Everywhere you turn, people are making leaps into incredible, satisfying careers. Your friends are announcing new jobs on social media and your favorite blogs are constantly featuring stories of people who landed the job of their dreams.
Now it’s your turn. You’ve been toying with the idea of a career change for a while, and your excitement is building. You’ve done the research and know that your detail-oriented, analytical personality is a perfect fit for the world of accounting. But your research also tells you there’s another decision ahead—whether to focus your career on public versus private accounting.
So what’s the difference between these branches of accounting and which option is best for you? A career in accounting sounds better every day, but you need to be sure you choose the path that works for you and your family. To help, we created this handy guide to help you decide if you’re better suited for public or private accounting.
Defining public accounting and private accounting
Before we get too far along in comparing private and public accounting, let’s take a moment to cover the basics.
What is public accounting?
Public accounting is the branch of accounting where an accountant works with a range of clients to review and prepare financial documents that an individual or corporation is required to disclose to the public. In simple terms, public accountants work to verify important financial documents, reports and disclosures from an outside perspective.
What is private accounting?
Private accountants, on the other hand, deal with the financial information of a single company they’re employed by, usually preparing or analyzing reports for an internal manager. Often the work of private accounting professionals is reviewed and audited by public accounting firms—this provides a sort of independent stamp of approval verifying that their private internal accounting practices meet reporting standards.
Public vs. private accounting: A closer look to compare
On paper, the distinction between these two sectors of accounting may sound relatively minor. But this simple difference can make a big impact on what your life as an accountant could look like. Let’s take a closer look at some of the biggest factors to see whether you’re better suited for public or private accounting.
Both public and private accountants have their busy times, whether it’s tax season for public accountants or the end of a financial quarter for private accountants. But beyond that, the two work environments can vary quite a bit.
“The biggest thing you need to know about environments if you’re weighing public versus private accounting is the travel,” says Eric Butts, CPA and advisory manager at PricewaterhouseCoopers.
Private accountants work for a single company. They can expect to work fairly regular hours in the comfort of the office their boss assigns to them. This option very much resembles a “typical” office job.
A public accountant’s work environment isn’t quite as predictable. They often own their own businesses or work for public accounting firms. They work with a wide variety of clients—from individuals to corporations, and potentially even the government. Public accountants travel to wherever their clients are located. They do their work wherever a client has space for them and they are often under the pressure of strict deadlines—which can lead to long workdays.
Day-to-day job duties
Many people assume one accounting job is the same as the next, but these different areas of accounting make for job duties that are worlds apart.
What do public accountants do? Public accountants are responsible for ensuring that their clients’ financial documents are accurate and complete before being released to the public. Their daily job duties usually center on testing and analyzing the financial information their clients have prepared to make certain they’re error-free, according to Butts.
Public accountants will often choose a specialty—such as tax accounting, auditing, forensic accounting or consulting—that comes with specific job duties as well.
What do private accountants do? Private accountants work with internal business or financial managers to plan their company’s cost of doing business and to evaluate fiscal performance.
“[Private accountants’] daily activities revolve primarily around management reporting. This includes recording manual journal entries and performing account reconciliations,” Butts says.
Public vs. private accounting: Pros & cons
Both of these career paths have advantages and disadvantages. Consider these pros and cons before making your decision.
Pros of public accounting
- Job advancement opportunities may come sooner
- Allows for specialization
- Greater variety of exposure in working with different clients and industries
Cons of public accounting
- More pressure and deadlines
- Work hours
- Possibility of inconvenient travel
Pros of private accounting
- Less stressful
- Steady, flexible work environment
Cons of private accounting
- Lack of variety in job duties
- Advancement opportunities may not come as quickly
- Fewer opportunities to specialize
It’s important to remember that while this is a side-by-side comparison, the path you choose doesn’t have to be permanent. The reality is that many accountants don’t just stick with one route or the other. For instance, it’s fairly common to see new accountants begin working for large public accounting firms..
Eventually these accountants transition into a private accounting role where the demands of the job can be a little more accommodating. That being said, plenty stick with public accounting roles their entire careers and love the work—and potential for growth it brings. It all comes down to which best suits your style.
Which accounting career path will you follow?
Now that you know more about the ins and outs of public versus private accounting, you should be able to determine which path is best for your future.
Adapted from: https://www.rasmussen.edu/