Accounting Careers - What is Accounting Information Sheet

Century 21 Accounting Sixth Edition Page 1

Accounting Careers: What is Accounting?

A successful business is involved in numerous financial activities. Summary reports of these financial

activities are needed by several people. Owners and managers must understand financial reports to make

good business decisions. How much should be charged for the product or service? Are profits sufficient?

Should new products be sold? Should new services be provided? Can costs be decreased?

Individuals outside the business also use summary reports to make decisions that affect the business. The

business banker uses these summary reports to make loan decisions. How much should the bank allow the

business to borrow? Is the business likely to be able to repay the loan?

A business must also submit summary reports to certain government agencies. The government requires

that the business report financial information when it pays taxes. Other government agencies examine the

financial activities of the business to assure that it follows various federal and state laws.

Persons responsible for nonprofit organizations also need accounting information as the basis for making

financial decisions. The mayor of a community uses summary reports to determine how taxpayers’ money

should be spent. How efficient is the community’s water department? Can the community afford to purchase

a new fire truck? Must taxes be raised to pay for a new high school building? Nonprofit organizations, such

as churches, public service organizations, and city governments, must keep spending within available

financial resources.

Career opportunities exist for individuals to provide businesses, government, and nonprofit organizations

with necessary financial information. Many young people choose to prepare for a career in the field of

accounting.

What is Accounting?

To create useful reports, financial information must be maintained in an organized way. Planning

recording, analyzing, and interpreting financial information is called accounting. A planned process for

providing information that will be useful to management is called an accounting system. Organized

summaries of a business’ financial activities are called accounting records.

Inaccurate accounting records often contribute to business failure and

bankruptcy. Failure to understand accounting information can result in poor

business decisions for both businesses and non-profit organizations. Accounting

education helps managers and owners make better business decisions.

Accounting is the language of business. Many individuals in a business complete

accounting forms and prepare accounting reports. Owners, managers, and

accounting personnel use their knowledge of accounting to understand the information provided in the

accounting reports. Regardless of their responsibilities within an organization, individuals can perform their

jobs more efficiently if they know the language of business—accounting.

There are two types

of businesses

operated to earn a

profit:

1) service (bank,

hospital)

2) merchandising

(Wal-Mart, Belk)

Accounting Careers - What is Accounting Information Sheet

Century 21 Accounting Sixth Edition Page 2

Accounting is important for everyone, not just people who are going to be an accountant. Accounting is

used by most individuals in everyday life. Nearly everyone in the United States earns money and must

submit income tax reports to the federal and state governments. Everyone, personally or for a business,

must plan ways to keep spending within available income. Individuals having accounting skills are better

prepared to keep personal financial records.

Job Opportunities in Accounting

Accounting positions fit into several classifications that include accountants, bookkeepers, accounting

clerks, and other general office workers. An increasing amount of accounting work is done using computers.

However, the increase in the use of computers does not appear to be decreasing the need for all kinds of

accounting personnel.

Accountants

A person who plans, summarizes, analyzes, and interprets accounting information is called an accountant.

Accountants prepare various accounting reports and assist owners and managers in making financial

decisions. Accountants also supervise the work of other accounting personnel and check the accuracy of

financial statements.

Some accountants work as members of accounting firms that sell accounting services to other business. A

business selling accounting services to the general public is call a public accounting firm. An accountant

who is employed by a single business is called a private accountant. The work of private accountants is

similar to that done by public accounting firms. However, a private accountant works for only one business.

Bookkeepers

A person who does general accounting work plus some summarizing and analyzing of accounting

information is called a bookkeeper. In some businesses bookkeepers may supervise the work of other

accounting personnel. In small to medium-size businesses, bookkeepers may also help owners and

managers interpret accounting information.

Bookkeepers in small businesses may do additional general office work. Many businesses require that

bookkeepers have filing and keyboarding skills. Filing skills are needed for storing accounting records.

Keyboarding skills are necessary to efficiently use computers to prepare accounting records and reports.

Accounting Clerks

A person who records, sorts, and files accounting information is often called an accounting clerk. Some

businesses have large amounts of routine accounting tasks that are assigned to accounting clerks.

