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Chapter 5 Notes for Quiz 1

by: Shannon Panagopoulos

Chapter 5 Notes for Quiz 1 ACC 250

Marketplace > DePaul University > ACC 250 > Chapter 5 Notes for Quiz 1
Shannon Panagopoulos
GPA 3.52
Preparing for an Accounting Career
Larry Fee

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Preparing for an Accounting Career
Larry Fee
Study Guide
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This 8 page Study Guide was uploaded by Shannon Panagopoulos on Sunday October 11, 2015. The Study Guide belongs to ACC 250 at DePaul University taught by Larry Fee in Fall 2015. Since its upload, it has received 93 views.


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Date Created: 10/11/15
CH 5 careers in corporate accounting Corporate employers Companies that employ cpas generally divided into aManufacturing the research and development manufacturing sales and distribution of productsservices 2Servicesproviding accounting architectural construction consulting entertainment nancial health care info systems legal professional sports amp other services to businesses consumers and other clients Where cpas work in a company 1 Management acc business partners in an organization providing senior executives with the info and guidance to develop strategic plans set business goals and carry out other management functions and responsibilities participate in valuecreating activities evaluate potential investments developing strategies to increase productivity developing capital mkt plans to fund new programs etc mgt accountants have a higher pro le in organizations than in the past they now belong to or lead executive teams that address strategic and business issues forecasting co39s future nancial performance etc COST ACCOUNTING key responsibility develop and manage info and reporting systems to track a co39s costs costs of labormateriallproviding services etc management accountants assist the company with budgeting including 1 operation budgetforecasts operating revenue expenses amp net income as well as revenue and expenses by product or service line 2 Capital budgetforecasts a co39s longrange capital expenditures ex starting a new productservice line or expanding into a new market considers alternative strategies for nancing expenditures such as lines of credit longterm debt nancing or equity options 3 Cash budgetforecasts cash ows on some form of shortterm basis in contrast with the capital budget39s longterm forecasts heps companies determine if a they have suf cient cash to meet shortterm expenses or bwhether they may need to borrow cash short term or c whether they have a surplus of cash that can be parked in shortterm investments management accountants also responsible for a company39s general accounting maintaining the books and records includes journalizing payroll AP billing and general ledger 2 Internal Auditing Since SOX enacted in 2002 many cos have made substantial investments in designing building or upgrading internal control systems for 2 reasons a to ensure compliance w SOX39s stringent nancial requirements b to protect organizations from mismanagement and fraud many companies have formed separate risk management groups that encompass SOC compliance as well as risk management including business continuity disaster recovery planning and regulatory compliance internal auditors help companies to protect the integrity of nancial data examine and evaluate their co39s nancial and info systems management procedures operational processes and internal controls to ensure that the records are accurate and controls are adequate review company operations evaluating their ef ciency effectiveness and compliance with corporate policies and gov39t lawsamp regulations assist companies to manage risks reduce costs operate more ef ciently and achieve other strategic goals In doing all of the above internal auditors have increased their value to companies In recognition of tis more co39s have created positions for chief auditorvpauditing and reporting or similar titles reporting directly to the CFO or CEO and to a broad board of directors or its auditing committee 3 Financial Accounting Financial accountants deal with stakeholders outside of the company they prepare BS lS Statement of RE Statement of cash ows and other info used by investors creditors analysts gov39t agencies etc nancial accounting provides a look at a co39s nancial performance of an annualquarterlyetc basis company nancial reports have become under closer public scrutinity and nancial accountants are playing a larger role in providing nancial info that meets the expectations of investorsregulatorsother stakeholder has happened since the wake of Enronother corporate scandals and enactment of SOX more than ever companies are measured by the quality of their nancial reporting 4 Tax Accounting ing tax returns often a complicated process for companies and businesses lnterna Revenue Code IRC has thousands of pages Each state has its own tax codes Tax accountants assist with preparation and ling of federal state and local tax returns and other lings aso advise companies on tax compliance preparing for audits by tax authorities or other tax matters assist with tax planning ie evaluating the effects of selling company assetsbuying another companybuying back stockissuing debt are highly valued for their skill and experience in assisting companies to address tax obligations and identify opportunities to defer or reduce taxes 5 Information Technology some develop a specialty in accounting IT which is the result of taking courses or earning an undergrad or grad degrees in the eld of IT may work in the IT department of a company or others draw on their advanced skills to assist the organization with info security fraud detection business intelligence regulatory reporting or the design and development of an ERP enterprise resource management system Certi ed Information Technology Professional CITP offered by the AICPA to CPAs who are AICPA members Program encourages and recognizes excellence in the delivery of technology related services by CPA professions and provides tools training and support to help CPAS expand their lTrelated services amp provise greater bene ts to business academic other organizations Must apply for certi cation FormsStructures of Bus Practice C Corp Partnership LL Partnership S Corp LL Company amp Sole Prop C corporation under United States federal income tax law refers to any corporation that is taxed separately from its owners A C corporation is distinguished from an S corporation which generally is not taxed separately is created by a group of shareholders who own the corporation through shares owners are called members one of most important features of a corporation is its limited liability Partnership A business organization in which two or more individuals manage and operate the business Both owners are equally and personally liable for the debts from the business Limited Liability Partnership A business organization in which two or more individuals manage and operate the business Both owners are equally and personally liable for the debts from the business CPAs and lawyers often practice in this structure S Corporation A form of corporation that meets the IRS requirements to be taxed under Subchapter S of the Internal Revenue Code This gives a corporation with 100 shareholders or less