8 Types Of Accounting Careers (And How You Can Pursue Them)

By Indeed Editorial Team

Updated 29 August 2022 | Published 28 April 2022

Updated 29 August 2022

Published 28 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Accounting is an indispensable component of an organisation's internal functions. While some types of accounting are essential to business operations, some accounting fields help in decision making and strategic planning. If you are considering a career in accounting, it is important to know the different types of accounting careers you can pursue according to your interest. In this article, we examine different accounting fields and the basic requirements for a career in each field.

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What Are The Different Types Of Accounting Careers?

Financial accounting is one of the most popular type of accounting career for professionals. With the increasing use of financial data and the availability of data analysis software, there is a huge demand for accounting professionals who have skills and knowledge in financial analysis. There is an increasing requirement for accounting professionals who know financial laws and taxation norms. The government also recruits accounting professionals with specialised auditing knowledge to investigate financial irregularities and fraud. If you want to pursue a career in accounting, you can consider one of the following accounting fields:

1. Financial accounting

Financial accounting is the process of compiling information and preparing financial reports. It tracks financial activity with evidence to ensure that the employees and departments follow internal accounting procedures. Financial accounting records a company's financial transactions according to certain principles, standards and concepts. The Accounting Standards Board (ASB) sets accounting standards for procedures and operations throughout the country. The Institute of Chartered Accountants of India (ICAI) governs the ASB and ensures that companies follow their standards and practices while performing and recording business transactions.

Financial accountants generally work with revenue and disbursement. This includes general ledger accounting, estimating accounts payable, estimating accounts receivable, payroll management, grant management and monitoring fixed assets. A financial accountant records and reports historical financial transactions or transactions that have already happened. The objective of financial accounting is to report on a past year's financial performance to management, employees, investors, regulatory bodies and shareholders. Professionals with basic or advanced accounting degrees can work in financial accounting at various levels, based on their work experience, industry knowledge and expertise.

Related: What Is A Financial Accountant? (With Duties And Salary)

2. Management accounting

Management accounting provides information for internal use within a company, particularly for senior management and department heads. Management accounting can pertain to strategic accounting, performance-based accounting or risk management accounting. This type of accounting accumulates, classifies and interprets financial information to assist individual executives and administrators in fulfilling organisational goals. Unlike financial accounting, there are no set standards for management accounting. It is neither mandatory nor subject to statutory compliance. Companies may choose to adopt management accounting if they are keen on strategic and long-term planning.

For a career in management accounting, a candidate may require a degree in accounting or a diploma in management accounting. Candidates who have cost management and cost accounting certifications can also work in this domain. Some companies may hire senior management professionals without an accounting degree if the candidates exhibit significant decision-making experience in finance and business development.

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3. Cost accounting

Cost accounting is a type of accounting that records and summarises a company's cost on products, services, processes and projects. Management staff may use this information to optimise costs, improve cost efficiency and make strategic business decisions. A cost report considers the net cost of production including material, wages, electricity, transportation and contingencies and analyses cost per unit metrics for products and services. Managers use certain metrics to analyse profitability. If required, managers can optimise resources, improve productivity, increase or reduce production capacity and expand or downsize the workforce to ensure that expenses do not overshoot a prescribed budget.

A formal degree in accounting with additional specialisation in cost accounting is the basic requirement for a career in cost accounting. Candidates who have completed the Cost and Accountancy Certification program from the Institute of Cost and Works Accountants of India (ICWA) can also work in this domain. They can work in roles like cost controller, chief auditor, chief internal auditor and financial controller.

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4. Auditing

Auditing is a type of accounting that verifies the accuracy of financial accounting processes. The main objective of auditing is to verify whether a business follows the best accounting practices and standards while operating. Auditing is mandatory and a company submits audit reports to regulatory authorities as part of its compliance requirements. Chartered accountants audit company accounts and examine financial documents, bills, invoices, credit notes, bank statements and loan documents to verify whether a company records them accurately.

An accounting professional with a formal degree in accounting, business administration or chartered accountancy can become an auditor. The University grants commission (UGC) recognises chartered accountancy as equivalent to a master's degree. An auditor may begin their career as a junior accounting executive in an entry-level role and rise to head an audit department or start their own auditing firm.

Related: What Does An Auditor Do? Duties And Responsibilities

5. Government accounting

The purpose of government accounting is to ascertain the tax and non-tax revenue, expenditure, loans and credit-ratings of government institutions. This process facilitates accounting and reporting for every government agency at the central and state level. Government auditors use accounting reports to audit institutional accounts for irregularities and signs of corruption. Government accounting addresses three major funds:

  • Consolidated fund of India: the fund that receives all taxable income loans from which government expenditure happens for a particular financial period

  • Contingency fund of India: a fund that provides for unforeseen expenditure

  • Public accounts: include debts and expenses, incomes and credits other than those in the consolidated fund of India

The Controller General of Accounts (CGA) establishes and maintains the government accounting procedures for the country's administrative institutions. They also advise the government on budgetary allocation for new schemes and capital restructuring for different public sector undertakings. If you are keen on working in the CGA's office, consider clearing the Union Public Service Commission (UPSC) examination. The CGA recruits accounting professionals for its office in each state and for its head office. You can choose a role that suits your qualification and experience. Once you clear the exams and complete a training period, you can work in government accounting.

6. Tax accounting

Tax accountants help businesses file their tax documents every year. They also assist companies in planning for future tax returns, such as avoiding certain tax burdens and understanding the implications of specific tax decisions. Usually, larger organisations hire a tax accountant to navigate the complexities of financial record-making. Tax accountants are typically knowledgeable in the latest tax rules and procedures. They may also guide businesses to invest in government funds and schemes that offer tax benefits. A formal degree in accounting or a related field specialising in taxation is a basic requirement to become a tax accountant.

Related: How to Answer the "Why Accounting?" Interview Question

7. Forensic accounting

Forensic accounting helps gather evidence that a lawyer can produce in court in the event of financial fraud like embezzlement or corruption. Accountants with advanced qualifications use highly-sophisticated techniques to identify and track deliberate irregularities or fraudulent transactions. Governments and law enforcement agencies perform in-depth investigations to identify instances of financial crime and then take legal action against the perpetrators. They require the services of forensic accountants as expert witnesses to provide evidence and testify in court. Forensic accountants also work with companies to assess gaps in financial security systems to prevent fraud and embezzlement.

Candidates with a master's degree and a few years of work experience can apply to become a Certified Forensic Accounting Professional once they clear an examination. The Institute of Chartered Accounts of India and the Institute of Cost Accountants of India offer these certifications. Forensic accounting professionals can work in government organisations, private firms, insurance companies, public accounting firms and law firms.

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8. Accounting information systems

Accounting information systems or AIS, is how a company collects, stores and processes its financial accounting data. Many AIS can integrate with other department systems like human resource management tools and payroll processing tools. This flow-through process helps minimise the need for manual entry of information. AIS professionals work for improving the efficiency of established accounting procedures.

Employees working in this field identify the best instances to install updated technology and monitor the progress of existing systems to determine if there is scope for improvement. They can make decisions in conjunction with the IT department to instil continuity in various technological processes. They also assist with technical support, such as maintaining AIS, creating new accounts or troubleshooting errors.

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Please note that none of the companies, institutions or organisations mentioned in this article are associated with Indeed.

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