Accounting clerks are often given a title, such as payroll clerk or accounts payable clerk, to describe the

specific accounting activities they perform. These clerks usually work with only a small part of the total

accounting system. However, accounting clerks who understand the total accounting system will

Accounting Careers - What is Accounting Information Sheet

Century 21 Accounting Sixth Edition Page 3

understand the importance of the work being done. With accounting knowledge and some experience,

accounting clerks may earn promotions to more responsible accounting positions.

General Office Clerks

A person who does general kinds of office tasks, including some accounting tasks is called a general office

clerk. Many office personnel and computer operators perform some accounting tasks. For example, a

secretary may be in charge of a small cash fund. A telephone operator may enter sales order information

directly into a computer. A computer operator may enter data from special accounting documents.

Regardless of who completes the accounting activities, the work must be done according to established

accounting concepts and procedures. General office clerks with some knowledge of accounting will be able

to understand the importance of the accounting tasks they complete.

A Career in Accounting

Immediately after high school graduation, individuals may start an accounting career as an accounting clerk

or general office clerk. A few of the better students may start as bookkeepers. High school study of

accounting is useful as preparations for these accounting positions. The study of high school accounting is

also good preparation for the study of accounting in college. With experience and additional accounting

study, accounting personnel can earn a promotion on the career ladder.

Professional Certification

Almost all persons seeking positions as accountants must complete some study of accounting beyond high

school and must gain accounting experience. Most public accountants also earn the Certified Public

Accountant (CPA) designation. Each state sets the standards for earning a CPA certificate. All states

require that a candidate pass an examination prepared by the AICPA (American Institute of

Certified Public Accountants) to be certified as a CPA. Usually the requirements include study of college

One year of high

school study of

accounting.

College degree in

accounting.

Two years of high

school study of

accounting.

Promotion

Promotion

Promotion

Accounting Careers - What is Accounting Information Sheet

Century 21 Accounting Sixth Edition Page 4

accounting, some accounting experience, and a passing score on a professional test covering all aspects of

the accounting field.

Many private accountants often earn certification from a variety of professional accounting organizations.

Private accountants can demonstrate their expertise in specific fields of accounting by earning certification

such as the Certified Management Accountant (CMA) or the Certified Internal Auditor (CIA).

Professional Organizations

During the past one hundred years accountants have joined to form many professional organizations. The

oldest and largest of these organizations is the American Institute of Certified Public Accountants (AICPA).

The AICPA has a diverse membership of both public and private accountants. Other organizations, such as

the American Women’s Society of Certified Public Accountants, The National Association of Black

Accountants, and the International Federation of Accountants provide unique services to meet the needs of

their members. Together, these organizations strive to promote job opportunities in accounting, to support

and develop the professional skills of their members, and to improve the usefulness of accounting

information.

Accounting Careers - What is Accounting Questions

1

Read and answer questions with examples from the information sheet listing specific

statements from the text.

Key the question, answer, and the page number.

Answers must be in complete sentences using proper grammar and spelling.

1. Who uses summary reports of the financial activities of a business?

2. Why do persons responsible for nonprofit organization need accounting information?

3. What personal reasons do individuals have for learning accounting facts and procedures?

4. What are the responsibilities of accountants?

5. What accounting services do public accounting firms offer?

6. What is the difference between a private accountant and a public accountant?

7. What does a bookkeeper do?

8. Why do general office clerks need to study accounting?

9. What entry-level accounting jobs might be obtained by persons who have studied high school

accounting?

10. How can a person earn a designation as a CPA?

11. What organization prepares the CPA exam?

12. What is the full name of the AICPA?

Accounting Careers - Communication and Ethics Info Sheet

Century 21 Accounting Sixth Edition Page 1

Accounting Careers: Communication and Ethics

The Importance of Communication and Ethics in Accounting

Your knowledge of accounting will provide you with an important skill necessary for success in any

profession or business. Yet, accounting knowledge alone will not assure success. Your ability to

communicate and make ethical decisions will increase your chances of achieving professional success.

Communication

Effective accounting records can provide individuals with accurate and timely information regarding the

financial activities of a business. Yet this information is of little value unless it can be communicated

effectively to individuals responsible for making business decisions. Effective communication is essential

because managers and accountants must often communicate accounting information to individuals with

little or no accounting knowledge. Business leaders emphasize that communication skills are as important

as technical skills in achieving career success.

