles that they may be required to take on in their professional careers.
Some of the different accounting roles that an accountant may be required to take on include
• Transactional role
• Accounting role
• Audit role
• Analyst role
• Specialist role
• Leadership role
The role of transactional accounting can also be called a clerical role and it forms an essential part of any finance department. Transactional accounting requires an accountant to carry out basic bookkeeping tasks and record the financial information in accordance with the relevant regulatory and reporting framework.
The responsibilities for a transactional role may vary with the level of experience; most accountants entering their careers are required to fulfill this role in the beginning. This role can be considered as the first rung in the career ladder of an accountant. Young professionals can use this role as a springboard to gain the required experience to develop into a more managerial or leadership focused role later in their careers.
The accounting role comes after the transactional role. This role requires an accountant to be qualified and have some experience under their belt. Perhaps it will be easier to understand this role if we understand the difference between bookkeeping and accounting.
Bookkeeping involves the recording of financial information and data, like passing entries and maintaining books, whereas the accounting role requires a certain degree of professional judgment and technical expertise to carry out accounting adjustments, prepare financial statements, analyse costs and compile reports to help out managers in the decision-making process.
Accountants serving in this role should be able to deal with a broad range of accounts related issues and this role may put to test their competence in multiple subject areas such as taxation, compliance and reporting. This role also requires a high degree of professionalism as an accountant will have to make and deliver reports and presentations to higher management and at times provide technical assistance regarding tax planning, cost-cutting, budgeting and forecasting.
In order to carry out the role of an auditor, an accountant needs to have a specialised qualification as an auditor. There are two types of roles one being internal and the other external. External auditors have to be certified chartered accountants as only a chartered accountant can sign an audit report whereas internal auditors can be non-specialised accountants as nothing prevents an organisation from hiring anyone for this role but in order to keep up with industry standards and to maintain an efficient internal control environment organisations usually hire specialised auditors who are also members of reputable accounting bodies to fulfill the role of an internal auditor.
While a regular accountant with years of experience and understanding of the system can carry out internal audit but a specialised auditor will bring technical expertise and professionalism to the team. Professional auditors are trained in a very different manner from other accountants; they are required to maintain a skeptical mindset and are highly competent in multiple areas such as reporting, taxation and compliance.
The role of an accounting or financial analyst is a very specific role that requires a high degree of qualification and expertise. An accountant must have at least a bachelor’s degree in finance and mathematics and in addition to this CPA qualification as well with some experience.
This role requires close coordination with accounting and other related departments as well as the ability to work with other highly qualified professionals within an organisation in order to analyse, evaluate and report on the financial progress of the organisation to the higher management or the board.
Financial accountants are required to evaluate the financial position of an organisation from different perspectives such as projection of profits, income and expenditure, market performance, cost indicators, planning and control, etc. They may also be required to function as advisors to the senior management and the board. The reports prepared by analysts serve as vital decision-making tools for senior management and the board.
An accounting specialist is someone who specialises in a certain area of accounting and finance. In most cases, depending upon the organisation, the accounting specialists may have the responsibility to manage the finances of a company. This may include keeping track of income and expenditures, liaising with creditors and debtors to make sure that the payments to and from suppliers and customers are done on time. Accounting specialists may also be required to handle the payroll of an organisation. However, most organisations these days outsource their payroll functions, even in this case, the accounting firm providing payroll service will have a specialist to maintain the payroll of client organisations. Specialists may also be required to prepare performance reports and assist other departments in budgeting and other relevant tasks.
Throughout the career, a professional accountant may be required to fulfill different leadership roles. An accountant may be required to lead various teams, lead the department as a finance manager or ultimately lead as a CFO. It must be understood that one doesn`t have to be a CFO in order to be in a leadership role. Various accountancy qualifications and degrees prepare accounting students to fulfill leadership roles as finance managers in an organisation but it must be remembered that leadership isn`t a qualification, it is a quality and a trait. Yes, it can be acquired but the accountants must also actively inculcate leadership skills throughout their careers.
As a leader, an accountant is required to provide strategic guidance to senior management and the board. Leadership role also requires accountants to manage their teams effectively and this includes not only getting the tasks done on time but also developing the skills of their subordinates and developing their career by guiding them.
Some of these roles overlap each other while some are distinct. Aspiring accounting professionals need to understand what their profession and career demands from them and then plan their career progression accordingly as contrary to popular assumption, accounting isn`t simply about number crunching or dealing with data. It is a multi-faceted and broad-spectrum profession that is ever-changing.