Accounting is the measurement and documentation of an entity’s cash inflows and outflows. This means that the practical, day-to-day reality of accounting involves poring over large sets of raw data related to financial transactions and making sense of them for laypeople with little or no accounting background. If you have any sort of aversion to numbers or if you dislike the idea of putting in the amount of work required to translate unwieldy, complex sets of data into usable formats, accounting probably is not for you.
What Is Cost Accounting? How Does It Differ from Financial Accounting?
Along with financial accounting, it is one of the two major accounting sub-fields. Financial accounting is focused on arranging, summarizing, and providing accounting information to external entities. Cost accounting, on the other hand, monitors financial transactions and data within a single organization. Cost accountants are called upon to advise the organization’s managers of their findings and develop plans to ensure the organization reaches its objectives, financial or otherwise. The terms “cost accounting” and “managerial accounting” are often used interchangeably.
How Much Schooling Do You Need to Become a Cost Accountant?
If you want to become a cost accountant, you will need to obtain a bachelor’s degree in accounting from an accredited college or university. You may also consider pursuing a master of science in accounting after you complete your undergraduate studies to increase the breadth and depth of your accounting expertise, help you prepare for the Certified Management Accountant (CMA) exam—more on that later—or develop a personal specialty within the field.
What Do Prospective Cost Accountants Study As Undergraduates?
For starters, they major in accounting. Completing an undergraduate degree in accounting typically requires completion of courses in financial accounting, managerial accounting, individual federal income taxation, corporate income taxation, auditing theory and practice, accounting periods and methods, state and local taxation, accounting information systems and accounting ethics, among others.
Are There Any Specific Professional Designations for Cost Accountants?
Yes. As briefly noted above, cost accountants can sit for the CMA exam. The CMA exam consists of two parts. Part one covers financial reporting, planning, performance and control. Part two is dedicated exclusively to financial decision making. To be eligible for the CMA exam, you must have completed a bachelor’s degree and have at least two years of work experience.
Where Can You Work As a Cost Accountant?
Almost anywhere. Yes, you read that last sentence correctly. Cost accountants are in high demand in virtually all sectors. They work for large private firms, agencies at all levels of government, nonprofit organizations, small start-up companies and nearly any other type of organization you or anyone else can imagine. As a cost accountant, the professional world will be your oyster and you will enjoy a tremendous amount of job security.