What Does an Accountant Do? Role, Qualities, and Skills

Key Takeaways

• Accountants, including CPAs, chartered accountants, tax accountants, and cryptocurrency tax accountants, play a crucial role in ensuring the accuracy and integrity of accounting records, offering services like auditing and consulting across various sectors.
• The role of accountants includes analysing financial documents, reviewing and auditing financial statements, risk assessment, compliance with laws, tax planning, and preparing for external audits. They are integral in decision-making and maintaining financial stability for businesses and individuals.
• Accounting is evolving with trends such as automation that streamlines routine tasks, data analysis that enhances financial insight, and a focus on transparency and stringent data security to protect sensitive financial information.

What Is an Accountant?

Accountants, including management accountants, are the backbone of any business, ensuring the accuracy and integrity of financial records. They are the detail-oriented sentinels guarding against financial inaccuracy that could have serious implications on a business or individual. Their role spans from problem-solving and budget management to specialised areas such as taxation, consulting, and auditing. Accountants can work in a variety of settings, including large accounting departments, external accounting firms, or their own private practices. Management accountants are a popular choice for many businesses as they help them make calculated decisions that contribute to the business's overall growth and success.

However, you might be surprised to learn that there are several types of accountants. Let’s learn about a few of them.

Certified Public Accountants (CPA)

Certified Public Accountants (CPAs) are licensed professionals who have passed the Uniform CPA Examination and adhered to state-specific licensure requirements. They hold the authority to audit financial statements and represent clients before the IRS, tasks that non-CPAs cannot perform. From preparing financial documents to conducting financial audits and offering advisory services, public accountants with a CPA license are well-versed in various specialised tasks.

Equipped with analytical, computer, mathematical, and business knowledge, Certified Public Accountants work in multiple sectors such as:

• public accounting
• finance
• government
• nonprofit organisations
• independent consulting

Many accountants pursue the Certified Public Accountant (CPA) designation which is widely considered as the topmost standard in the accounting profession.

Chartered accountants

Chartered accountants, much like CPAs, are certified professionals who specialise in various areas of accounting. Their certification attests to their expertise in financial accounting, audit, and tax law, obtained through rigorous training and examinations. A chartered accountant is often involved in complex financial transactions, offering their services to both businesses and individuals.

From providing financial advice to assisting in corporate finance, chartered accountants play a significant role in ensuring financial stability and growth.

Tax accountants

Tax accountants, as the name suggests, specialise in one of the most intricate areas of finance: taxation. They assist businesses and individuals in navigating complex tax laws and regulations, ensuring compliance and minimising tax liabilities. These professionals are well-versed in the latest tax codes, enabling them to provide accurate tax planning advice and prepare tax returns efficiently.

In a world where tax laws are continually evolving, the expertise of tax accountants is invaluable.

Cryptocurrency tax accountants

With the onset of digital currencies, a new breed of accountants has emerged - cryptocurrency tax accountants. These professionals specialise in handling the tax implications of digital currency transactions. As more companies and individuals engage in cryptocurrency trading, the demand for these specialised accountants is rising.

They provide invaluable guidance in this new, often confusing landscape, ensuring compliance with tax laws and regulations pertaining to digital currencies, as mandated by the Internal Revenue Service.

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There is also a Certified Internal Auditor who is like a Certified Management Accountant but is not required to have a license in order to practice. Most accountants prefer to become a Certified Public Accountant (CPA) as it is the most highly regarded title among other accounting professionals.

What Does an Accountant Do?

To appreciate the value accountants bring to a business, it’s essential to understand what their role encompasses. From creating financial reports to ensuring compliance with laws, accountants wear many hats, sometimes for multiple companies. They:

• Analyse fiscal records
• Review financial statements
• Conduct routine and annual audits
• Provide risk analysis and forecasting
• Assist in lowering tax exposure
• Handle old tax debts
• Fix poor record-keeping
• Prepare businesses for audits

Let’s take a more thorough look at some of these responsibilities.

Financial accounting and reporting

Financial reporting is a multifaceted process that goes beyond simple number crunching for companies. It involves:

• Creating core financial statements, such as the balance sheet, income statement, and statement of cash flows
• Involving various stakeholders in the accounting process, including accounting staff, financial controllers, and, in larger companies, the CFO and CEO, alongside external auditors
• Ensuring the timeliness of these reports, which is crucial. Even the most precise and comprehensive reports lose their value if they are not current.

