Difference Between Public Accounting and Private Accounting

1. Difference Between Public Accounting & Private Accounting Accountancy has always been a profession that is looked up to in society. While people assume that the job is the same everywhere in all contents, there are two kinds of accountancy – public accounting and private accounting. What are Public Accounting and Private Accounting When an accounting firm provides its services to other firms, it is called public accounting.  When accountants consult with one specific company, and the accountancy is considered  to be a part of the internal workings of the organization, it is known as private accountancy. 1. What are the Necessities of Public Accounting and Private Accounting? Public Accounting Public accountancy firms are usually employed by businesses to handle all of their financial  tasks, as an accountancy firm has the expertise and knowledge that can solve any money- related hurdles that companies usually face. The companies usually ask for CPA (Certified Public Accountant) certificate before  employing their accountants. Private Accounting Private accountants take care of the various financial tasks that a company requires to be  done – this involves setting up a systematic method of organizing and recording the economic activities that take place within the company daily, making sure every transaction is legitimate and legal and handing the tax and tax return processes. For example CMA, CFA.

2. To be employed as a private accountant by the right firm, you would need a bachelor’s  degree in a field related to accounting, economics or business. Having gone through courses like BBA, business organization, law, etc. would also be helpful. A strong background in commerce always goes a long way. 2. How does a Public Accountant Work? – Public accountants are employed by an accountancy firm on whose payroll he or she would be working on. – An accountancy firm is approached by clients who would like their accounts to be reviewed; taxes are taken care of etc. This is when the accountants are sent on behalf of the Public Accountancy firm to look through the company records and help the client with their financial tasks. – They also help client companies with any audits that are going to take place, to make sure that there is no missing records or embezzlement and that the internal private accounting is up to the standards of international accounting. 3. How does a Private Accountant Work? – Private accountants can be either part of the company they work for as an official accountant or a part of a group of private accountants that are employed by the company. – He or she can also be an individual who exclusively consults only with a single company whose records he or she will handle. – Private accountants take care of every transaction that the company sends or receives every day and makes records for all of it. They ensure that the tax returns are in order and filed on time. They are in charge of setting up and maintaining a systematic method of recording and handling the financial tasks, which involve everything from a small transaction to a significant business deal. 4. How to Become a Public Accountant – To be hired by an excellent public accounting firm, you must have a professional accounting certification. The CPA certificate declaring that you are a Certified Public Accountant are one of the primary qualifications they look for. – The CPA exam has to be completed within 18 months. It has four parts – Auditing and Attestation, Business Environment and Concepts, Regulation and Financial Accounting and Reporting, for each of which you have to score at least 75. – Any additional experience that you may have apart from the CPA certification will also go a long way into securing your position in a good accounting firm. 5. How to Become a Private Accountant?

3. – If you intend to be a part of a private accounting firm, you should know that they do not usually insist on the international certifications like CPA like the public accountancy firms. – If you want to get into an organization in their accountancy wing, the interview board usually looks for any degree that has to do with accounting, commerce, and finance, with a good score on the same. Any additional experience would also be appreciated when they are taking you into consideration for their accounting posts. – If you intend to become a consulting private accountant, obtaining an international degree would go a long way in ensuring that you have a steady inflow of clients. If you start taking up small business accounting, you will gain a lot of exposure which is necessary to climb the ladder and establish yourself in the accounting field of your locality. 6. Pros and Cons of Public and Private Accounting. – Since you are a part of a company when it comes to a public accountancy service, you may be asked to travel long distances to wherever the client is, and your firm is not obliged to give you any prior notice. If you are a private accountant, this will not be an issue, as you will be consulting a single client where there will be a steady and predictable routine. – Public firms often ask their employees to over specific clients in the industries they are interested in so that they can gain knowledge in their chosen field of specialization. With private accounting, you may not necessarily get the kind of exposure that someone in a public accountancy firm gets. FAQs: Q.Does having a CPA help? Yes, it does. Having a CPA lets your potential employers know about your experience, knowledge, and capabilities and increases the chance of them hiring you. Q. What kind of career opportunities are available for women and minorities in the Accounting profession? Many women are becoming accountants these days because there is always work in the accountancy field. Companies usually have provisions for women within their internal schemes and often hire women to increase the diversity of their accountancy team.