Financial Accounting (checksheet)
The Financial Accounting Option provides students with a mixture of finance and accounting electives, and students pursuing this option will often double-major in the two subjects. Accounting and finance are highly related to each other – having a strong accounting background will make a graduate better at finance and vice versa. The Financial Accounting Option prepares students for a number of career paths within both the finance and accounting fields. Common career paths for which the Financial Accounting Options is particularly relevant are auditing, tax, internal audit (within a company), and consulting.
Auditors are an essential part of the capital markets, because they ensure that companies are preparing their financial statements properly. Auditors work for accounting firms, and their job is to review a company’s financial records and financial statements. Auditors are experts on accounting procedures and rules, and their job is to make sure that the proper procedures and accounting rules are been followed by each company they review. The largest employers of auditors are the Big 4 accounting firms: PriceWaterhouseCoopers, Deloitte, KPMG and Ernst & Young. There are, however, a number of other national, regional and local auditing firms for which one can work.
In order to become an auditor, a graduate must pass the Certified Public Accountant (CPA) exam, which is a nationwide licensing exam. In order to sit for the CPA exam, graduates must have completed 150 semester hours of college course credits. Students generally reach the 150-hour threshold by either double-majoring in finance and accounting via the Financial Accounting Option or by following their undergraduate finance degree with a Master’s Degree in Accounting.
Corporate Accounting and Internal Audit
Company’s maintain their own staffs of accountants to maintain their financial records and prepare their financial statements. The Financial Accounting option (and the finance/accounting double major) are excellent preparation for a career in corporate accounting, since the finance coursework enables accountants to better understand the valuation and financial impact of accounting line items. Internal Audit is another accounting area within companies. Internal auditors check the work of the company’s accountants to ensure compliance with proper accounting procedures, and act as an internal check and balance to make sure that the accounting work is properly done so that the company’s external auditors do not find any problems.
Tax Accountants have two primary functions. The first is to ensure that companies calculate their taxes correctly and pay the amount legally owed to various governments overseeing the areas in which they do business. The second function of tax accountants is to analyze a company’s tax situation and find ways in which the company can modify its business to reduce its tax bill. There are many ways that this can be done legally. In addition to having their own tax accountants inside the company, many company’s use tax consultants from the large public accounting firms to help them with this work.
Many finance majors pursue careers as consultants. Consultants are professionals who provide advice to companies, government entities and other organizations that are trying to solve problems or improve their operations. A consultant collects data about the problem and then devises a solution that they then present to the client. An attractive aspect of a career in consulting is the variety of assignments and learning opportunities that one receives as a consultant. Every year brings new challenges and problems to solve, keeping the job interesting and stimulating. As a result, consulting is an excellent career for students that hate routine. However, consulting jobs also often involve significant amounts of travel, with consultants often away from home for multiple days each week.
To be successful as a consultant, one must have strong analytical and problem solving skills, strong presentation skills, and strong people skills. Within the consulting career path, there are a number of subspecialties open to finance majors. These include management consulting, risk consulting, valuation consulting and information systems consulting. Management consulting is difficult to enter straight out of undergraduate finance program (MBAs tend to be more frequently hired), but the others areas of consulting are all generally available to undergraduate Virginia Tech finance majors.
The most significant employers of Virginia Tech finance students in the consulting area are the big four accounting firms, all of which have large consulting units. There are also a number of more specialized consulting firms that interview students at Virginia Tech. Students interested in Consulting should join Virginia Tech’s Consulting Club, which can provide additional career information and exposure to potential employers.