Accurate financial reports are not just essential for businesses to secure capital, but they also serve as a vital communication tool. They reveal the company’s financial condition to stakeholders, influencing investment and overall business decisions. They also foster corporate accountability and enhance relationships with:

• Business partners
• Suppliers
• Customers
• Creditors
• Investors

Auditing and compliance

Auditing is a vital part of an accountant’s role. Through internal audits conducted by employees, accountants play a key role in improving decision-making, internal controls, and compliance with laws and regulations. The systematic review conducted through audit and compliance processes is crucial in detecting and preventing errors and fraud, thus ensuring financial accuracy and integrity.

Compliance audits specifically ascertain whether a business adheres to external laws, regulations, and agreements, thus avoiding legal penalties and reputational harm. Accountants also contribute significantly to risk management by analysing financial data to assess risk levels and recommend appropriate financial strategies.

How Much Does an Accountant Earn in Singapore?

As with any profession, an accountant’s salary depends on various factors, including experience, specialisation, and location.In Singapore, the average salary for an accountant is approximately S$12,500 per month, with additional cash compensation averaging S$8,000, ranging from S$4,425 to S$12,000. This earning potential, combined with the high demand for accounting services, makes accounting a lucrative career path to consider during your job search.

What Skills and Qualities Do Accountants Need?

To be an effective accountant, one must possess a balanced combination of technical expertise and soft skills. This includes computer savviness, openness to learning new technologies, effective communication, and detail-oriented management. Additionally, being a certified accountant of any kind will significantly boost your opportunities in the world of accountancy.

Moreover, specialised skills are needed to guarantee efficiency in different areas within the accounting profession. Let’s examine these skills more closely.

Technical expertise in accounting and finance

In the realm of accounting, technical expertise is of paramount importance. Accountants need a thorough understanding of:

• Generally Accepted Accounting Principles (GAAP) to ensure standardised accounting practices and GAAP-compliant financial statements
• Preparing financial statements
• Analysing account information

Soft skills for effective communication and management

While technical skills are essential, soft skills play an equally important role in the accounting profession. Some important soft skills for accountants include:

• Attention to detail
• Clear articulation
• Effective communication
• Excellent interpersonal skills

These skills are necessary to relay complex financial information effectively and to build long-term client relationships.

Organisational skills are also essential for accountants to effectively manage various components such as business operations and clients’ information. Creativity in problem-solving and developing business strategies enables accountants to meet diverse client needs and stand out in the competitive market.

How Do I Become an Accountant and How Long Does It Take?

Becoming an accountant involves a dedicated commitment to education and professional development. A bachelor’s degree in accounting is the typical educational baseline for entry-level accounting jobs. Many aspiring accountants also take advantage of internships during their undergraduate studies, which provide valuable hands-on experience and often lead to full-time employment opportunities.

Other steps on this professional journey include securing a Master’s degree in Accounting and additional certifications like Certified Management Accountant (CMA) and Enrolled Agent (EA). Let’s investigate further the educational and certification prerequisites for aspiring accountants.

Educational foundations for aspiring accountants

A Bachelor of Science in Finance and Management Accounting is essential for meeting employer expectations and achieving career objectives in accounting. This degree offers comprehensive knowledge in key areas, including company audit, accounting principles, and familiarity with accounting information systems.

Graduate programs in accounting are also accessible to students from various undergraduate backgrounds, although extra coursework may be required to establish the requisite knowledge base in accounting.

Certification requirements for specialised accountants

In addition to a solid educational foundation, aspiring accountants often seek additional certifications to enhance their skills and professional standing. The most common certifications include the Certified Public Accountant (CPA), Certified Management Accountant (CMA), and Certified Internal Auditor (CIA). Each certification requires passing rigorous exams to a high standard and fulfilling specific work experience requirements.

Many employers prefer accounting professionals who possess these additional certifications due to the comprehensive knowledge and expertise they represent.

How To Find an Accountant for a Small Business

Finding the right accountant for a small business can be a daunting task. However, there are several strategies to simplify the process. Here are some steps to follow:

1. Ask for recommendations from other small business owners
2. Conduct online research on the background and experience of potential accountants, as well as reading reviews
3. Utilise directories from professional organisations such as the American Institute of CPAs or the National Association of State Boards of Accountancy to locate accountants by state and region

By following these steps, you can find the right accountant for your small business.

