a cover letter

I'd like to apply to the faculty a study paper titled "The Employment Outlook in Accounting Major for the Next Five Years." I affirm that this study paper is my initial thesis, that it has not been documented elsewhere, and that it is not currently being considered by any other faculty.
In the paper, I offer claims on the accounting profession's work forecast, outlining the big changes that will shape the accounting industry in the future. This is important since analyzing the workplace outlook is a critical part of career growth. The article should be of concern to accounting professionals. The report examines the trends in employment growth in the accounting major, which is essential in making predictions on future job opportunities. The findings and recommendations of the report are important to prospective accountants looking to further their career. Also, understanding the projected trends allows accountants to prepare adequately to meet the changing job demands in this competitive profession.

Please address any response that regards this report to me at (email address).

Thank you for considering this research report.

Sincerely,

(Student’s name)







Title: The Employment Outlook in Accounting Major For the Next Five Years

























Contents

I.Cover Letter1

II.Title: The Employment Outlook in Accounting Major For the Next Five Years2

III.Memorandum of Transmittal3

IV.Abstract5

V.Introduction6

VI.Literature Review6

Overview of Accounting Jobs6

Definition and Classification of Accounting11

The Growth of the Accounting Industry13

The Growth of Accounting Effects to the Society17

VII.Conclusion20

VIII.Recommendations20

IX.References23

X.Appendix24













Memorandum of Transmittal

(Date)

(Instructor’s Name)(Course) (Institutional Affiliation)

Subject: Submission of Report

Dear Sir/Madam,

I am content to submit the report on “The Employment Outlook in Accounting Major for the Next Five Years” that I was assigned to work on. I recognize that this report is an essential part of the course and a partial fulfillment of my program. Therefore, I have tried my best to work on the report sensibly and honestly to ensure that it is informative enough.

I would want to point out that the study I conducted greatly improved my knowledge on how to come up with an executive report. By working on this report, I was able to gain an excellent understanding that will be of immense use in my forthcoming tasks. I candidly hope that this report will meet the set expectations.

I have put in much work to ensure that this report is presentable, informative, and detailed as expected. Thank you for giving me this unique opportunity.

Yours Sincerely,

(Student Name)

Abstract

This report examines the employment opportunities within the accounting profession over the next five years. A literature review was conducted to examine the accounting profession in the past few years, in the present, and in the future. This involved an assessment of opportunities within the accounting profession, the growth of the industry, and the effects of the accounting profession on the society. The information presented in the report is related to research carried out between 2012 and 2017. The results of this analysis indicated that the demand for accounting services is expected to increase by approximately 15.2% in the next five years. This analysis also revealed that the changing nature of the accounting profession, economic activities, and technology would have a huge impact on the demand for accounting services in the next five years. This report recommends an increase in training on new digital technologies, acquisition of more skills, and understanding of changes within the profession, for instance, with regard to rules and regulations.

Key words: accounting, accountant, employment, accounting industry, technology.













Introduction

The objective of this report is to examine the job outlook for the accountancy profession for the next five years. Accountants provide a range of services related to financial reporting, auditing, planning, tax system, cost management, bankruptcy, and accounting information systems (ACCA, 2016). Accountants are also responsible for giving advice pertaining to compliance and business strategies. While many prospective accountants are more concerned with remuneration potential, fewer seem to examine the job outlook for the occupation. However, the availability of good jobs within the accounting major is just as important as the remuneration potential (ACCA, 2016). Therefore, there is a need to look at the anticipated job growth. The essential elements of this report will include an overview of accounting jobs, definition and classification of accounting, the growth of the accounting industry and its effects on the society, and recommendations on improving the job prospects. The method of data collection will involve a review of existing literature and theory. Concisely, this report will examine the job outlook for the accounting profession in the next five years by reviewing existing research and theories.

