Public accounting: The public accounting profession has achieved the same stature as medicine and law. Public accounting refers to the work done by independent Certified Public Accounting (CPA) firms that audit the books of companies to insure that their financial statements and records are not materially misstated.
- In order to become a licensed certified public accountant, an individual must pass the Uniform CPA Exam.
- CPAs are called upon to perform numerous services, including auditing, tax prep, consulting and advisory services.
Private accounting refers primarily to the private sector of the economy and involves the analysis and recording of financial information by accountants who are employees of the business entity.
- Private accountants work under the direct control of CAOs, or controllers.
- Private accountants, among their many duties, prepare budgets and departmental performance reports, which management uses to make managerial decisions.
Governmental accounting: This branch refers primarily to the accounting functions performed for federal, state and local government institutions. Governmental accounting also includes the financial reporting functions applicable to hospitals, charitable organizations, colleges and voluntary health and welfare organizations.