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Accounting is an information science that is used to collect and organise financial data for organisations and individuals. It is considered as information science because it involves analysing, collecting and organising financial information.
Some might think that accounting is boring and unnecessary where it exists only due to regulations and legal requirements. However, little do people know just how rewarding it is to be in this line of work as it plays an extremely important role in running a business. Knowing accounting will not only help a person to understand the bookkeeping aspect of a business but also understand every aspect of maintaining a good and healthy business.
Accounting offers opportunity for professional progression to a reputable career without the need to study for several years to gain certification. You also avoid spending lots of money on tuition fees.
In this article, we will look at what it means to be an accountant, the different areas in which you can qualify and what jobs you could do as an accredited accountant with an accounting degree or accounting major.
But first, what do you need to become an accountant in terms of knowledge and skills?
Pathway to be an Accountant
Do you have an interest in accounting and envision yourself helping organisations analyse profit margins and make good business decisions? If so, then pursuing a career in accounting is the right step for you.
You need at least a diploma or AAT (Association of Accounting Technicians) qualifications as a minimum prerequisite qualification to be work in the accounting line in Malaysia.
However, if you would like to be a qualified accountant, you will need to have higher certifications. Let’s look at how you can qualify to be a chartered accountant in Malaysia. There are are number of options for you to consider.
Upon completing Sijil Pelajaran Malaysia (SPM) for those who have attended public school or O’levels for those who attended international school, you will need to take a pre-university course such as A-levels, STPM or a foundation course. You can proceed to a Degree in Accounting with this qualification. Alternatively, you can complete Diploma in Accounting. This will enable you to pursue a Degree in Accounting, going directly to Year 2.
In order to become a chartered accountant, you must have professional qualifications like ACCA, CIMA, CPA Australia or ICAEW. You must sit for exams for a number of subjects depending on which professional body you choose.
There is also an option to pursue professional qualifications directly after completing SPM or O’levels. One of the example is, if you choose to take ACCA, you can take the ACCA Foundation in Accountancy (ACCA FIA). However, since this is a direct pathway to get professional qualifications, you cannot use it to pursue a Degree in Accounting.
Accounting for Beginners
Accountants play an important role in business and can be considered as the backbone of a business. The main responsibilities of an accountant in general is to compile, analyse, verify and prepare financial records for the business organisation. An overview of an accountants task is that they work with financial documents in order to ensure lawful and ethical business practices.
Their role is spread across many areas in the financial sector such as taxation, financial reporting, forensic accounting, corporate finance, auditing, business recovery and insolvency, or accounting systems and processes.
The area of accounting you choose to pursue depends on your interest. Just keep in mind that all areas of accounting is governed by the generally accepted principles of accounting.
The tasks of an accountant may vary depending on the organisation , position and which area of accounting you are involved in. Some of the common tasks of a qualified accountant include:
- Preparation of financial reports
- Provide guidance on cost reduction, revenue enhancement, and profit maximisation
- Management of financial systems and budgets using spreadsheets and accounting programs like Xero
- Ensuring financial documents are in order and compliant to the regulations
Types of Accounting
Accounting can be divided into two categories which are financial and management. Let’s look at the features of these accounting types below:
Management Accountants
Management accountants focus on analysis, interpreting and communicating the results to the managers of a company. The reports prepared by management accountants help the managers make informed decisions and meet the targets and goals set by their company. The main user for management accounting report is within the company like managers or Chief Financial Officer (CFO). Since the intended user is internal, information can be tailored to meet the need of the specific recipient.
Financial Accountants
Financial accountants mainly deal with recording and reporting activities resulting from a company’s day to day operation. The main user of financial accounting are regulatory bodies and third parties. This is why financial accounting has to follow the local Generally Accepted Accounting Practice (GAAP) set by the relevant accounting bodies. An investor can make an informed decision on whether to invest in a company based on its financial statements.
Accounting in a Business
Business accounting is the systematic recording, analysing, interpreting and presenting of financial information.
Businesses need accounting to keep track of its operations. Accountant analyses the finances of the business and provide reports in order to help business owners make informed decisions .
Generally the life of an accountant can be hectic especially during February through April every year, which is generally considered the peak of the accounting and audit season. This can vary depending on the type of accounting work.
This is due to the fact that most companies prefer to have a December year end. This simply means the business recognises the 1st of January as the first day of the accounting year and the 31st December as the last business year. Furthermore, the general rule in Malaysia is for companies to submit the audited reports to Suruhanjaya Syarikat Malaysia (SSM) by the sixth month after their closing.
However, the hours will be more stable after peak season is over.
There are many different types of accountants who specialise in different fields depending on their interest and business needs. Accountants does not just crunch numbers but they play an important role in many areas of a business.
For example, tax accountant ensures that the business is in compliance with the correct tax regulations when filing annual accounts and is submitted before the deadline.
Meanwhile, a forensic accountant investigates inconsistencies, missing information, frauds and even embezzlements in the financial records.
Bookkeepers on the other hand, keeps records of all financial transactions, monitoring accounts received and paying all bills incurred by the business.
Golden Rules Of Accounting
Financial accounting is more than just simple bookkeeping. It uses the double entry system of accounting which consists of two aspects which are debit and credit. For each debit, there will be a corresponding credit and vice versa. Knowledge on which accounts to credit and debit is vital.
In order to present an accurate account of transactions and bring about uniformity, there are three Golden Rules of Accounting:
- Personal account: Debit the receiver, credit the giver.
- Real Account: Debit what comes in and credit what goes out.
- Nominal Account: Debit all expenses and credit all incomes and gains.
These rules define the treatment of all transactions conducted by the business. If one doesn’t follow the golden rules of accounting, passing journal entries and accounting for transactions is impossible.
Accounting Institutes
As we know, there are many different pathways to become an accountant. However, in order to become a qualified accountant which will lead to more opportunities, is by becoming a member of one of the recognised accounting institutes.
Below are just two examples of the accounting institutes that can offer you accreditation in your chosen area of study and work.
CIMA
Chartered Institute of Management Accountants (CIMA) is the world’s largest professional body of management accountants. It offers its candidates a mix of accounting and management expertise.
Graduates in any degree discipline can study CIMA. However, if you have completed a relevant degree, you are eligible for exemptions.
CIMA is a good choice of an accounting institute as it focuses on both academics and practicality. This is well-suited to the current needs of the accounting industry. Furthermore, it is a globally recognised accounting body. Therefore, having this qualifications will help you in securing a position in any reputable organisation of your choice.
ACCA
The Association of Chartered Certified Accountants (ACCA) is the global body for professional accountants. The primary focus of ACCA is technical accounting knowledge. Example of subjects covered in ACCA like financial accounting and management, taxation or auditing reflects this focus.
Many in the accounting industry choose ACCA because it is globally recognised. The ACCA qualification is based on international accounting and auditing standards which makes its members highly sought after as they have the necessary knowledge and skills to work in any country.
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