Literature Review

Overview of Accounting Jobs

The accounting profession is perhaps one of the most important occupational groups in the modern economy and society. Accountants have taken key roles in major organizations, both in private and public sectors, with their decisions having widespread economic and social impact (Mehta, 2016). The accounting profession has gained much success in the past mainly because of rapid economic development, which increased the demand for accountants. The strong demand for accounting professionals in the past led to good prospects for entry level and higher positions (ACCA, 2016). This saw a majority of newly qualified accountants in the US and other regions secure employment, showing the growing opportunities for expert accountants in the world as a whole. For instance, in 2012, there were approximately 1.28 million accountants employed in the US (Statista, 2017). Competition for accounting jobs has also recently increased as more accounting professionals continue to enter the job market. Many more businesses recognize that the accountancy profession provides more versatility as compared to other business related majors. Therefore, over the past few years, the demand for accounting degrees has been so high that the number of accounting students and graduates has reached unprecedented levels. However, competition has mainly been stronger for jobs in the prestigious accounting and business firms. At the same time, the increased adoption of technology in the past few years has seen many accounting roles automated. However, according to experts, there were still many opportunities within the accounting profession to drive growth. In short, there has been a steady number of job opportunities within the accounting profession in the last few years.

Recently, there has been a reduction in the number of employment opportunities within the accounting major. For instance, the past four years has seen a reduction in the number of job opportunities. As shown in the figure below, there were 1.28 million accountants employed in the US in 2012 excluding sole practitioners (Statista, 2017). This figure reduced in 2013 and then stabilized in 2014, 2015, and 2016 (Statista, 2017) as shown in the figure below. Despite the steady growth, it is still evident that the number of employed accountants in the US has declined since 2012. This means that the number of employment opportunities for accountants has reduced since 2012. However, despite this trend, experts have expressed confidence that there would be an increase in the demand for accounting services in the future. For instance, the US labor department revealed that as of March 2017, there were 98,000 additional accounting jobs (Accounting Principles, 2017). Other reports also indicate that demand for specific accounting functions will vary as companies will be placing much focus on certain areas such as auditing and consultancy compared to other roles, for instance, bookkeeping (ACCA, 2016).

The figure below shows the number of accountants employed in the US from the year 2012 to 2016 and the projected outlook in the next five years (Statista, 2017). The graph indicates that the number of employments opportunities within the accounting profession will increase in the next five years.







Figure 1: The Past, Present and Future Accounting Jobs Outlook (Statista, 2017).

The future is still bright for prospective accountants according to various latest forecasts (Corkern, Parks, & Morgan, 2013). According to one of the latest employment projections, the number of accountants is expected to increase to nearly 1.44 million in 2022 (Statista, 2017). However, the expected changes within the external environment might have an impact on the availability of opportunities. For instance, the changing smart and digital technology, as well as continued globalization, are some of the major factors that might have an impact on the accounting profession (ACCA, 2016). This means that in the next five years, accountants will be required to become expert users of relevant emerging technologies. At the same time, there is a likelihood that globalization will expand the roles of accountants (ACCA, 2016).

Increased regulations and tougher governance are also some of the external factors that might continue to drive change and opportunities within the profession in the next five years (ACCA, 2016). Every member of the accounting profession will either be directly or indirectly affected and to different degrees. However, the ability of individual accountants to respond to changes in regulations will greatly affect their marketability. For instance, expert accountants in various roles and countries have been constantly affected by the intergovernmental tax action to put a limit on base erosion and profit sharing. However, tax specialists are the ones who have been greatly affected. Those who have adequately responded have continued to remain competitive in the job market. What is important in this case is the ability of current and future accountants to adhere to increased regulations and tougher governance because it will have an impact on their job prospects.

As businesses experience changes so will the prospects of certified accountants in the near future. Accountants will require more experience, skills, and stance to satisfy the increasing demands for inclusive and forward-looking information and more regular ad hoc reporting, especially from the investors (ACCA, 2016). These demands will increase as the barriers between internal and external reporting, fiscal and non-fiscal performance and operational silos erode. Therefore, expert accountants will need to focus beyond the numbers, that is, partnering and collaborating with individuals in other departments in the organization as well as outside the company, making strategic decisions to enable a business to accomplish its short and long-term goals (ACCA 2016). In addition, there has been an increased need for accountants to meet their clients' needs and add value. This is expected to have an impact on job prospects in the accounting profession. For instance, future professional accountants will need an ideal and varying mixture of specialized competencies to improve the employment outlook in the next five years.

Definition and Classification of Accounting

Accounting is the methodical process of recording, organizing and reporting of financial transactions relating to a business and interpreting the information thereof (Mehta, 2016). It is also among the major business functions in any organization. In most cases, accounting functions in small organizations are handled by bookkeepers and a general accounting personnel. However, in large firms, accounting activities are often delegated to a big finance department that has many workers. This is to say that as much as basic accounting activities can be run by a bookkeeper, advanced functions are usually carried out by more qualified accountants. Accounting can be classified into various categories namely, cost accounting, financial accounting, and management accounting (Mehta, 2016). Other important branches of accounting are taxation and auditing. The reports created from the different branches of accounting, be it management accounting or cost accounting, are essential in aiding the management in making sound business decisions.

Financial accounting is the branch of accounting that keeps track of an organization’s fiscal transactions that have already been made (Mehta, 2016). The financial transactions are recorded, organized and summarized into reports, for instance, income statements. Financial accounting provides information on the revenue and monetary position of a business, with regard to the company’s financial transactions that have been made within a particular duration (Mehta, 2016). In this manner, someone can easily assess the value of the organization. Financial accounting could also be referred to as historical accounting since it focuses on transactions that have already been made. The financial reports generated are usually presented to parties outside the organization, for example, investors and shareholders. For this reason, financial accounting reports normally adhere to certain accounting standards and principles. For instance, it has to adhere to the accrual basis of accounting.

On the other hand, cost accounting entails the process of recording, organizing and reporting of all the costs that a business has incurred in a manner that can be used to enhance management and decision making in the company (Mehta, 2016). It entails assessing a company’s production cost by evaluating the costs associated with each process of production and the fixed costs (Mehta, 2016). The costs are measured and recorded individually after which they are compared to the business output. It focuses on both historical costs and future processes of decision-making. Cost accounting draws its information from financial accounting reports. Management accounting deals with categorizing, evaluating, interpreting and communicating financial information to managers for the purposes of accomplishing organizational goals (Mehta, 2016). The information that is disseminated to the management is normally about the cost as well as the income, profit or financial position of the organization. The information enables the managers to make informed decisions as well as to perform their managerial functions in an effective and efficient manner (Mehta, 2016). Management accounting draws its information from both cost and financial accounting.

Auditing is a branch of accounting that involves inspection and certification of a business for its accurateness and consistency in the presentation of financial statements (ACCA, 2016). This branch of accounting is divided into two, that is, external auditing and internal auditing. External auditing involves the inspection of a company's financial statements by an external and an independent party with an aim of stating an opinion concerning the fairness of reporting and compliance with Generally Accepted Accounting Principles (ACCA, 2016). Internal auditing, on the other hand, is more concerned with the evaluation of the adequacy of an organization's internal control structure. This is normally done by evaluating policies and guidelines, separation of duties and other forms of controls adopted by a company. Finally, taxation is a branch of accounting that deals with tax matters. For instance, the roles of a tax accountant involve preparation and filing of tax returns and dealing with any legal implications involving the tax. Tax accountants also help businesses to minimize tax through legal means (ACCA, 2016). They also help financial accountants when it comes to preparing financials for tax reporting.

The Growth of the Accounting Industry

The accounting industry has been significantly influenced by the increasing technological advancements. Due to the integration of technology into businesses to enhance service efficiency, some accounting functions have been automated, thereby affecting the demand for accountants. According to experts, there has been significant digital disruptions in the accounting industry in the last few years and even recently (ACCA, 2016). This trend is likely to continue. This means that the accounting industry will face an increased demand for highly qualified accountants with knowledge in information technology. The nature of fiscal policy is also expected to affect the growth of the industry in the future. For instance, the US Bureau of Labor Statistics projects that the demand for accounting jobs in the industry will increase significantly in the future because of the rising nature of corporate fiscal concerns (Bureau of Labor Statistics, 2017). Currently, many organizations are recruiting professional accountants with adequate experience in the field and appropriate certifications to manage the financial services within the organizations. In other words, the changes in the nature of the occupation as a whole will significantly have an impact on the industry, consequently affecting the outlook of the accounting profession (ACCA, 2016).

The demand for accounting services is also predicted to influence the growth of the industry in the next five years. For example, the recent and the past increase in demand for accounting services has been associated with the growing number of company audits and assurance services (ACCA, 2016). This trend is expected to drive future growth in the industry. It is expected that organizations will hire more personnel to handle the accounting and fiscal auditing functions in a bid to prevent oversights that could have an impact on a company’s image and reputation. Despite the available internal controls, the demand for accounting consulting firms will also be on the rise in the next five years. For instance, the increasing number of new businesses is expected to drive the demand for consultancy and advisory services (ACCA, 2016). In a sum, the demand for accounting services, such as auditing, assurance, advisory, and consultancy will have a huge impact on the industry consequently affecting the number of job opportunities.

