The editors of the Journal of Accountancy used the term “Business Physicians” in 1912 for accountants but they couldn’t have envisioned what the profession would grow into a century later. In today’s world, an accountant is as much sought by businesses as a doctor is by individuals. With the increasing demand for skilled professionals in accounting, the subject has become a popular career choice among students. In this blog, we will tell how Accounting is a lucrative career for you after your 12th Board Examinations.
What is Accounting?
Merriam Webster defines Accounting as “the system of recording and summarizing business and financial transactions and analyzing, verifying, and reporting the results”. The process involves analyzing, summarizing and reporting of financial transactions to regulatory bodies and tax collection entities. Financial statements prepared by the accountants give an overview of the company’s operations, financial state and cash flows. The accounting processes can be handled by a bookkeeper in smaller companies while larger companies have a dedicated accountant or a team of accountants. In recent years, the businesses have grown manifold and the processes have become more and more complex. Nowadays, an individual may require help from an accountant as well for managing his/her personal finances. It is important to know that there are various type of Accounting, which can be broadly divided into 3 categories: Managerial Accounting, Cost Accounting and Financial Accounting.
Though the basic process of accounting is the same in all three categories, the reports generated in managerial accounting are utilized by the management of a company to make informed decisions on expansion, cost-cutting, optimization. The statements involve budgeting and forecasting rather than historical evidence of financial progress, which is the case in financial accounting. The documents prepared by the managerial accountants remain for the organizational use only. The techniques used in this involve cost-volume-profit analysis, risk management, and variance analysis.
Cost accounting slightly overlaps with managerial accounting as it also deals with aiding organizational decision making but it can be treated as a separate branch of accounting. Cost accounting considers all the expenses related to producing a product or service and based on that, decides the final selling price of the same.
Finance accounting involves creating financial statements to help investors understand the business and its financial strength based on which they can decide whether to invest in the company or not. The statements include a balance sheet, income statement, and cash flow statement. It is based on the report presented by a Financial Accountant that a bank decides to lend money to the company.
What Does an Accountant Do?
Accounting is often called the “language of business” and accountants are the professionals who work closely with corporates, small businesses, individuals, NGOs and government agencies to prepare financial statements and tax documents. Depending on the size and the type of business, accountants perform a variety of tasks. Some of them are:
Courses in Accounting
Accounting is taught as a subject in Bachelor’s in Business Management (BBA) and Bachelor of Commerce (B.Com), but the growing relevance of the subject and increasing demand for accounting professionals have prompted business schools all over the world to offer specialized courses in accounting. While experience and interest do play a significant role in securing a job, the reputation of institution and validity of the degree is of utmost importance, especially when applying to the top companies abroad.
Indian School of Business and Finance offers a BSc (Hons) Accounting & Finance, a rigorous undergraduate programme that receives academic directions from the London School of Economics (LSE). The students at ISBF not only study the same curriculum as their counterparts at LSE but also receive a globally recognised degree from the University of London that gives them a significant edge while applying for jobs and master’s programmes abroad. To know more about the eligibility criteria and other details, visit our programme page.
Watch Dr Vicente Cuñat, the Academic Coordinator for Finance at LSE talk about EMF programmes under LSE’s academic direction
To know about how you can make a successful career in Economics, read our detailed blog on Choosing a Career in Economics After 12th.
The expansion of global commercial businesses and the emergence of new startups have given rise to the increasing demand for accountants and auditors. The domain is showing unprecedented growth and experts predict a continued upsurge in demand for skilled professionals in the field. The domain offers quick growth opportunities and lucrative salary packages, enticing students to take up courses in accounting.
Top companies like Deloitte, Ernst & Young, KPMG etc that provide consulting services to other businesses are among the most sought-after companies for accountants who want to take their career to the next level. Apart from that accounting professionals can also work as in-house consultants for other companies or work independently with clients. Some of the popular career choices in the field of accounting are: