Public versus private accounting: Which is right for you?
In the broadest sense, accounting is the process of recording, analyzing, and reporting financial transactions for an organization or individual. However, many specialties exist within the accounting industry, most notably public and private accounting. While they have similarities, the two specialties are quite different in several ways.
Public and private accountants service different types of clients, have distinct job responsibilities, and follow unique career paths. To make an informed decision about the career path that’s right for you, distinguishing between public versus private accounting is critical.
What is public accounting?
Public accountants work with a wide variety of clients, from individuals to corporations, and help them prepare financial documents.
Given the diverse nature of their client base, public accountants have a broad range of responsibilities. They examine financial records for accuracy and completeness before they’re disclosed publicly. These documents range from individual tax forms to financial statements for investors. A public accountant’s daily duties may include the following:
Tax filing and reporting
Public auditing (third-party certified examinations)
General accounting processing
Public accountants are known for helping people prepare their income taxes and with financial planning. They can also specialize in several other areas, such as auditing; bookkeeping; or forensic accounting, which entails investigating financial crimes, such as securities fraud and embezzlement or other potentially criminal transactions.
Education and certification
Public accountants typically need at least a bachelor’s degree in accounting or a related field, though in some states, public accounting work experience can be substituted for a degree. They must also have a certified public accountant (CPA) license. A CPA license allows you to file reports with the U.S. Securities and Exchange Commission (SEC). To obtain a license, you must pass the Uniform CPA Examination administered by the American Institute of CPAs (AICPA). Additionally, CPA holders must maintain their licenses by earning continuing education credits.
CPAs can work for public accounting firms or themselves. Depending on the type of clients they work with, public accountants can have somewhat unpredictable schedules. They may have to travel to their clients and meet strict deadlines. Tax season (traditionally January 1 to April 15) is usually the busiest time of year for public accountants.
What is private accounting?
A key difference between public and private accounting is that private accountants — sometimes referred to as management or corporate accountants — work for a single entity, such as a company or nonprofit, to handle internal financial matters. Private accountants set up systems to record business transactions and assess fiscal information to guide decision-making.
Compared with public accountants, private accountants have a narrower scope of work, focusing solely on the internal financial workings of the entity that employs them. They analyze and prepare financial reports and work with financial managers to plan budgets and assess fiscal performance. Day to day, their primary duties focus on management reporting and can often include payroll and invoicing. An external (public) accounting firm usually audits the work of private accountants.
Education and certification
You'll typically need a bachelor's degree to enter the private accounting industry. Certification, however, isn’t a prerequisite for private accounting, but some certifications are available if you’re looking to bolster your credentials, such as Certified Internal Auditor (CIA), Certified Management Accountant (CMA), and Certified Fraud Examiner (CFE). A CPA is also valuable for private accountants. Each of these certifications can help improve your job prospects.
Private accountants generally have a slightly more stable schedule than CPAs, working standard business hours, with less travel involved. They typically work longer hours around the annual audit and quarterly reporting periods.
Career paths for accountants
Career paths in both public and private accounting typically begin with entry-level positions and progress to more senior roles.
Many public accountants start as staff accountants and move into roles as senior accountants and managers as they advance. The highest position for a CPA is audit partner at a firm. Some public accountants choose to open their own practice.
Private accountants often start in positions such as cost accountant or junior internal auditor, advancing into more senior roles such as account manager or budget director. The most senior management position in private accounting is chief financial officer (CFO).
Other types of accounting positions at various levels of seniority include the following:
Both public and private accountants may move from one type of accounting to another. CPAs often move into private accounting or internal auditing, while private accountants may become internal auditors or move into roles such as controller or treasurer. A career change can be challenging since the knowledge base and skill set for public versus private accounting are quite different, but it can be done.
According to the U.S. Bureau of Labor Statistics (BLS), the median annual wage for accountants was $71,550 in 2019. The BLS projects employment in the accounting sector to grow 4% from 2019 to 2029, on par with its job growth projection for all occupations.
Other types of accounting
Some of the numerous other accounting specialties that fall under the scope of public and private accounting include the following:
Government accounting. Government accountants work at the federal, state, and local levels. They focus on the valid expenditure and collection of monies as originally authorized and provide expertise in areas such as appropriations, budgeting, grants, and taxes.
Auditing. Internal auditors closely examine financial and accounting records for accuracy and ensure that companies comply with tax law.
Financial accounting. Financial accountants record and aggregate financial transactions to produce detailed statements, which are then shared with external parties, such as creditors, lenders, and investors.
Actuarial accounting. Actuaries analyze an organization’s finances and use their knowledge of statistics and mathematics to estimate risks and returns.
You have goals. We have a path.
While many differences exist between public and private accounting, both fields can be highly rewarding and potentially lucrative.
Whichever accounting career you’re interested in pursuing, we’re here to assist you in your search for an online program that can help you achieve your professional goals.