Government accounting is the same as accounting in private organizations but it takes place in the public sector and public accountants and others are employed within a department or government office at the federal level (national), state, or local level in a government accounting job. It’s also different because of the regulations and policies that those in a government accountanting job have to follow. Accountants in government positions and internal auditors are required to follow a certain set of guidelines established by the Governmental Accounting Standards Board (GASB) or the Federal Accounting Standards Advisory Board (FASAB). Certifications and education of government auditors are the same as for private accountants and auditors, though there are specific government certifications you can earn which may require additional qualifications and accounting skills, such as the certified government auditing professional credential or a certified government financial manager.
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 from 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, standards set by each board of accountancy 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 individuals in public accounting in identifying their objectives no matter what government accounting job they may hold. They also help to form the foundation for financial reporting standards and requirements that are consistent over time and across the United States.
Each statement shows the expected accounting standards that those in a government accounting job must follow. These statements are interpreted for accountants and internal auditors in government positions. The GASBs in each state are also responsible for issuing technical bulletins that aid each government accountant as they work.
The FASAB was 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 institute did an analysis and identified each standard which follows the generally accepted accounting practices, or GAAP.
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 many government accountants (state, local, and federal) have earned their certified public accounting (CPA) certification, they are required to follow ethics and practice guidelines that ensure the work they produce is accurate.
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Government auditors and accountants are required to have, at minimum, a bachelor’s accounting degree or one in a closely related field from a college, university, or business school approved of by one of the US regional accrediting agencies. Beyond this degree program, they may also be required to obtain additional qualifications in the field of accounting, such as the Certified Public Accountant credential, or CPA.
As far as educational requirements, accounting majors should take twenty-four semester hours in accounting or auditing. A few hours of business law may also be necessary if you intend to take the Uniform CPA examination and gain all necessary accounting skills.
A substantial number of an accountant’s or CPAs credit hours should be spent in study of either accounting or auditing. If they don’t have the twenty-four hours required, then successful work performance and experience in accounting at the accountant level in auditing, accounting, or valuation engineering 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 information related to the field of accounting. The applicant’s knowledge must be broad, current, and deep. They should be able to show a previous level of accounting skills knowledge and advancement that an accountant with a four-year degree from an accounting program would possess.
Some certifications require that you earn a graduate level degree, while others are accessible to those with a lower degree level. Either way, most accounting degree programs introduce students to tax law and tax documents, tax preparation, accounting software and technology, accounting records, internal audits, and various other accounting skills knowledge. After earning a degree, you may start working in an accounting career with the government or an accounting firm in management or managerial accounting, forensic accounting, cost accounting, or as a tax examiner or in tax preparation. No matter where you end up, your previous and continuing professional education will serve you well and provide you with many opportunities in the industry.
Government employers may require applicants for accounting or auditing positions to hold a certification, such as the CPA. Without this vital certification, applicants will not be able to advance through their career path in a government accounting job as easily.
Other accountant and auditor certifications include the Certified Management Accountant (CMA). Applicants who are vying for management positions will do much better if they hold this certificate.
A third certification is the Certified Internal Auditor (CIA), which allows applicants and new hires to begin working as internal auditors within a government agency. It’s also the only certification that internal auditors can obtain to prove they can perform the job.
The Certified Fraud Examiner (CFE) gets to work on more exciting and captivating types of accounting and can also find work in the corporate world at all levels. These specialists are trained and educated in detecting fraud within an agency. Their knowledge also enables them to prevent fraud. The CFE detects the fraud, gathers evidence, gathers statements, and fills out reports. They may also testify in court.
Those who work in forensic accounting, like the certified forensic accountant, search for evidence of illegal activities. This specialist may also testify 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 and part of the education requirement for this certification.
A Chartered Financial Analyst (CFA) specializes in finance and investments.
Certified Financial Planners (CFP), as their titles indicate, work solely in financial planning and use their accounting skills, knowledge, and expertise to help their clients.
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 out to keep all public accounting professionals in governmentd positions up to date.
Salary and Career Outlook
Government accountants and auditors are generally paid well. As of May 2017, the median annual wage was $69,350 according to the Bureau of Labor Statistics (BLS) report. Depending on the experience and location of the individual accountant or auditor, their pay may be lower or higher each year.
The employment of accountants and auditors is expected to grow 10% 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 are hired to work for city, state, and federal offices.
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 accounting degree. 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 reports 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 these 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 agencies such as the Internal Revenue Service (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 data. They will carry out accounting functions (accounts payable/receivable, fixed assets and payroll), though assigned tasks can vary widely.