The growth of the accounting industry is highly dependent on the state of the global economy (ACCA, 2016). For instance, an upsurge in economic activities means that more money is generated, consequently leading to an increase in the demand for financial services (ACCA, 2016). Similarly, as the demand for financial services increases so does the demand for more employees to prepare and examine financial statements grows. For instance, it has been projected that the employment growth within the accounting profession will increase to around 1,440,000 by 2022 (Statista, 2017).This is equivalent to approximately 15.2% growth as from 2016. The projection is illustrated in the figure below.



Figure 2: Employment Growth between 2012 and 2022 (Statista, 2017).

More than three-quarter of the operations in the accounting industry are attributed to compliance services in fields such as audit, tax, and accounting (Statista, 2017). Compliance services also contribute to much of the industry revenue. Actually, more than half of the industry revenue was attributed to consultancy services. For instance, in 2014, $94 billion in revenue generated in the industry was tied to US accounting services only (Statista, 2017). Increased globalization and favorable economic condition could further increase revenue within the industry. The industry revenue has never been evenly distributed among accounting firms. This is because the majority of the revenue generated from accounting activities has been from the four major players namely KPMG, Ernst & Young, Deloitte, and PricewaterhouseCoopers. For instance, in 2016, $128 billion of the income generated in the American accounting industry was attributed to these four major industry players (Statista, 2017). These four companies also employ the highest number of accounting professionals, and the trend is expected to increase in the future. For instance, as of March this year, the “Big Four” accounting firms had 212,606 employees (Statista, 2017).



Figure 3: Number of Accountants Employed in Leading Accounting Firms in the US as of March 2017 (Statista, 2017).

The Growth of Accounting Effects to the Society

Accounting is concerned with the process of gathering, analyzing and reporting financial information to relevant users (Mehta, 2016). The other way of developing a broader understanding of accounting and its central significance is by considering its growing effects to the society. Accounting profession plays significant roles in the society. For instance, the accounting reports are essential in informing business decisions with regard to the efficient distribution of limited resources. The accounting profession has also largely contributed to the planning process of certain social institution initiatives (ACCA, 2016). However, the profession is mainly known for its major effect on employment growth. The accounting profession has been a source of employment since the Ancient times. Currently, a large number of people are employed as auditors, financial planners, tax specialists, cost managers, bankruptcy experts, and accounting information system professionals (Corkern et al., 2013). The increase in a number of people employed as accountants has had a huge impact on the society. For instance, in the US alone, there were approximately 1.25 million people employed as accountants in 2016 (Statista, 2017). According to United States Department of Labor, average annual income of accountants was approximate $76,730 (Bureau of Labor Statistics, 2017). This shows that the accounting profession has had a major impact when it comes to alleviating poverty in the society and improving the living standards.

Among the trends within the accounting major is the growing average annual income of Accountants (Corkern et al., 2013). For instance, there has been a steady growth in the mean annual wage of accountants for the past few years in the US. For example, the table below indicates that mean annual income increased by approximately $ 6,442 in 2016 ($76,730-$70,258). The growth on the level of income reflects the level of accounting effect to the society. This means that there has been a growing increase in household and disposable income that goes towards the development of the society.





Table 2: Average annual income for accountants in the past five years (Bureau of Labor Statistics, 2017)

Year

Average Income

2016

$76,730

2015

$70,258

2014

$69,690

2013

$68,699

2012

$62,500



Figure 4: Annual Average Wage for Accountants in the US (Bureau of Labor Statistics, 2017)

The figure above illustrates the potential growth of accounting effects to the society. Similarly, it could be argued that the accounting profession has increased the level of sustainability within the society.

Conclusion

The report has presented a discussion on the job outlook in the accounting profession in the next five years. Based on the report, the accounting profession is perhaps one of the most important occupational groups in the modern economy and society. This is because accountants have taken key roles in major organizations, both in private and public sectors, with their decisions having widespread economic and social impact. The report has recognized that the strong demand for accounting professionals has led to good job prospects. However, as much as the profession presents a bright future for current and prospective accountants, certain factors within the external environment might affect future demand for accounting services. According to the report, it was projected that the demand for accounting services will grow by nearly 15.2% from 2016 up to 2022. There are currently more than 1.25 million accountants employed in the US alone, and this is expected to increase in the next five years. The report has also revealed that the top five largest accounting firms employ a considerable number of accountants. Finally, according to the report, there has been a significant effect of accounting to the society as depicted by an increase in average annual income of accountants.

