# What Does an Accountant Do?

![Accountant: A person qualified to keep, review, and analyse financial records.](https://www.investopedia.com/thmb/VknCxNO3VHSLizTXb_jkeyllHYU=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/accountant.asp-FINAL-1-1-e83d0f7de3b848ada757ac5b9af16b72.png)

*— Investopedia / Joules Garcia*

> **Definition**
>
> An accountant reviews financial records, tracks income and expenses, and provides insights for financial decisions, often requiring certification and ethical compliance.

## What Is an Accountant?

An accountant is a financial professional who reviews and analyses financial records and keeps track of a company's or individual's income, expenditures, and liabilities. An accountant may also work in project planning, cost analysis, auditing, and financial decision-making. Some specialize in tax preparation and tax planning. Accountants may work for large companies or external accounting firms. They must meet state-specific educational and testing requirements and are certified by national professional associations.

### Key Takeaways

*   Accountants are financial professionals employed by accounting firms or in the accounting departments of large companies.
*   Their roles include monitoring and recording expenses and income, and projecting the costs of proposed new projects.
*   Tax preparation and tax planning are specialized roles for accountants.
*   Many accountants choose to become certified public accountants because the CPA designation is considered the gold standard in the accounting profession.

## History of Accountants

The first professional association for accountants, the American Association of Public Accountants, was formed in 1887, and CPAs were first licensed in 1896. Accounting grew as a profession during the Industrial Revolution. This was largely due to the growing complexity of businesses and the demands of [shareholders](https://www.investopedia.com/terms/s/shareholder.asp) and bondholders for evidence of the financial well-being of the companies in which they invested.

After the [Great Depression](https://www.investopedia.com/terms/g/great_depression.asp) and the formation of the [Securities and Exchange Commission (SEC)](https://www.investopedia.com/terms/s/sec.asp), all publicly traded companies were required to issue reports written by accredited accountants. This change further increased the need for corporate accountants. Today, accountants remain a ubiquitous and crucial part of any business. 

## Duties and Skills of Accountants

Accountants work with companies, governments, and non-profits, or set up private practices. They may perform account analysis, review [financial statements](https://www.investopedia.com/terms/f/financial-statements.asp) and other reports to ensure they are accurate, conduct routine and annual [audits](https://www.investopedia.com/terms/a/audit.asp), review financial operations, prepare [tax returns](https://www.investopedia.com/terms/t/taxreturn.asp), advise on areas that require efficiencies and cost-savings, and provide [risk analysis](https://www.investopedia.com/terms/r/risk-analysis.asp) and forecasting.

An accountant's duties often depend on the type of educational background and designation they receive. Most professionals in the field possess bachelor's degrees and, if employed by a corporation, may require certification to move up within the firm.

Certification requirements vary, with some roles requiring additional educational requirements above the bachelor's degree and successful completion of rigorous examinations. Accountants can have more than one designation. The most common are the [certified internal auditor (CIA)](https://www.investopedia.com/terms/c/certified-internal-auditor.asp), [certified management accountant (CMA)](https://www.investopedia.com/terms/c/cma.asp), and [certified public accountant (CPA)](https://www.investopedia.com/terms/c/cpa.asp). 

Many accountants choose to become CPAs because the designation is considered the gold standard in the accounting profession. In the United States, certification requirements for accountants vary from state to state. But one requirement is universal—the passing of the Uniform Certified Public Accountant Examination. This exam is written and graded by the [American Institute of Certified Public Accountants (AICPA)](https://www.investopedia.com/terms/a/american-institute-of-certified-public-accountants.asp).

> **Important**
>
> There are 671,855 certified public accountants in the U.S. as of August 2024, according to the National Association of State Boards of Accountancy.

## Ethical Standards and Guiding Principles for Accountants

Accountants must abide by the [ethical standards](https://www.investopedia.com/terms/a/accountant-responsibility.asp) and guiding principles of the region where they practice, such as the [International Financial Reporting Standards (IFRS)](https://www.investopedia.com/terms/i/ifrs.asp) or [Generally Accepted Accounting Principles (GAAP)](https://www.investopedia.com/terms/g/gaap.asp).

The IFRS is a set of rules issued by the International Accounting Standards Board. These rules promote consistency and [transparency](https://www.investopedia.com/terms/t/transparency.asp) in financial statements. GAAP is a set of standards that accountants must adhere to when they complete financial statements for [publicly traded companies](https://www.investopedia.com/terms/p/publiccompany.asp) in the U.S.

