Government accounting is the same as accounting in private organizations. It’s also different because of the regulations and policies that government accountants have to follow. Government accountants and auditors are required to follow a certain set of guidelines established by the Governmental Accounting Standards Board or GASB or the Federal Accounting Standards Advisory Board or FASAB. Certifications and education of government auditors are the same as for private accountants and auditors.
Who Sets the Standards for Government Accounting?
Federal accountants follow accounting and auditing standards created by the FASAB. Local and state accountants follow a similar set of guidelines—the GASB.
Each set of standards are imposed on every government accountant on top of the Code of Ethics. Aside from ensuring that accountants carry out their daily responsibilities in an ethical way, the GASB guides them as they make everyday decisions about every accounting process they are involved in. Some of the content areas discussed include concepts statements, GASB interpretations, GASB implementation guides, technical bulletins and statements of governmental accounting standards.
Concepts statements assist accountants in identifying their objectives. They also help to form the foundation for financial reporting standards that are consistent over time.
The statements show the expected accounting standards that government accountants are to follow. These statements are interpreted for accountants and auditors. The GASBs in each state are also responsible for issuing technical bulletins that aid each government accountant as they work.
The FASAB were established in October 1990, by the Director of the Office of Management and Budget, the Secretary of the Treasury and the Comptroller General of the United States. Lacking a consistent set of accounting principles for government accountants, this Board identified each standard which follows the generally accepted accounting practices or GAAP for federal government agencies.
GASB is a private sector organization. Like the FASAB, GASB has created standards of financial accounting and reporting for each state and local government. It has the same guidelines that each state and local government accountant is expected to follow.
Because each government accountant, state, local and federal, has earned their CPA certification, they are required to follow ethics and practice guidelines that ensure the work they produce is accurate.
Government auditors and accountants are required to have, at minimum, a bachelor’s degree in accounting or a closely related field. Beyond the degree, they are also required to obtain a certification, such as the Certified Public Accountant or CPA.
As far as accounting courses, accounting majors should take twenty-four semester hours in accounting or auditing. A few hours of business law may also suffice.
A substantial number of the accountant’s course work should be in either accounting or auditing. If they don’t have the twenty-four hours required, then successful work performance at the accountant level in auditing, accounting, valuation engineering or financial institution examining may be an acceptable substitute.
The applicant who hasn’t earned a bachelor’s degree in accounting will also go before a panel consisting of two or more upper-level professional accountants or auditors. This panel determines whether this applicant holds a good knowledge of accounting, auditing and other, related fields. The applicant’s knowledge must be broad, current and deep. They should be able to show a previous level of advancement that an accountant with a four-year accounting degree would possess.
Government employers will require applicants for accounting or auditing positions to hold a certification, such as the CPA. Without this vital piece of paper, applicants will not get past the initial application stage.
Other accountant and auditor certifications include the Certified Management Accountant (CMA). Applicants who are vying for management positions will need to have this certificate.
A third certification is the Certified Internal Auditor (CIA), which allows applicants and new hires to begin working on internal audits within a government agency. It’s also the only certification that internal auditors can obtain.
The Certified Fraud Examiner (CFE) gets to work on more exciting and captivating kinds of accounting. These specialists are trained and educated in detecting fraud within a government agency. Their knowledge also enables them to prevent fraud. The CFE detects the fraud, gathers evidence, gathers statements and fills out reports. They also testify in court.
The Certified Forensic Accountant searches for evidence of illegal activities. This specialist also testifies in court about their findings. Their level of education and experience enable them to develop legal opinions about the cases to which they’ve been assigned. They help in investigations. They can also expect to provide litigation support and estimate the amount of economic damage.
Cross-disciplinary certifications include the Certified Information Systems Auditor (CISA). This specialist provides systems audit control and aids in security. An in—depth knowledge of information systems is vital.
The Chartered Financial Analyst (CFA) specializes in finance and investments.
Certified Financial Planners (CFP), as their titles indicate, work solely in financial planning.
Certified Treasury Professionals (CTP) focuses completely on accounting at the Treasury level.
Global certifications include the Chartered Accountant (CA), which is focused mainly in England and Wales.
The Certified General Accountant practices in several countries, such as Bermuda, Canada, Caribbean, Hong Kong and China. The CGA can conduct audits province-wide in Canada.
Governing Body (GASB)
States and cities operate under the Governmental Accounting Standards Board (GASB). This is an independent, not-for-profit and private sector organization that works to develop standards of financial accounting. It also identifies areas within current standards that need improvement.
GASB standards rely on GAAP in developing and enforcing their standards of accounting.
In communicating with government accountants and auditors, GASB creates concepts statements, which point out the basic concepts and objectives. These are used to maintain consistency in standards of reporting.
Other communications include statements that explain expected accounting standards. Statements are interpreted by GASB. Technical bulletins are also sent to government agencies.