Recommendations

There is no doubt that employment opportunities within the accounting profession will continue to increase in the next coming years. However, with the continued changes in the nature of the profession, prospective and current accountants will have to find ways of improving their marketability. For instance, with technology playing a larger part in the accounting landscape, future accountants will have to increase their knowledge with regard to digital expertise such as the use of big data and cloud computing (ACCA, 2016). Furthermore, due to the projected digital disruption in the next few years, it is essential that accountants make strategic career choices that will maximize their job forecasts. For instance, accounting graduates and students need to be familiar with the latest accounting software packages and programs. They can gain familiarity, for example, through online classes and tutorials. In addition, the accountant graduates and student should go through news feeds that are relevant to the field of accounting to stay updated on any new developments in the industry, particularly as it pertains the adoption of new technology (ACCA, 2016). In other words, current and future accountants should work towards adopting latest technological expertise through training if they are to be marketable in the future.

Future and current accountants will also have to be acquainted with the globalization and evolving regulations more so when it comes to tax guidelines and new forms of financial reporting. Recent reports from the Association of Chartered Certified Accountants revealed that understanding of digital technologies is a vital competency area where there are still skill gaps (ACCA, 2016). Currently, most accountants lack knowledge in new forms of guidelines, disclosures, and the interconnection of financial and non-financial reporting. Accountants will need to acquire more skills that would enable them to provide comprehensive accounting reports that not only cover numbers, but also an organization's narrative (ACCA, 2016). In a sum, being acquainted with the changing accounting regulations and reducing the skill gaps will be crucial in enhancing marketability for current and future accountants.

From the above analysis, it is expected that in next five years, the roles and responsibilities of accounting professionals will expand due to globalization. To increase marketability in the next five years, current and future accounting professionals will have to develop perspectives that are more global through strong collaboration with other disciplines and acquisition of additional skills (ACCA, 2016). As a way of anticipating the future, accounting professionals will have to take part in relationship building, advocacy and negotiation skills. For example, tax professionals can become part of a company's risk management structure. They can also collaborate in the design and running of control processes if they are to broaden their understanding on auditing. Current and future accountants should also not just focus on providing information, but should also partner with other business leaders (ACCA, 2016). To prepare for the future, accountants should not just focus on their current roles, but they should also broaden their understanding of the operating environment (Corkern et al., 2013). In other words, accountant's leadership roles should extend beyond the finance function. They should also become more practical than reactive and be able to establish and manage relations with a broader range of stakeholders. This can be mainly achieved through skills acquisition and active collaboration.







References

ACCA. (2016). Professional accountants – the future: Drivers of change and future skills. Retrieved from http://www.accaglobal.com/content/dam/members-beta/images/campaigns/pa-tf/pi-professional-accountants-the-future.pdf

Accounting Principles. (2017). Accounting and Finance Jobs Report for March 2017. Retrieved from https://www.accountingprincipals.com/job-resources/jobs-report-march-2017/

Bureau of Labor Statistics. (2017, March). Occupational employment statistics. Retrieved from https://www.bls.gov/oes/current/oes132011.htm

Corkern, S. M., Parks, S. B., & Morgan, M. I. (2013). Embracing the future: What can accounting graduates expect? American Journal of Business Education (AJBE), 6(5), 531. doi:10.19030/ajbe.v6i5.8043

Mehta, B. K. (2016). Cost and management accounting. Agra, India: SBPD Publications.

Statista. (2017). Accounting industry in the U.S. - statistics & facts. Retrieved from https://www.statista.com/topics/2121/accounting-industry-in-the-us/













Appendix

The table below indicates other projected trends in the accountancy profession over the next period, based on a survey by ACCA (2016)

Table 2: External factors that are expected to drive the accounting industry in the next 5 years (ACCA, 2016)

External Factor

% of Respondents

Adoption of data mining and other analytical methodologies

75%

Implementation of cloud computing

79%

Increasing demand for business value

74%

Provision of outsourced accounting services

72%

Pressure to secure local jobs from international workers.

72%

Greater synchronization of international accounting and business principles

81%