Communications is the transfer of information between two or more individuals. Communication can be

either oral or written. Oral communication includes phone conversations, one-on-one meetings, and group

meetings. Written communication includes memorandums, letters, and reports.

Effective communication requires both a knowledge of good communication skills and regular practice

using those skills. You have learned communication skills in a variety of language and communication

classes.

Business Ethics

In your personal life you are faced daily with making decisions between right and wrong. The principles

of right and wrong that guide an individual in making decisions are called ethics. Your personal ethics

enable you to make decisions that consider the impact of your actions on others as well as yourself.

Personal ethics are developed throughout your life from your relationships with family, friends, teachers,

and other individuals that influence your life.

The use of personal ethics in making business decisions is called business ethics. Regardless of your

position in an organization, you will be challenged to apply business ethics in making business decisions.

The increasing complexity of today’s business environment is also increasing the number of difficult

business decisions that must be made.

Accounting Careers - Communication and Ethics Info Sheet

Century 21 Accounting Sixth Edition Page 2

Cause of Unethical Behavior. Unethical behavior occurs when an individual disregards his or her

principles of right and wrong by choosing the wrong action. An understanding of the cause of unethical

behavior is critical to preventing unethical behavior. Effective managers can identify and correct

situations that would allow their employees to make decisions that may be unethical.

Six different factors may cause an individual to make an unethical decision.

1. Excessive emphasis on profits. Business managers are often judged on their ability to increase

business profits. The salaries of business managers are often based on the amount of profit

earned.

2. Misplaced business loyalty. Business managers often develop a misplaced dedication to their

company. Disregarding their business ethics, managers may make decisions that appear to benefit

the business without considering the negative impact on others.

3. Personal advancement. Some individuals have a “whatever it takes” attitude toward their personal

careers. Their decisions are based solely on the degree that an action will advance their personal

careers.

4. Expectation of not getting caught. An individual can recognize that an action is ethically wrong

yet select that action because the chance of getting caught is small.

5. Unethical business environment. Individuals working in a business are less likely to apply

business ethics if their managers are also making unethical decisions. The ethical environment set

by business managers influences the ethical behavior of everyone in the business.

6. Unwillingness to take a stand. How often have you seen something wrong but not taken action to

correct it? Individuals can be unwilling to take a stand against unethical behavior because they

fear losing their jobs, missing a deserved promotion, or alienating other employees.

Competition and the pursuit of success are the foundation of the free enterprise system. However, these

factors are also common elements of unethical behavior. The desire to gain a competitive edge can

motivate some individuals and businesses to make unethical decisions. The pursuit of success can

motivate some individuals to overlook their principles of right and wrong. Fortunately, most business

leaders now recognize that ethical behavior is the only way to attain long-term success.

Accounting Careers - Communication and Ethics Info Sheet

Century 21 Accounting Sixth Edition Page 3

Making Ethical Decisions. The increasing complexity of today’s business environment requires that you

be able to apply ethics in making business decisions. Determining whether an action is ethical can be

difficult. In many business situations the line between right and wrong is not clear.

Analyzing a situation is the first step in deciding whether an action is ethical. The following three-step

checklist will serve as a guide in collecting all relevant information regarding an action.

1. Is the action illegal? Does the action violate international, federal, state, or local laws? You

should not consider an action if it is illegal. Obeying the law is in your best interest and the best

interest of your business. Individuals will often encourage you to violate laws when the chance of

being caught is small or the fine is minimal. Such an approach is shortsighted and does not

consider all people who may be affected by the action.

2. Does the action violate company or professional standards? Public laws often set only minimum

standards of behavior. Many businesses and professionals set even higher standards of behavior.

Thus, an action may be legal, yet still violate standards of the business or profession. Violating

these standards may affect your job security and professional certification. The action may also

have a negative effect on your business.

Several professional accounting organizations have adopted codes of professional conduct to

assist their members in making ethical decisions. These codes have been written by the

organizations’ members to encourage their members to act and uphold the professional image of

the accounting profession.

3. Who is affected and how, by the action? If an action is legal and complies with business and

professional standards, you must rely on your principles of right and wrong to determine if the

action is ethical. Determine how the action affects a variety of people or groups, including the

business employees and owners, customers, the local community, and society. In evaluating

ethical situations, individuals often fail to consider how their actions affect a wide range of

people.

