To those looking to take up accounting, whether that be to study or to take up a job, there is one very common question – is accounting hard?
We will cover this in more detail below, however this is the answer. Yes accounting is hard, and that is why the qualified accountants earn high salaries. However, the subject principles can be learnt and understood by anyone that has the right work ethic and mindset.
This post will look at how hard accounting is from a few different perspectives, from studying at college or university to moving directly into a job role.
Studying – is accounting a hard major (degree)?
Accounting is a popular major. This is true for a number of years, as it is a sure fire way to enter the finance industry. The financial services industry usually pays the highest salaries to workers and is projected to grow by 8% in the next 10 years.
Accounting, as a major or degree, is usually grouped as part of the business school courses. This means that the difficulty of accounting degrees is usually compared to other business courses such as Management, Marketing and Human Resources type courses.
We must clarify here that difficulty is subjective and therefore some people may find qualitative courses or subjects harder than the more quantitative courses, and some vice versa.
From my perspective, accounting is one of the hardest business school courses. The caveat here is whether or not Economics and Finance related courses are included in a business school. There are some very difficult majors in both the Economics and the Finance realm which I would argue are more difficult than straight up accounting.
From a technical perspective, there are certainly some more complex degrees than accounting. In my opinion, majors in science and maths are harder than accounting. However, that said, I know many math majors that don’t make very good accountants.
Is accounting hard math?
In general the math involved in accounting is not ‘that’ difficult. This means that from a pure math perspective, the concepts which are covered are not that difficult.
However, by definition, accounting is math and therefore being able to work with numbers is critical. To be a successful accountant you need to be strong with numbers and logic. This type of math is not considered to be the most complex, but being able to think quickly and logically about numbers is often what makes the best accountants stand out.
Accounting in the real world v text book
Many people graduate college with a bachelors or masters degree in accounting and think that it is going to be easy going for them to pick up a senior financial reporting role. This is almost always not the case.
Most graduates go on to become a chartered accountant (CPA) after obtaining their undergraduate degree. To become qualified requires the successful completion of a further qualification and therefore exams. There are a number of ways to become ‘qualified’ which I will discuss in a different post. These usually depend on which country you are in and the firm/industry you are working in.
The truth is that accounting in the real world is usually very different to that of college. College usually teaches students the fundamentals, such as double entry and how to prepare financial statements. Whilst this is a very important foundation, it is not how business operates.
Accounting in the real world requires the understanding of specific systems which will vary depending on the type of business. You will need to understand how these systems work together and how they produce financial statements.
Real world accounting also depends on if an accountant works in industry or in practice. Working in practice will mean an accountant works for an external accountancy firm and has a number of businesses as clients. Working in industry refers to when an accountant works solely for one company.
Is working in accounting hard?
A very common question I get asked is “Is working in accounting hard?”. This is usually very hard to answer. The main reason for this is that accounting covers such a spectrum of roles and responsibilities.
On the lower end of the spectrum, you have the accounts assistants such as accounts payable and accounts receivable clerks. These roles could be classed as ‘accounting’ however they are very simple in nature. Typically they are more administrative roles which don’t touch any of the more difficult concepts.
On the other hand, and at the higher end, you have the qualified (chartered) accountants that have senior positions. These include roles such as CFOs and Finance Directors. By definition the work performed at this level is considerably more challenging and complex. At this level, decisions will be made in terms of business operations and risk mitigation, this generally involves putting together cash flow forecasts and evaluating methods of financial risk management which can get very complex.
Most roles sit somewhere in the middle of the two extremes which have been discussed above. I like here is both very technical elements, such as hedging and risk management, and more simple elements, such as bookkeeping. All of these types of accounting are important to a business. It is typically the more technical areas which demand the biggest salaries.
