What Is Accounting, Where Can it Take You and What Skills Do You Need?

Accounting what is it?

Accounting is a vast field with many intricate layers so we’ll give you an easy definition of accounting first. Then we’ll look at what are the 4 types of accounting and what skills you need to become an accountant. 

If we had to explain the term accounting in just a few words it would be that it’s the recording, measurement, and communication of financial transactions. This is a very broad definition in order to cover all the different areas of accounting. 

It helps to break accounting into four main areas, which we’ll do now, but under each of these are many strands and unique job prospects too. 💫

What are the 4 types of accounting?

The four types of accounting are: corporate, forensic, public, and government. Let’s look at each of these so you can see just how different a day in the life of accountants working in the various areas can be.

Corporate accounting definition

Corporate accounting involves analysing and preparing a company’s financial data which can be for internal purposes or external such as tax. Jobs in this area include financial controllers and accounting clerks. Financial controllers are the lead accountant for a company. You can define accounting clerks’ duties as being responsible for record-keeping and someone who assists accountants or accountant managers. 

Forensic accounting definition

Forensic accounting involves auditing, investigating, and researching financial data that is often difficult to obtain or find. The purpose of the work can be to track down fraudulent activity, identify irregularities, quantify losses, and prepare reports on the findings. Work can be with the government or companies, and there are even forensic accountants who prefer to work privately and offer freelance services. 

Public accounting definition

A public accountant in the UK is usually a member of the Certified Public Accountants Association (CPAA). Public accounting firms work with external clients (companies or individuals) to ensure that their finances are accurate and up to date. 

Government accounting definition

Government accounting is sometimes more difficult to enter into because the nature of the work often involves handling sensitive or confidential data. Jobs can involve a wide number of duties such as auditing tax returns or managing financial records for a government body. 

Top five accounting skills definitions

Now that we’ve highlighted how varied accounting careers can be, you’ve probably guessed that the skills you need will also be quite diverse. Just because you nail your maths exams doesn’t necessarily mean you’d enjoy working as an accountant. 👇

Here are the five most common skills you need to get into accounting:

1. Prepare financial statements
2. Data analytical skills
3. Critical thinking
4. Time management
5. Communication skills

1. Prepare financial statements

You’ll need to have excellent numeracy skills and be able to prepare financial statements. You’ll have to understand how to use accounting software and the relevant accounting principles that apply to the area you work in. Of course, if working with numbers is your thing, you’ll find this skill an easy one to master with the right training and education. 

2. Data analytical skills

You’ll most likely be working with large sets of data and you’ll need to be able to analyse it all quickly and efficiently. Sometimes accounting software can’t help you and you’ll need to manually find any discrepancies or identify patterns to help businesses. 

3. Critical thinking

You’ll need to come up with working strategies and solutions to problems. Critical thinking helps accountants look at problems from different angles in order to come up with the best solution. 

4. Time management

Time management is essential because you’ll have some serious deadlines that you can’t miss or there could be repercussions for the company, government, or client you work for. Depending on the nature of your work, you may need to finesse the skill of scheduling gaps in your diary to be ready for any emergencies or urgent requests you receive. This could be seasonal or a regular occurrence in your line of work. 

5. Communication skills

While you may have your nose stuck in a spreadsheet or be looking at a computer program most of the day, you’ll still need to communicate with colleagues and perhaps external stakeholders such as clients or industry professionals. If you get into a managerial position then having good communication skills will be even more important so you can lead a happy and professional team. 

As you can see, there is a mix of essential technical skills as well as soft skills that lead to great accountants. Of course, skills like data analysis are going to come with time and from studying. 

If you’re naturally a critical thinker, feel confident enough about communicating with others, and are not a serial procrastinator who misses deadlines, you could definitely consider accounting. For the fine-tuning of your technical accounting skills, there are always tutors to help you. 

Whether you’re at school or uni and could do with a hand, we have quality tutors to help in any situation. It doesn’t matter whether you’re just trying to scrape by your next exam or you want to be top of the class, let us help you achieve your academic goal with minimal fuss by giving you personalised one-on-one support.

What is accounting body membership?

Accounting bodies have a range of functions that can include offering qualifications, providing financial advice, running networking events, and representing the accounting profession. 

There are seven accounting bodies in the UK and ROI:

1. ACCA - Association of Chartered Certified Accountants
2. CIMA - Chartered Institute of Management Accountants
3. CIPFA - Chartered Institute of Public Finance and Accountancy
4. ICAEW - Institute of Chartered Accountants in England and Wales
5. CAI - Institute of Chartered Accountants Ireland
6. ICAS - Institute of Chartered Accountants of Scotland
7. AIA - Association of International Accountants

Here are the numbers of members and students under each accounting body in the UK and ROI:

As you can see, ICAEW is by far the largest accounting body and it’s part of Chartered Accountants Worldwide, a global network of members. Joining an accounting body can be very rewarding as clients often look for accountants who are accredited by one of these organisations. 🙌

Well, are you chomping at the bit to get started in accountancy now? If so, good on you. As one of the world’s oldest professions, it’s a safe bet it will provide you with plenty of opportunities for the span of your career. Good luck in your studies and we’d like to offer you a free trial lesson if you ever need or want private tutoring. Simply book it online and you’ll be on your way to better grades in no time.