Public vs Private Accounting Top 7 Differences with infographics

Not all private accounting jobs require a CPA certification, but it’s common to see it listed as a preferred qualification. Private accountants help businesses with various accounting responsibilities, such as tax preparation, financial analysis and internal auditing. If you want to specialize in a particular area of accounting, such as tax or audit, public accounting may be a better fit as it offers opportunities to work on many projects and clients. However, if you prefer to focus on a specific industry or company and gain expertise in internal financial processes, private accounting would be the right choice. As for public accountants, they have unpredictable work environments and schedules.

As “external” accountants, public accountants provide services to a wide range of clients, who many include large corporations, small businesses, not-for-profit organizations, and government agencies. Public accountants, on the other hand, have a range of clients and are either self-employed or members or employees of public accounting firms. Public accountants often work in teams, collaborating with colleagues to deliver high-quality services tailored to the specific needs of each client. Additionally, public accountants may pursue certifications such as certified public accountant (CPA) or chartered accountant (CA) to demonstrate their expertise in auditing and financial reporting. This sector is known for its fast-paced and client-centric environment, with professionals frequently facing tight deadlines and demanding workloads, particularly during peak seasons like tax season. Despite the challenges, public accounting offers ample opportunities for career growth, professional development, and the satisfaction of making a tangible impact on clients’ financial success.

The Distinction Between Public Accounting and Private Accounting

• Although both public and private accounting are well-paid, public accountants usually tend to get paid more than private accountants.
• If you’re ready to take the next step, visit the Accounting degree page to learn more about what Rasmussen College has to offer.
• Yes, many accountants switch between public and private accounting during their careers.
• Public accounting refers to a business or individual accountant who provides services for multiple clients, which can be individuals or large corporations.
• These will help you to determine the focus of your career path, should you be hired.
• Eventually these accountants transition into a private accounting role where the demands of the job can be a little more accommodating.

The most significant difference in public vs. private accounting is that a private accountant works for another company. A public accountant might work for a firm but could also work freelance or own their own business. Those who do auditing for public companies must first meet specific requirements and register with the Public Company Accounting Oversight Board. Bluntly stated, many people do not like to work in the public accounting field because they find that passing judgment on the work of other accountants is not fulfilling.

Interested in pursuing a degree?

If you have a passion for business, public vs private accounting consider merging your interests by pursuing a career in private or corporate accounting. Examples of corporate accounting roles include tax, management, or financial accountant; internal auditor; chief financial officer (CFO); or various management positions, such as tax manager. According to sources like Glassdoor, Indeed, and Salary.com, the average salary for corporate accountants ranges from about $63,200 to $69,300.

• If the work is being performed strictly for the benefit of a specific company, it is safe to conclude that this is a function of private accounting.
• In contrast, Private accounting is the accounting of the company’s financial information in which the accountant is generally employed as the internal manager.
• If you’re looking for a career path that doesn’t require earning a CPA license, private accounting is the right path for you.
• Continuing education throughout your career is required to maintain a CPA license.
• As with any profession, there is plenty to love about both roles, but there are some downsides, too.

Education

Bureau of Labor Statistics, job rates for accountants and auditors are increasing at a faster than normal rate. By 2030, there should be almost 100,000 more jobs available in this vital field. Similarly, private accountants need to be comfortable examining other departments of the same company. The primary skills for both include self-motivation, integrity, organizational skills, ability to manage deadlines, strong communication skills, and proficiency in new technology. If public accounting seems intriguing, it’s only one side of the accounting industry. There are also a multitude of career opportunities in the other major sector—private accounting.

Choosing the Right Path

Depending on where you apply to work, you’ll be working in a public agency or in a private accounting firm. Public accountants usually select a specialty, such as tax accounting, auditing, forensic accounting, or consulting, which has its own set of responsibilities. These individuals may begin their careers as entry-level accountants and progress through the ranks of senior accountants to finally take senior management roles in the business, such as audit partner.

The location also impacts the earning potential for public and private accountants. The Bureau of Labor Statistics (BLS) reports that the top three paying states for accountants and auditors are the District of Columbia, with a mean wage of $110,750, New York, with $110,320 and  New Jersey, $102,040. On the other hand, an “internal” job means that you are working as an accountant solely for your employer. The company doesn’t have a long list of clients for which it provides accounting services. Public accounting will benefit the general public, or it will only benefit the company that employs you.

The BLS estimates that employment of accountants and auditors is projected to grow 4% from 2022 to 2023, with about 126,500 openings projected each year. While one of the most significant differences between public and private accounting is the work environment, both have a period in the year that is their busiest. Public accountants are usually busiest during tax season, whereas private accountants are at the end of a fiscal quarter. Moreover, they set up internal systems to record business transactions, which helps inform a company’s financial statements.

ACCT 551 Taxation for Corporations (Graduate Level)

The type of work you want to do, your personality traits and your career goals can help you decide which path is right for you. Generally, entry-level salaries may be similar, but public accountants may see faster salary growth as they advance. So, what’s the distinction between these accounting specialties, and which is the best option for you? Several factors may determine the decision, including the job responsibilities, the daily routine that comes with the profession, one’s strong skills, and career goals. As such, understanding the differences between the two is significant when pursuing either professional path. Private accountants are typically employed by a single employer and review internal business documents to plan budgets and evaluate fiscal performance.

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. Look at the names of public accounting firms and private firms—they can be confusing. If you work for a for-profit accounting firm that has private accounting clients, you may be in a public accounting practice. If you need to prepare public tax documents, you are in a public practice vs a private accounting practice.