What is the difference between public and private accounting?

The services provided by public accounting firms will vary by the size and the expertise of the firm. Here are some of the public accounting services: preparation, review, and auditing of the clients' financial statements. tax work including the preparation of income tax returns, and estate and tax planning.

 

Private accounting is concerned with the inner workings of businesses, governments and agencies. Private accountants work for specific companies and are an important part to the success of any organization. For this reason, many public accountants eventually work in the private sector.

Public accounting involves being an independent third party that examines the financial statements and supporting systems of client companies to see if their financial statements fairly represent the results, financial position, and cash flows of the clients.

Private accounting is entirely different, since it involves setting up systems and recording business transactions that are aggregated into financial statements. Based on these general conceptual views of the two areas, the following differences can be defined between public accounting and private accounting:

§  Training. A public accountant is trained in the analysis of accounting systems, collecting evidence, and testing to see if assertions are correct. A public accountant also has considerable knowledge of the accounting standards for the accounting framework that applies to the financial statements of clients. A private accountant is trained in the processing of accounting transactions, such as billings and accounts payable, and his or her knowledge may be limited to the areas of accounting for which they are responsible.

§  Experience. A public accountant may have experience in multiple industries, depending on the range of clients. A private accountant is more likely to have a limited span of knowledge that may be confined to a single industry.

§  Certifications. A public accountant may be certified as a CPA (certified public accountant). A private accountant does not require certification, though several certifications are available for private accounting.

§  Career path. The career path of a public accountant is to advance through the positions of auditor and audit manager to eventually become an audit partner. An audit partner is expected to manage audit relations and bring in new business. The career path of a private accountant can begin in one of several specialty areas and advance into an assistant controller position, with eventual promotion to controller and then to chief financial officer (CFO). The CFO position is responsible not only for all internal accounting functions, but also treasury, risk management, and investor relations.

§  Work environment. The work environment for the public accountant can be difficult, since it involves travel, long hours, and sometimes spotty working conditions with tight deadlines. The work environment for private accounting is much more stable, possibly with no travel, a fixed work location, and regular hours.

§  Resume impact. The name of a large international auditing firm on a person's resume is considered a major career enhancement. This may not be the case for private accounting, since most jobs are with smaller companies whose names are not well known outside of their industries or geographical niches.

§  Social skills. Both kinds of accounting demand social skills, but of different types. A public accountant must be able to interview clients regarding their systems, and politely discuss possible system failures (essentially criticizing the work of clients). A private accountant needs to work with other parts of the company to develop or revise accounting systems and supporting procedures. The first case can be more confrontational, while the latter case can be more collegial. An introvert working in public accounting can have a more difficult time, due to the more social and confrontational aspects of the work.

§  Job satisfaction. Bluntly stated, many people do not like to work in the public accounting field because they find that passing judgment on the work of other accountants is not fulfilling. Conversely, job satisfaction tends to be higher in private accounting, where accountants are creating business transactions and reporting on the results of a business.

In general, the examination role that is central to public accounting tends to make this area much less satisfying as a long-term career for an accountant, but is useful for obtain a broad base of experience in the early years of a career. Private accounting tends to be more satisfying, which can lead to longer-term employment.

• Private accountants serve as bookkeepers for their employers. They set up accounts, give financial advice, complete tax forms, ensure legal requirements are met and supervise other employees working on the company finances. Some private accountants work on a freelance basis for one company only. Private accountants that work for a corporation are referred to as corporate accountants.
• Public accountants often work for independent accounting firms. They provide companies with third-party oversight to ensure company finances are handled properly. Independent financial audits by public accountants provide investors with valuable information about a company's financial practices. Public accountants also provide tax and other financial consulting services to outside firms. Some public accountants work independently providing outside services to many companies on a freelance basis. Other public accountants work for government agencies delving into the legal side of finances.
• Public accountants usually pursue certification as CPAs. This designation shows a high level of knowledge about accounting, auditing practices, legal requirements and related ethics. All CPA licensed accountants pass an exam demonstrating their knowledge and regularly complete continuing education requirements.

 Public is for all uses. Private is for Internal Uses. Public accountants aspire to become certified which requires passing a strenuous exam and acquiring experience as a junior. Private accountants generally start out of college as assistant controllers and can some day become chief financial officer or CEO.

Some private accountants work on a freelance basis for one company only. Private accountants that work for a corporation are referred to as corporate accountants. Public accountants often work for independent accounting firms. ... Public accountants also provide tax and other financial consulting services to outside firms.

Public sector refers to government-owned organizations and government-provided services. Private sector refers to 1) organizations that are not government owned, and 2) the goods and services provided by organizations outside of the government. For example, companies owned by individuals are part of the private sector.

Public accounting is not double entry accounting system which is mainly followed by the government organizations. It does not follow full pledged accrual based accounting rather cash based accounting is emphasized in public accounting system. On the contrary private accounting is a full pledged double entry accounting system which follows an accounting cycle starting from journals to prepare financial statements. All profit oriented business organizations follow that system.

• Training. A public accountant is trained in the analysis of accounting systems, collecting evidence, and testing to see if assertions are correct. A public accountant also has considerable knowledge of the accounting standards for the accounting framework that applies to the financial statements of clients. A private accountant is trained in the processing of accounting transactions, such as billings and accounts payable, and his or her knowledge may be limited to the areas of accounting for which they are responsible.
• Experience. A public accountant may have experience in multiple industries, depending on the range of clients. A private accountant is more likely to have a limited span of knowledge that may be confined to a single industry.

The differences between the public accounting and private accounting stated or based on eights general conceptual views: 

Training: In public accounting is stated on analysis system accounting, evidence, collecting and testing if they are heading to the right track and also based on knowledge to measure the standards of accounting. In the private sector, based on limited knowledge in accounting, but mainly, include the billing these accounting transactions and accounts payable and belongings responsibilities.

Experience: In public accounting obviously needed some important knowledge to follow for processing in accountings because it will have experience in many industries possibly but in private it will need few standards to handle a single industry.

Certifications: Regarding public accounting needs CPA ( Certified Public Accountants ), and according to private accountant does not require any higher certifications. 

Career path: In public acccounting of career path is to progress through positions of auditor and audit manager level to audit partner level which looking to bring business and relations beyond it. Contrast, in private accounting it goes progressing with some speciality places or positions such assistant controller to chief financial officer (CFO) which responsible about important functions, for instance, risk management, treasury and investor relations.

Work environment: the environment public workplace is kind of hard to adopt with which it will take long to reach to it and might take long hours as well with different difficult conditions, but regarding the private acconting is opposite of public accounting such fixed hours and you don't need to travel and with comfortable conditions and also valuable with good results of employee preference.

Resume impact: It considers a large international auditing firm on person major career enhancement that will not be a matter of private, also since most small jobs aren't known well in all its aspects.

Social skill: both public and private ought to have skills to match to accountings and both of them has some points to focus on, such depending on interview clients based on their accounting system and discussion politely that what public is following. If we focus on revising and develop with studying these important parts of the company procedures that will be the private accounting and it's actually easier than the public because of the public little harder due to social confrontational aspects of the work.

Job satisfaction: many people prefers the private because of the straight procedures of transactions and reporting results of the business, on the other hand, people are more satisfied and comfortable recording to the statistics.

 

 

 

The public accounting practiced by an independent parties like auditing firms and the private accounting is practiced by the company's  employees

Agreed with Mr Karaman and Mr Anil . Thank You