What Does an Accountant Do? Skills, Duties, and Career Path

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An accountant is a professional who records, organizes and analyzes financial transactions so that a business, government body, nonprofit or individual can see where its money comes from, where it goes and what it owes. In practice, accountants keep the financial records, prepare financial statements and tax returns, check that reports are accurate, and use the numbers to advise on costs, risk and planning. Accounting is a distinct occupation. “Accountant” is a broad job title, while credentials such as the certified public accountant (CPA) license add legal authority for specific work like signing audit opinions.

What Does an Accountant Do?

The core job is turning raw transactions into reliable information. That breaks down into several recurring duties:

• Recording and reconciling. Making sure every sale, payment, payroll run and loan is captured in the right account, and matching the books against bank statements and other outside records.
• Financial reporting. Preparing or reviewing the balance sheet, income statement and cash flow statement, and making sure they follow the applicable standards.
• Tax work. Calculating tax liabilities, preparing returns and planning transactions so the taxpayer meets its obligations without overpaying.
• Auditing. Conducting routine internal checks or annual audits to confirm that records are complete and controls work.
• Analysis and advice. Reviewing operations for inefficiencies, estimating project costs, building budgets and forecasts, and flagging financial risks.

What a given accountant actually does day to day depends on the employer and the specialty. A staff accountant at a mid-sized company may spend much of the month closing the books. A tax accountant’s workload peaks around filing deadlines. A management accountant might build cost models that help decide whether a new product line is worth launching.

Where accountants work

Accountants are employed by public accounting firms (which serve outside clients), by companies of every size, by government agencies and by nonprofits. Others run their own private practices. Common specialties include:

• Public accounting: audits, tax and advisory work for clients.
• Corporate (management or cost) accounting: internal reporting, budgeting and cost analysis for one employer.
• Tax accounting: returns, compliance and tax planning.
• Internal auditing: testing an organization’s own controls and processes.
• Forensic accounting: investigating fraud, disputes and financial irregularities.
• Government accounting: managing and auditing public funds.

How the Work Is Done

Most accounting work rests on double-entry bookkeeping and the accounting equation:

Assets = Liabilities + Equity

Every transaction affects at least two accounts, recorded as a debit in one and a credit in another, so the equation always stays in balance. Accountants post transactions to a journal, organize them through a chart of accounts, adjust and close the books at the end of each period, and then produce financial statements from the balanced ledger.

They also apply a reporting method. Under accrual accounting, revenue is recorded when earned and expenses when incurred, regardless of when cash moves. Under cash accounting, entries are made only when cash changes hands. Public companies in the U.S. report on an accrual basis under GAAP, while some small businesses use the cash method for their own books.

Hypothetical example

A small design studio (hypothetical) completes a $5,000 project in March but the client pays in April. The studio also buys a $1,200 computer on credit in March.

Under accrual accounting, the accountant records in March:

1. Accounts receivable (asset) increases by $5,000; revenue increases by $5,000, which raises equity.
2. Equipment (asset) increases by $1,200; accounts payable (liability) increases by $1,200.

Total assets rise by $6,200, liabilities by $1,200 and equity by $5,000, so both sides of the equation move by $6,200. In April, when the client pays, cash rises by $5,000 and receivables fall by $5,000, with no new revenue. Under the cash method, the $5,000 of revenue would instead appear in April, so the same business would show different March profits depending on the method.

Standards, Ethics and Liability

Accountants must follow the reporting rules that apply where they work. GAAP, set in the U.S. by the Financial Accounting Standards Board (FASB), governs the financial statements of U.S. publicly traded companies. IFRS, issued by the International Accounting Standards Board, is designed to make financial statements consistent and comparable across the many countries that adopt it.

CPAs owe a duty of care to clients: they must act honestly and avoid negligence. Their work affects not just the client but employees, boards, lenders and investors who rely on the numbers. Under common law, accountants can be held liable if they:

1. Are negligent in performing their duties
2. Misrepresent themselves or their clients
3. Commit fraud
4. Breach a contract by failing to deliver the agreed services

They can also face liability under statutory law, including state and federal securities laws.

Accountant vs. CPA and Related Roles

• Accountant vs. CPA. An accountant typically holds a degree in accounting and may not need a license for roles such as reconciliation, budgeting, statement analysis and internal reporting. A CPA is licensed by a state board, must follow professional codes of conduct and complete continuing education, and can perform work reserved for licensees, such as issuing audit opinions on financial statements, including those filed with the SEC.
• Accountant vs. bookkeeper. A bookkeeper records day-to-day transactions. An accountant designs the accounting system, adjusts and closes the books, prepares statements and interprets the results.
• Accountant vs. auditor. An auditor is an accountant whose specific job is to examine records prepared by others and report on whether they are fairly presented.
• Accountant vs. financial planner. An accountant focuses on recording, reporting and tax. A financial planner advises individuals on goals such as saving, investing and retirement.
• Accountant vs. financial analyst. Accountants produce historical financial records; analysts use those records to value companies and project performance with measures like return on equity.

Beyond the CPA, common designations include the certified management accountant (CMA), focused on internal financial management, and the certified internal auditor (CIA). Outside the U.S., the chartered accountant (CA) is a widely used equivalent title. An accountant can hold more than one designation.

Education, Licensing and Pay

A bachelor’s degree, usually in accounting or finance, is the typical entry requirement, and certification often becomes necessary to advance. Becoming a CPA involves meeting your state’s education and experience requirements and passing the Uniform CPA Examination, a four-part exam written and graded by the American Institute of Certified Public Accountants (AICPA) with input from the National Association of State Boards of Accountancy (NASBA). The exam is uniform nationwide, but licensing rules are set by each state’s board of accountancy and differ by state.

According to NASBA, there were 653,408 CPAs in the U.S. as of August 2025. The U.S. Bureau of Labor Statistics reported a median annual wage of $81,680 for accountants and auditors in 2024. Pay varies with credentials, specialty, employer and location.

Limitations of the Role

An accountant’s output is only as reliable as the underlying records and the estimates involved. Many figures, such as depreciation, bad-debt allowances and inventory valuation under FIFO or LIFO, depend on judgment within the rules. An audit provides reasonable assurance that statements are fairly presented; it does not guarantee that no error or fraud exists. The right professional therefore depends on whether you need bookkeeping, tax help, internal analysis or an independent audit.

The Bottom Line

Business owners, individuals and anyone weighing an accounting career should know that the accountant title covers many roles, from bookkeeping support to licensed audit work. Match the professional to the task: a bookkeeper for daily records, a tax accountant for returns, and a CPA for an independent audit. Even an audit offers reasonable assurance only, since the results depend on the underlying records and judgment.