Accounting Careers - Communication and Ethics Questions

1

Read and answer questions with examples from the book listing specific statements from

the text.

Key the question, answer, and the page number.

Answers must be in complete sentences using proper grammar and spelling.

1. Why must managers and accountants have effective communications skills?

2. How are personal ethics developed?

3. What are the causes of unethical behavior?

4. What do most business leaders now recognize about ethical behavior?

5. What is the three-step checklist for collecting information for making an ethical decision?

Accounting Careers - Professional Business Ethics Questions

1

Read the Business Ethics portion of the Accounting Careers – Communication and Ethics Information

Sheet you used previously, answer the following questions.

Key or write the questions (questions are in bold) and the answer in complete sentences using proper

grammar and spelling.

Can I Say This On My Resume?

Kenneth Reed just graduated from high school with one year of high school accounting. Not sure of his

long-term career goal, Kenneth decided to apply for a position as a bookkeeper with Jackson Industries.

In an effort to improve his changes to get the job, Kenneth overstated the leadership experience he had

acquired in several part-time jobs. For example, Kenneth’s experience as a janitor was exaggerated on his

resume as “Asset Maintenance Engineer—accountable for the acquisition and maintenance of productive

assets.” In the same way, Kenneth’s job as a lifeguard was exaggerated as “Recreational Director—

responsible for coordinating customers’ recreational activities.”

Based on the impressive nature of his resume, Kenneth was hired for the bookkeeping position. After one

year of employment, Kenneth received above average ratings on his annual employment evaluation.

Shortly thereafter, the accountant met Kenneth’s former employers and learned the truth of Kenneth’s

work experience.

The three-step checklist presented in the Accounting Careers – Communication and Ethics Information

sheet is useful in determining whether Kenneth demonstrated ethical behavior in preparing his resume.

Explain and support your answer by citing specific and detailed evidence from the text to support your

answer. (Not your opinion or what you think.)

Explicit text: stated clearly and in detail Implicit text: implied though not plainly expressed

1. Is the action Illegal?

2. Does the action violate company or professional standards?

3. Who is affected and how, by the action?

Accounting Careers - Professional Business Ethics Questions

2

Cases for Critical Thinking

Explain and support your answer by citing specific and detailed evidence from the text to support your

answer. (Not your opinion or what you think.)

Explicit text: stated clearly and in detail Implicit text: implied though not plainly expressed

Case 1: Cynthia’s career goal is to be the accountant responsible for her community’s accounting

system. After completing one year of high school accounting she hopes to obtain an accounting clerk job

in city government. She believes that several years of hard work in city government will provide her with

the experience necessary to assume the accountant’s job.

Can Cynthia reach her goal? Explain why or why not.

Case 2: When planning his high school course selections, Duane selects accounting as a career field. He

plans to complete two years of high school accounting study. Duane is not planning to complete any

other high school business courses. Duane’s school counselor suggests that he also complete at least a

year-long Computer Business Applications class.

Should Duane take the counselor’s advice? Explain why or why not.

Accounting CareersDebbie Kiestler

Accounting Careers: Communication and Ethics in the Workplace

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Across3 a business that purchases and sells goods. (2 Words)

5 disignation by the American Institute of Certified Public Accountants for those who pass an exam and meet work-experience requirements.

6 planning, recording, analyzing, and interpreting financial information.

8 moral values and principles that determine our conduct in the business world. (3 Words)

12 the use of personal ethics in making business decisions. (2 Words)

13 a business selling accounting services to the general public. (3 Words)

14 consistently telling the truth; honest 15 adherence to moral and ethical principles; soundness of moral character; honesty

16 an accountant who is employed by a single business. (2 Words)

Down1 freedom from unauthorized intrusion; state of being let alone and ability to keep personal matters confidential.

2 any activity that contradicts moral values and principles that determines our conduct in the business world. (3 Words)

4 the quality or fact of being honest; truthfulness

7 a person who does general kinds of office tasks, including some accounting tasks. (3 Words)

9 a business that performs an activity for a fee. (2 Words)

10 a person who plans, summarizes, analyzes, and interprets accounting information.

11 a person who does general accounting work plus some summarizing and analyzing of accounting information.