the bene t of incorporation while being taxed as a partnership passes income directly to its shareholders wo being subject to the double taxation of C Corporation LLC Limited liability COMPANY is a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship depending on how many owners there are owners are called members An LLC although a business entity is a type of unincorporated association and is not a corporation LLCs also have features of partnership providing management exibility and pass through income many public accounting consulting law architectural and other professional service rms are structured as LLCs Sole Proprietorship also known as the sole trader or simply a proprietorship is a type of business entity that is owned and run by one natural person and in which there is no legal distinction between the owner and the business Career Paths in Companies 1 FinancialCash Management A A supervising nancial analyst supervises senior and staff accountants assists with short and longterm planning budgeting and forecasting processes assists with monthly close process support project service line or product line management provides analytical decision support services or technical expertise for nancial and operational issues conducts project planning and product pro tability analyses B A Finance Manager Supervises assigned nancial analysts manages monthly closing cycle prepares monthly nancial statements and various detailed analyses ensures all journal entries are properly recorded in accordance w GAAP ensures the accuracy of monthly reconciliation coordinates various audits responsible for prep and coordination of various ad hoc projects and reports responsible for installing modifying documenting and coordinating the implementation of accounting system changes and accounting control procedures assists in coordination and preparation of corporate budgets and forecasts nance manager eligible for promotion after 57 yrs with the company C An Assistant Treasurer supervises assigned managers and staff assists treasurers and the CFO in managing banking relationships reviews documents pertaining to lines of credits and loans assists with nancial oversight of capital project spending assesses foreign exchange risk and implement hedge programs oversee interest rate risk management provides detailed consolidated cash ow projections monitors adherence to corporate credit and cash management policies manages the corporate AP and AR functions ensures appropriate compliance with SOX requirements related to cash debt and equity management an assistant treasurer is eligible for promotion after 79 yrs with the company D Treasurer take on a more strategic role in organizations amp work closely w business units ex consulting with operations on the right type of nancing or assisting in structuring payment options to better meet the needs of the customers duties pg 167 treasurer eligible for promotion after 910 years w the company E AccountingReporting a An Accounting Supervisor supervises AP AR payroll monitors general ledger supervise closing processes oversees timely and accurate processing of info w general acc completes various jobs as directed by managements and supervises amp trains staff to ensure adherence to co policies and procedures an accounting supervisor is eligible for promotion after 35 yrs w the co b An Accounting Manager an accounting manager is eligible for promotion after 57 yrs w the company C An Assistant Controller an assistant controller is eligible for promotion after 79 yr w the company F Controller directs all company planning and budget management functions Duties pg 168 a controller is eligible for promotion after 910 yrs w the company G CFO Chief Financial Of cer Duties 168 H CIO Chief Information Of cer Duties 168169 Lateral Career Growth Not everyone can make treasurer controller CFO or CIO lateral career growth ex Transferring from one department or operating unit to another taking on special assignments moving to another location or working overseas Industry Prospective Narrowing down companies to work for diagram pg 171 g 52 Industryline of businessD locationljcultureDstructureDLargesmall Publicprivate structures company S Corp Partnership LLC Sole Prop Company Characteristics Large C Corps public amp private In general US based multinational or large domestic corporations Employ largest s of people including CPAs Formalized structures may put limits on your freedom to try your own professional and career pursuits within the org would have more exibility in a smaller company amp could take on more responsibility faster and advance more quickly than in a larger org Public vs Private Public pubic companies registered with SEC must le nancial reports on a regular basis CPAs at quotquot companies could spend time assisting companies to prepare these reports for the SEC and other regulators for investors and other stakeholders Since SOX enactment public companies are subject to strict accounting and reporting requirements that affect the CPAs as well as everyone else in the co Private not as structured not subject to same reporting requirements as public companies some private cos have still chosen to adhere to the sane SOX internal control standards and reporting requirements as public cos Makes quotgood business sensequot to do so ie fraud protecting improving the ef ciency of operations managing costs or meeting expectations of investors and lenders and other reasons quottherefore working in a private company you may still have some degree of exposure to working on SOX reporting but the reports could be structured to different stakeholders Ex instead of the 10005 of stakeholders in a public company the report might be designed for a smaller audience like the company39s owners and investors S Corp Partnership LLC offer alternative career paths to the traditional C Corp generaly these enterprises are smaller than C corp but still important employers may have more exibility in your work more responsibility and a chance to advance faster but you may not have thte same career support as in large companies Sole Proprietorships May outsource for acc services or have only 1 fulltime CPA so opportunities for employment may be limited F employed by sole prop work would involve all types of accounting work including book keeping preparing tax returns providing nancial info to lenders etc What Employers Look For Care job skills 1 2 3 4 5 6 7 Analytical understands the whole through an analysis of its components and how they t together nds relationships in apparently unrelated data interprets complex info Communication uses words effectively to impart info or ideas listens carefully to understand others understands how she is being perceived Financial understands and nance relationship of nance and real estate nancial structure of an organization Interpersonal genuine interest in others gets along with ppl of diverse backgrounds able to work effectively w others at every level of an organization Leadership selfaware understands interests of others provides clear directions motivates others to follow a course of action takes risks acts decisively solves problems Learning inquisitive eager to learn acquires ampapplies knowledge learns from experience amp learns from others Teaming work well with others shares credit group prioritiesgt own priorities


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