The Differences Between Public and Private Accounting

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The differences between public and private accounting
In order to understand the difference between public and private accounting, we must first understand what accounting is. Accounting is simply an information system used to identify and communicate financial information to users of that information. Accurate, reliable and pertinent information is extremely important in evaluating a company’s financial position in order to attract investments. The accountant’s role is to ensure, that the information presented is in fact a truthful representation of the company. Falsifying information, whether intentional or not can have serious, even legal implications for the accountant. That’s why accountants are very concerned with ethics. Public accountants are those accountants who provide services such as auditing, tax and financial planning to corporations. These accountants do not work for the organizations they provide these services for; rather these organizations are considered clients of the public accountants. They work outside of the corporation, if you will. Private accountants on the other hand, work for an organization or within a company’s accounting department. There are pros and cons to both facets of accounting; we will consider a few to construe the major differences between the two. To begin with, let’s look at the functional differences between the public and private accounting. Even though private accountants may produce internal audits, it is required, by law, that public accountants audit a company’s financial records and issue an unqualified opinion in order for those records to be accepted as true representation of that company’s financial position. Following the Enron scandal, accounting principles have become more stringent. As such, public accountants must be aware of the dynamic changing environment in which they operate. Public accountants are credited with this extra responsibility...
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