Public Accounting vs Private Accounting

What’s the difference: public accounting vs private (non-public) accounting?

You can think of public accountants as “external” accountants who provides services to clients such as audit, consulting and tax planning services.

Private, or non-public accountants are “internal” accountants who work in a company, non-profit organization or a government agency. You can work in the financial accounting, management (cost) accounting, budgeting, corporate planning, treasury or in the internal audit department within the corporation.

Your Next Question — How do I choose between public accounting vs private accounting?

It largely depends on your interest and your skill set.

For public accounting, you’ll need:

• Good People Skills. Public accounting is a client oriented business which means that you need good people skill. For example, you’ll need to communicate effectively with your clients when trying to understand the client’s business and to request information for your analysis. As you move towards partnership, you’ll acquire important skill in how to deal with difficult clients and getting the information you need at the same time.
• Good Sales Skills. This is people skill in the next level, and is required if you aspire to become a partner or own your CPA firm. In short, you need to solicit business for your firm and good sales and marketing skill (and keeping your professionalism at the same time) is a critical skill.

For public accounting, you’ll experience:

• More Stressful Environment. Because you are dealing with a wide variety of people and demands, public accountant’s work is inevitably more stressful. On the other hand, private accountants work with the same group of colleagues and tend to have a more relaxed lifestyle.
• Longer Hours. Similarly, because you are working with clients vs colleagues, the deadlines are hard deadlines and over-time / late nights are common especially for junior accountants (associates and senior associates).  Other than the account-closing month, private accountants have more or less a 9-5 job.
• Less Stability. While accounting job is considered one of the safest jobs, the boom and bust of economic cycle does affect CPA firms as clients cut budget and corporate finance activities. Within public accounting, audit and tax teams are more secure than advisory teams for this reason.
• Better Exposure. Having said that, working in a public accounting firm expose you to a wide variety of projects in different industries and this is an unrivalled experience when compared to an accounting role in the corporate world.
• More Doors Opened. Because of this, an experience in CPA firm (especially Big 4) is excellent for your resume, and you can always go from public accounting to private accounting but not vice versa.

In any case, both public and private accounting offer rewarding careers for students interested in the accounting field, and there are a lot of interesting CPA career paths as you gain more experience in your niche. Good luck to all of you!

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* Photograph courtesy of Irargerich

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