Salary and Career Outlook
Government accountants and auditors are generally paid well. As of May 2017, the median annual wage was $69,350. Depending on the experience and location of the individual accountant or auditor, their pay may be lower or higher.
The employment of accountants and auditors is expected to grow 10 percent between 2016 and 2026. This growth level is anticipated to be faster than for other occupations.
This growth depends heavily on the overall health of the U.S. economy. In a robust economy, more government auditors will be needed and hired; in a weaker economy, hiring will be slowed.
Where Can Government Accountants Work
Auditors and accountants have been hired to work for city, state or federal offices (CIA).
Forensic accountants are hired to work for the Federal Bureau of Investigation (FBI). These professionals will examine assigned cases, develop an overall picture and develop an image of the financial crimes that have been alleged to have been committed. Forensic accountants also identify all suspicious transactions and activities that may have taken place. They also find and forward new leads to other investigators on their team. Although they can work at FBI headquarters, forensic accountants can work anywhere within the United States.
Forensic accountants wanting to work with the FBI should have their Certified Forensic Accountant certifications, because they will be expected to carry out complex forensic financial investigations. In addition, they will have to be able to hold control of the financial investigation, so they can explain their findings to other agents on the case.
All forensic accountants must have, at minimum, a bachelor’s degree in accounting. Their communication and analytical skills are also expected to be strong. All agents and accountants should be able to work well on a team.
Accountants at the Central Intelligence Agency (CIA) will work much more closely with transactions within the agency. They are expected to know how to work with financial government activities, apply accounting concepts, principles, theory and standards to every transaction for which they are responsible.
As with accountants at the FBI, CIA accountants should hold a bachelor’s degree or a minimum of 24 semester hours of accounting courses documented on their unofficial transcripts. They should also possess knowledge of GAPP, cost accounting standards and financial and federal accounting standards.
Applicants who hold advanced degrees or professional accounting certifications (CPA, Certified Governmental Financial Manager, CIA or with the ability to analyze and solve complex accounting equations will be seriously considered. Unlike the FBI, all CIA accountants will have to work and live within the Washington, D.C. metro area.
The U.S. Securities and Exchange Commission (SEC) also hires qualified accountants. The Office of the Chief Accountant enforces a strict auditing and accounting policy, with the chief goal of ensuring the transparency of financial reporting. This is enforced so the professional performance of public company auditors will be kept at a consistently high level, and so that financial statements submitted for investment decisions will be reliable.
Accountants within the SEC work in three areas: professional practice, international affairs and accounting. They are the principal advisers to the SEC.
The U.S. Government Accountability Office (GAO) also relies heavily on qualified and certified accountants and auditors to complete its work. Accounting and auditing employees promote financial management best practices. They carry out financial analyses, determine internal controls and help to identify and provide improvements in several areas of finance and accounting.
The GAO supports the basics of financial management so that government agencies are able to provide financial information that can be reliably used to make money-related and economic decisions. The information the GAO relies on also helps to measure the performance of government agencies, ensuring they are managing their programs well.
GAO auditors conduct yearly audits of the U.S. governments overall financial statements, as well as those of government agencies, such as the IRS.
Auditors wishing to work for the GAO are required to hold an undergraduate or graduate degree. This must include 24 semester hours or the equivalent of accounting classwork.
Entry-level financial auditors will be assigned to the GAO’s Professional Development Program within the Financial Management and Assurance Team.
At the state level, auditors and accountants are responsible for working with financial records. They examine the records of the agencies within their state; they also accurately prepare financial records.
Accountants in a state government office verify that taxes have been paid correctly and in a timely manner.
Both accountants and auditors review the financial operations of their state and review the operations of state organizations.
Possible job titles a state auditor or accountant might hold include accounting officer, accounting manager, accounting supervisor, business analyst, cost accountant, CPA, general accountant, financial reporting accountant, cost accountant or staff accountant.
A state-level accountant’s job responsibilities can include computing taxes owed, preparing tax returns and verifying that taxes owed have been paid properly. They may also examine financial statements for accuracy and compliance with state and federal regulations.
State-level accountants must organize and maintain financial records; inspect account books and accounting systems for efficiency and the use of GAAP.
They also assess their agency’s financial operations, making best-practices recommendations to their supervisors and management.
Accountants will also search for ways to reduce the costs of operating their agencies, ensuring they use their revenues in the wisest way and improving profits (for a private agency).
State-level accountants mush hold at minimum, a bachelor’s degree or a degree in a related field. Some accountants may be required to hold an advanced (master’s) degree in accounting or business administration (MBA).
Accountants and auditors mainly work indoors, in an office setting. When they are hired, they will work full-time. State-level accountants and auditors will work in every state agency, such as law enforcement, taxation and revenue, child and family services, public health, motor vehicle divisions and departments of transportation.
An entry-level accountant at the state level should understand GAAP and GASB. They will apply conceptual accounting principles as they prepare or analyze financial statements. They will carry out accounting functions (accounts payable/receivable, fixed assets and payroll), though assigned tasks can vary widely.