Choosing Between Public and Corporate Accounting
The CPA credential can open career opportunities in both public and corporate accounting in the U.S. and around the world. Accounting graduates can choose from many different types of accounting positions in a variety of industries. According to the Occupational Outlook Handbook published by the U.S. Bureau of Labor Statistics (bls.gov), the employment of accountants and auditors is going to grow 7 percent from 2020 to 2030, as fast as the average for all other occupations. Within all accounting career opportunities, graduates have numerous options: public accounting, corporate accounting, nonprofit, education, government, consulting or self-employment. The specializations available include audit, financial forensics, information technology, business valuation, personal financial planning, tax and managerial. This article focuses on the two most common options: public practice and corporate accounting. Both have unique employment attributes that must be considered when choosing an accounting career path.
Public accounting allows accountants to serve different clients. There are more than 138,000 accounting firms in the U.S. The career planning tool at This Way to CPA (https://www.thiswaytocpa.com/work-experience/plan-career/) provides a decision-tree questionnaire. After selecting “public accounting,” one can select the size of the firm he/she is interested in: international/national, regional or local. The Big Four and the second tier of firms have clients in the U.S. and abroad, such as Microsoft and Samsung. Regional and local firms can offer entry-level accountants better access to the firms’ senior leaders which can provide greater mobility up the career ladder.
At the majority of the firms, an accountant needs to become a CPA in order to be promoted to the manager level. The CPA is a U.S. credential, but it is sought after in many other countries, such as the European Union, the United Arab Emirates, Saudi Arabia, Malaysia, Singapore, South Korea and many others. The CPA makes the world a level playing field for employees, unlike medical and law degrees, for example, that are specific to the country of one’s education.
Public accountants can choose among many different career paths, contingent on the firm’s size. Some of the most common specializations available in public accounting are auditing and assurance services, forensic accounting, taxation, personal financial planning, environmental accounting and international accounting. Public accountants tend to have long work weeks (exceeding 50 hours a week, especially during the busy tax season). The workload is dependent on the type of work performed and tax compliance and audit deadlines.
One’s personal career goals are usually what determines the choice of public accounting. Working in public accounting exposes entry-level accountants to clients from a variety of industries and company sizes.
Corporate accounting allows accountants to work for one specific company rather than a variety of clients. The criteria for selecting a company to work for can be based on size, industry, geographic location, and type of product or service being sold. The role of a corporate accountant usually includes recording business transactions with the help of bookkeeping software and preparing financial statements. Other corporate accounting responsibilities include budgeting, tax reporting, internal audit, ESG (environmental, social and governance) reporting, and others. Corporate accountants also get exposed to the work of other departments in the company, such as engineering and marketing. They are less likely to travel since they do not have to visit clients’ offices.
Working for one company offers a greater opportunity to learn about the company’s complete financial picture and industry. The work hours typically resemble a traditional 40-hour workweek. While the company may not require the members of their finance team to become CPAs, the CPA credential can provide opportunities to obtain senior leadership positions within the organization.
Robert Half’s 2022 Salary Guide reports on various accounting positions’ remuneration levels throughout the U.S. The primary differences in salaries are contingent upon the type of position and geographic location. Robert Half’s data shows the national midpoint salaries for specific accounting positions in public accounting, corporate accounting and others. Princeton, Mount Laurel and Woodbridge are the three New Jersey locations for which salary data is available. Nationally, entry-level public audit salaries in 2022 are higher than entry-level general accounting salaries by $5,750. On the other hand, the salaries of entry-level corporate tax accountants are higher than those of entry-level public tax accountants by $6,250.
Accounting graduates can choose between public and corporate accounting, depending on their personal goals and industry of interest. Both options offer unique opportunities and challenges. Often, graduates start in public accounting and later switch to corporate, especially if they have gained the industry-specific experience required. Switching from corporate to public accounting is not unusual, but it is less common.