According to the Bureau of Labor and Statistics, jobs in the accounting career path are growing faster than the average for all occupations. The demand for accounting professionals is projected to grow 10% from 2016 to 2026, adding about 773,800 new jobs.
Accounting is the process of keeping track of income and assets over time. An accounting career path includes preparing financial statements, recording business transactions, calculating costs and gains from initiatives, providing recommendations for mergers and acquisitions, developing and using new technology to track financial performance, tax strategy, and managing health care benefits.
Our Accounting Career Pathway Is Mapped!
In their glory years, Fannie Mae and Freddie Mac, shareholder-owned, federally-chartered financial entities, helped Americans attain their dream of homeownership in two ways. The first business model involves guaranteeing home loans by assuming the credit risk for a guarantee fee. The guarantee fees essentially add up to cover the costs of the loans should it go into default.
Fannie Mae and Freddie Mac secure home loans by buying them from lenders, organizing the loans into mortgage-backed securities (MBS), and selling the securities through Wall Street firms. The second model is investment based. They simply kept some of the home loans bought from lenders and profit from the accrued interest rates (Green and Schnare, 2009).
These two financial giants were why:
The Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corp (Freddie Mac) operated under four types of risk.
Trouble began with management risk in 2003-2004. Freddie Mac’s management team hid $5 billion and Fanning Mae falsely reported $9 billion in profits, all to cash in for more executive bonus payouts. The CEOs, CFOs and accounting firms, deemed to be responsible, lost their jobs. Their heavy investments in subprime and alt-A mortgage loans resulted in a combined loss of $109 billion in 2008.
Subprime and alt-A mortgage loans are loans issued to borrowers with low credit scores and are accompanied by high interest rates. To retain and increase its 73.2% market share, Fannie Mae and Freddie Mac issued securities for subprime and alt-A mortgage loans which fell to credit and interest rate risks.
The federal government took over Fannie Mae and Freddie Mac in 2008 after being funded by the US Treasury for $200 billion and a $500 billion securities purchase by the Federal Reserve to stabilize the crashing housing market.
A survey conducted by Robert Half suggests that those who have earned certification in the accounting or finance profession may receive 10% more in starting salary than the market average. Additionally, CFOs reported that obtaining a certification is valuable for career advancement.
The most common types of certification obtained by accounting or finance professionals are listed in Table 2. The supplemental tables below also provide answers to frequently asked questions.
Obtaining your credentials as a certified public accountant (CPA) depends on your education, passing the exam, and work experience. Although the CPA exam is uniform across all states, the licensure board in each state have different requirements for education and experience.
At the start of the 2007 economic recession, CPA firms cut an estimated 50,000 jobs within the first 20 months. In an interactive survey of 5,600 CPAs, the American Institute of Certified Public Accountants initiated grassroot efforts to determine what the CPA career holds for the next 15 years. The future is bright and responding quickly to client’s needs using accounting expertise, new technology, business intelligence and awareness of regulations are a must (CPA Horizons 2025, 2011).
The core competencies that the savvy accountant needs to demonstrate are communications skills, leadership skills, critical-thinking and problem-solving skills, anticipating and serving evolving needs, synthesizing intelligence to insight, as well as integration and collaboration. Although clients will continue to expect more skillsets over time, an accountant with technical expertise in finance ranks among the highest.
Occupational Outlook Handbook: Business and Financial. (2018). [PDF] Washington DC: U.S. Bureau of Labor Statistics: Office of Occupational Statistics and Employment Projections. https://www.bls.gov/ooh/business-and-financial/home.htm. Available at: http://www.bls.gov/ooh [Accessed 25 Apr. 2018]
Accounting Careers: A handy guide to the good, the better and the best one for you. (2015). [PDF] Pennsylvania: American Institute of Certified Public Accountants (AICPA), pp.1-16. Available at: https://www.picpa.org/docs/site/future_cpasdoc/classroomresources/aicpa-start-here-go-places-careerguide.pdf?sfvrsn=0 [Accessed 25 Apr. 2018].
Overview of Accounting Concentration & Potential Career Paths. (n.d.). [PDF] Atlanta: Georgia Institute of Technology, pp.1-2. Available at: https://www.scheller.gatech.edu/degree-programs/undergraduate/files/Accounting.Resource.Guide.pdf [Accessed 26 Apr. 2018].
Green, R. and Schnare, A. (2009). The Rise and Fall of Fannie Mae and Freddie Mac: Lessons Learned and Options for Reform. [PDF] Washington DC: Empiris LLC, pp.1-58. Available at: https://lusk.usc.edu/sites/default/files/working_papers/wp_2009-1001.pdf [Accessed 26 Apr. 2018].
MCLEAN, B. (2005). The Fall of Fannie Mae. [PDF] Fortune Magazine. Available at: http://archive.fortune.com/magazines/fortune/fortune_archive/2005/01/24/8234040/index.htm [Accessed 27 Apr. 2018].
Folger, J. (2016). Alt-A Mortgages: How They Work. Investopedia. Available at: https://www.investopedia.com/articles/personal-finance/020816/alta-mortgages-how-they-work.asp#ixzz5DoaetOOb htm [Accessed 27 Apr. 2018].
Half, R. (2007). Guide to Certifications: For Accounting, Finance, and Operations Management. [PDF] Robert Half International Inc. Available at: https://www.accountingweb.com/sites/default/files/guide_to_certifications_robert_half.pdf [Accessed 27 Apr. 2018].
CPA Requirements 2018 by State. (2018). [PDF] AccountingEdu.org. Available at: https://www.accountingedu.org/ [Accessed 28 Apr. 2018].
Corkern, S., Parks, S. and Morgan, M. (2013). Embracing the Future: What Can Accounting Graduates Expect? [PDF] Mississippi: American Journal of Business Education, pp.1-8. Available at: https://files.eric.ed.gov/fulltext/EJ1055009.pdf [Accessed 28 Apr. 2018].
CPA Horizons 2025. (2011). [PDF] American Institute of Certified Public Accountants (AICPA), pp.1-60. Available at: https://www.aicpa.org/content/dam/aicpa/research/cpahorizons2025/downloadabledocuments/cpa-horizons-report-web.pdf [Accessed 28 Apr. 2018].