Before choosing an accountant, it’s important to determine the specific functions and frequency of services needed for the business. Small businesses typically choose between hiring an independent accountant or contracting with an accounting firm rather than employing a full-time accountant. Key considerations when selecting an accountant include their experience with similar businesses, comfort with sharing sensitive information, and understanding of the business’s specific needs.

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Streamlining Operations with Accounting Services

Accountants can significantly enhance business processes. By providing strategic advice, automating administrative tasks, managing debt, assisting with loan applications and budgeting, setting up cloud accounting software, and improving business efficiency, they bring immense value to a business. As a business grows, an accountant plays a key role in handling additional financial responsibilities such as payroll for new employees and managing bulk materials purchasing, promoting streamlined expansion.

Let’s look into how the incorporation of technology and strategic planning aid this process.

Technology integration and cloud accounting

Technology integration plays a pivotal role in streamlining accounting operations. By automating accounting tasks, implementing comprehensive invoicing systems, establishing cash flow dashboards, tracking key performance indicators, and facilitating mobile accounting capabilities, accountants can enhance efficiency.

Cloud accounting solutions offer additional benefits like:

• Real-time data access
• Improved security with encryption and access controls
• Tailored customisation
• The convenience of accessing systems from any location.

Strategic business planning

In addition to technology integration, accountants contribute to strategic business planning. They:

• Identify opportunities to enhance profitability and reduce tax liabilities through cost analysis and financial planning

• Significantly influence strategic business decisions

• Establish and track key performance indicators to evaluate strategic objectives

• Help with budget forecasts

• Ensure financial plans align with business goals.

Accountants also assist in shaping strategic decisions by providing insights into financial trends and supporting business initiatives, such as new product lines or market expansion.

Top Accounting Trends To Consider

The field of accounting is constantly changing to adapt to the needs of the business world. Some current trends that are shaping the industry include automation of accounting processes, data analysis to inform decision-making and a renewed emphasis on transparency and data security. These trends are transforming the role of accountants and will have a significant impact on the future of the profession.

Let’s take an in-depth look at these trends.

The rise of accounting automation

Automation is revolutionising the accounting industry. Many firms are automating tasks such as manual data entry, error checking, and chasing paperwork, which allows accountants to focus more on data analysis and interpretation. Not only does this enhance efficiency, but it also increases the accuracy and reliability of accounting tasks.

The rise of artificial intelligence and robotic process automation enables this shift, handling routine tasks and freeing up accountants' time to focus on higher-value activities.

Embracing data analysis in accounting

Data analysis is another significant trend shaping the accounting industry. Today’s accountants need to be proficient with business intelligence and data visualisation tools, as well as data management skills like SQL. This enables them to analyse large volumes of financial data effectively and provide actionable insights to move a business forward.

From uncovering relevant opportunities and risks within financial data to fulfilling data-centric roles like data engineers, data controllers, and strategic advisors, the role of accountants is becoming increasingly data-driven.

Transparency and stringent data security

In an era where data breaches and cyber threats are a constant concern, transparency and stringent data security are crucial in accounting. Accountants are entrusted with sensitive financial data, and stakeholders expect that their information will be handled with the utmost care. Ensuring data privacy, enhancing security measures, and maintaining transparent practices are critical aspects of modern accounting.

This focus on transparency and security not only protects businesses and their clients but also enhances the credibility and trustworthiness of the accounting profession, in line with the objectives of the Securities and Exchange Commission.

Summary

From the meticulous management of financial records to the strategic planning of business activities, the role of accountants is undeniably crucial. As we’ve explored, this profession is diverse and dynamic, constantly evolving to meet the needs of an ever-changing business landscape. Whether it’s the rise of specialised accountants like cryptocurrency tax accountants or the adoption of emerging trends like automation and data analysis, the accounting field continues to adapt and innovate. With their unique blend of technical expertise and soft skills, accountants are well-positioned to navigate this exciting landscape and drive businesses forward.

Gabi Bellairs-LombardBusiness Writer

Gabi's passionate about creating content that inspires. Her work history lies in writing compelling website copy and content, and now specialises in product marketing copy. When writing content, Gabi's priority is ensuring that the words impact the readers. As the voice of Osome's products and features, Gabi makes complex business finance and accounting topics easy to understand for small business owners.

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