Public Accounting vs Private Accounting: What’s the Difference?
Think of public accountants as “external” accountants who provides services to clients such as audit, consulting and tax planning services.
Then, think of private (non-public) accountants as “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.
How do I Choose between Public Accounting vs Private Accounting?
It largely depends on your career aspiration, strengths and personality.
For public accounting, you need…
Good People Skills. Public accounting is a client oriented business. This means that you need good interpersonal skill. For example, you’ll need to communicate effectively with your clients. It is also helpful to understand the client’s business and to request information for your analysis.
It may sound easy, but not all clients are willing to release all information. You need to be tactful and consistent to get the data and complete the audit work.
As you move towards partnership, you’ll acquire important skill in how to deal with difficult clients and maintain ethical standards and integrity at the same time.
Good Sales Skills. You need to solicit business for your firm, and this is people skill at the next level. Good sales and marketing skill (while keeping your professionalism) is critical if you aspire to become a partner or launch your own CPA firm
What’s Not-So-Good in Public Accounting
More Stressful Environment. Because you are dealing with a wide variety of people and demands, public accountant’s work is 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. Because you work with clients instead of colleagues, the deadlines are often hard deadlines. Over-time and late nights are common especially for junior accountants. Other than the account-closing month, corporate accountants have more or less a 9-5 job.
Less Stability. While accounting job is considered one of the most secure 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.
What’s Great in Public Accounting
Better Exposure. Working in a public accounting firm expose you to a wide variety of projects, possibly in different industries. This is an unrivaled experience when compared to an accounting role in one company.
More Doors Opened. An experience in CPA firm (especially Big 4) is valuable for your resume. It is always easier to go from public accounting to private accounting than vice versa.
Both public and non-public accounting can offer rewarding careers for students interested in the accounting field. There are lots of interesting CPA career paths as you gain more experience in your niche.
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* Photograph courtesy of Irargerich