BACKGROUND
1. History
2. GAAP vs. OCBOA
4. International
5. Future

BACKGROUND

What’s the difference between a bookkeeper and an accountant? Oh, about $10 an hour.

That’s an old joke Jack first heard when he took his first accounting class way back in 1974. It’s point is that there is a blur. Here’s a list of the different jobs in this line of work and what they mean.

Bookkeeper
Theoretically these people are at the bottom of the accounting food chain. Theoretically. In reality, good bookkeepers are the most valuable of the accounting team. The basis of all the financial reporting system rests upon their data input.

In theory bookkeepers record transactions from main sources like invoices and checks. Accountants make accruals and adjustments. Full Charge bookkeepers, however, can do the whole accounting process complete through final financial statements. Many of these people command considerable salaries.

Accountant
These people can take the basic data and adjust it to final status. In large companies accountants may specialize in one area such as payroll or accounts payable.

Controller (also Comptroller)
This is the head of an accounting department. It’s a fancy word for “chief accountant”.

Chief Financial Officer (CFO)
The CFO is head of sever finance related departments. Accounting is only one. Others might be “financial management”, “collections”, and “fixed assets”.

If a company has an internal auditing staff, this department should report to the CFO. This is so that the CFO can receive independent opinions about accounting operations.

Enrolled agent (EA)
These are usually but not necessarily accountants. EA’s may represent taxpayers before the IRS. They must pass an exam administered by the IRS. Accountants who offer their services to the public usually try for the EA status.

Certified Public Accountant (CPA)
CPA’s can attest to the validity of financial information. This means that they can audit financial statements and report on whether they are accurate or not. This authority is licensed by law.

CPA’s receive a license to practice from a state board of accountancy. They must pass exams to achieve this. Current requirements include two years of experience and five years of college.

The IRS grants CPA’s and attorneys automatic authority to practice before it.

Other designations
Accounting titles have sprung up like weeds in the last few decades. Some of the main ones are:

CMA stands for “Certified Management Accountant”. This is great for cost accountants.

CIA stands for “Certified Internal Auditor”. In addition for the internal auditors, government auditors of contractors have found this designation to be useful.