Certified public accountants have a [fiduciary duty](https://www.investopedia.com/ask/answers/042915/what-are-some-examples-fiduciary-duty.asp) to their clients. They are legally and ethically responsible to be honest and trustworthy and must avoid negligence in their duties. CPAs have real influence over their clients, which means their judgment and work can affect not just an individual but an entire [company](https://www.investopedia.com/terms/c/company.asp)—including its employees, its board, and its investors.

[Accountants can be held liable](https://www.investopedia.com/terms/a/accountant-liability.asp) under the common law doctrine if they:

*   Are negligent in their duties
*   Mispresent themselves or their clients
*   Commit fraud
*   Are guilty of [breach of contract](https://www.investopedia.com/terms/b/breach-of-contract.asp), which occurs when a professional doesn't fulfill their obligations as per the agreement

They can also be held liable under [statutory law](https://www.investopedia.com/terms/s/statutory-liability.asp) by state or federal securities regulatory bodies. This happens when an accountant fails to provide their clients with appropriate services or gives them bad advice.

## How Much Money Does an Accountant Make?

The median annual pay for an accountant in the U.S. was $79,880 in 2023, according to the Bureau of Labor Statistics.

## What Is the Difference Between an Accountant and a Certified Public Accountant?

Accountants and certified public accountants are two different types of professionals. While all CPAs are accountants, not all accountants are CPAs. Accountants typically have a degree in accounting and don't necessarily require a license to practice their profession. They are usually responsible for account reconciliation, analyzing financial statements, budgeting, and reporting financial transactions. CPAs, on the other hand, is a licensed professional. This professional must adhere to standards and codes of conduct and must maintain continuing educational requirements. In addition to some of the duties of the accountant, a CPA must also conduct audits and file reports with the SEC among other duties.

## How Do I Become a Certified Public Accountant?

A certified public accountant is a professional who has passed a four-part examination known as the Uniform CPA Examination, conducted by the American Institute of Certified Public Accounts with input from the National Association of State Boards of Accountancy and state boards of accountancy.

Accountants need both a bachelor's degree in accounting or finance and experience in the field to take the exam. The exam is tailored to each state's requirements and is administered by the state boards of accountancy.

## The Bottom Line

Accountants are always in demand because every company of any size needs one or more of them. They are the ones tracking, analyzing, and auditing the company's income and expenditures. They also have a key role in planning, decision-making, and forecasting, based on their ability to accurately estimate the cost of future projects.  

> **Article Sources**
>
> 1.  Association of International Certified Professional Accountants. "[History](https://www.aicpa-cima.com/resources/article/history)."
>     
> 2.  Roberts, Diane. "[Follow in Footsteps: the First CPAs of 1896-1897 and Accounting Occupation Adoption by the Next Generation](https://publications.aaahq.org/ahj/article-abstract/49/2/73/406/Follow-in-Footsteps-The-First-CPAs-of-1896-1897?redirectedFrom=PDF)." _Accounting Historians Journal,_ vol. 49. no 2., Winter 2022, pp. 73-89.
>     
> 3.  American Institute of Certified Public Accountants. "[Everything You Need To Know About the CPA Exam](https://www.aicpa-cima.com/resources/toolkit/cpa-exam)."
>     
> 4.  NASBA. "[How Many CPAs Are There?](https://nasba.org/licensure/howmanycpas)"
>     
> 5.  Congressional Research Service. "[Introduction to Financial Services: Accounting and Auditing Regulatory Structure, U.S. and International](https://crsreports.congress.gov/product/pdf/IF/IF10701)."
>     
> 6.  PIA. "[Accountant’s Liability: How It Works and What It Means for You](https://piainsagency.com/accountants-liability/)."
>     
> 7.  U.S. Bureau of Labor Statistics Occupational Outlook Handbook. "[Accountants and Auditors](https://www.bls.gov/ooh/business-and-financial/accountants-and-auditors.htm)."
>     
> 8.  American Institute of Certified Public Accountants. "[CPA Licensure](https://us.aicpa.org/becomeacpa/licensure)."
>     
> 9.  NASBA. "[What Is the Uniform CPA Examination?](https://nasba.org/exams/becomingacpa/whatistheuniformcpaexam/)"