- Hi, I'm Roger Philipp,
CPA, CGMA, Founder and Chief Creative Officer
here at Uworld Roger CPA Review.
Now, today I wanna address
one of the most common questions we get from potential
and current CPA exam candidates, which is,
hey, what can I do as a certified public accountant?
Well, today, I wanna give a brief overview of what a career
in governmental accounting looks like,
including the positions that you could obtain,
the compensation, and what the benefits are
of choosing this career path.
Now, like their counterparts in public accounting
and in industry, CPAs in government
have responsibilities in the areas of auditing,
financial reporting, and management accounting.
In addition, CPAs in government
have the opportunity to evaluate
the efficiency of government departments
and agencies at the federal, state, and local levels,
as well as advise decision-makers
in the use of entity resources.
Now at the federal level,
some examples of where CPAs work include,
the Federal Bureau of Investigation or the FBI,
the Internal Revenue Service,
our favorite area the IRS,
the Department of the Treasury,
and the General Accounting Office, or the GAO.
Now some of the responsibilities at the federal level
may include things like,
investigating white collar crime, right?
That's what the FBI does.
Managing financial statement audits
for governmental agencies,
performing research and analysis
on financial management issues,
testifying before a legislative committee on an audit
or on the impact of pending tax legislation.
And at the federal level,
the average national salary starts at about
$82,000 per year.
Now at the state and local level,
CPAs are involved in conducting financial performance
or compliance audits,
which may include things like
analyzing a school district's ability to remain viable,
the propriety of expenditures for constructing a prison.
So they're building a,
government's building a prison.
They want to keep track of the expenditures,
the costs that are flowing out,
the effectiveness of the workers' comp system,
the regulatory compliance of hazardous waste programs,
and at the state and local level,
the average national starting salary there
is about $80,000 for that position.
Now, there are many different types of audits
that a CPA may perform in all levels of government.
First of all, we have a performance audit,
which is an independent evaluation
of an organization's operations.
That way we can come up with ways to make it work better,
faster, and cheaper.
So we can save some money.
A performance audit may also determine whether management
is fulfilling its promise to the taxpayers
by effectively providing services
intended to meet its goals and objectives.
Another type would be a financial audit.
And these are audits that include financial statement
and related financial audits or reviews.
Now the main focus
of a traditional financial statement audit
is to examine and verify the information provided
through a company's financial statements.
This usually results in an opinion
on the fairness of the information presented
in the financial statements,
or to determine whether the entity has adhered to
specific federal and financial compliance requirements.
Now, these audits involve
a review of the internal controls over financial reporting,
which we learn as ICFR,
internal control over financial reporting,
and usually results in a letter to management
identifying any material weaknesses that they may have found
during their review and recommending any corrective action.
So in other words,
hey, how can we go about fixing our internal controls?
Now a compliance audit determines whether the company
is following provisions of laws, regulations,
contractual grants, or maybe even a loan agreement.
So are they or are they not
in compliance with the agreements?
The purpose of a compliance audit
is to identify instances of significant deviation
from specific requirements
and to seek corrective action, right?
So how can we get back on course?
Now in a state compliance audit,
we review compliance with specific state laws
and regulations, whereas in a federal compliance audit,
we review compliance with the legal
and regulatory requirements mandated as a condition
of receiving some sort of federal financial assistance
or a grant or some kind of other aid
from the federal government.
Now in an investigative audit,
those are performed as a result of a reported allegation
related to improper activities
by government employees or agencies.
So in other words,
they'd been accused of doing something shady,
so we're gonna have to investigate
and do an investigative audit.
Now the allegations are received mainly
through a toll free hotline
for reporting fraud and abuse in government.
So in other words,
you get a whistleblower calling
and that will sometimes start the investigative audit.
Now an investigative audit may also result
when auditors become aware of inappropriate
or suspicious activity that may fall under
the Reporting of Improper Governmental Activities Act.
So there's an act that tells us if we find these things,
we may wanna start an investigation.
Now there are a variety of forensic
accounting roles as well.
And this is a really interesting area.
For example, one of my past students, a friend of mine,
she works at the FBI
and she does a lot of forensic type audits.
She had to fly I think to Europe
and do some investigative audits
on a lot of banks and so forth.
So governmental agencies like the FBI,
the IRS and the CIA,
they need trained forensic accountants.
So hopefully one day maybe that's going to be you.
Now, many departments have an investigative department
usually called the office of the inspector general
or the OIG, Office Inspector General,
and each of the OIG units needs forensic accountants
to prevent fraud and sniff out budget errors.
Now the ability to use auditing
and investigative skills together
is a very valuable tool to governmental agencies
and public employees and forensic accounting
usually receive a higher pay than their counterparts.
But even better,
these roles give employees a high sense of satisfaction.
And this comes from the fulfillment
of performing civic duties and helping us
to have a better society.
Now, what are some of the benefits of working in government?
First of all, a great one is student loan forgiveness.
And this is a huge benefit,
since most federal employees are eligible
for Federal Student Loan Forgiveness programs.
So maybe the government's gonna pay for your education.
That would be lovely, right?
You don't have to bother mom and dad anymore.
Now these programs are designed to further reward people
who chose to work in public sector
by easing their student loan burden.
And this can result
in tens of thousands of dollars in savings.
Another benefit is excellent work/life balance.
And by work/life balance, what that says,
is governmental accountants are almost guaranteed
a 40-hour workweek with paid time off,
a plethora of holidays and great benefits package.
And I always say, you know,
a way to think about it is that the post office is closed
you get a day off.
When I worked in public,
I didn't get a day off, but working in government,
you'll probably get the day off.
Now, many offices even offer work from home options,
but usually you don't get that
till you've been with the government for quite a while.
Other benefits, government supervisors
also encourage employees to use their annual leave balances
in order to make sure employees stay
healthy, productive, and balanced, right?
When I worked at the Big Four, for example,
they generally frowned upon you taking, you know,
time off even though you had this accrued paid time off.
I remember in public, it was difficult to get that time off,
but in government, they mandate
you need to take that time off,
which is really nice to get that work/life balance.
Public transportation subsidy,
government employees at both state and federal jobs
are often eligible for a public transportation subsidy.
And the federal subsidy for public transport
is about 90 bucks a month, right?
Not too shabby, it kind of adds up.
So in conclusion, again,
this is just one of many satisfying
career paths you can take as a certified public accountant.
Remember, while there are many different opportunities
licensure can offer,
here's what they all have in common.
Higher salary, upward mobility, job stability,
and you're always in high demand
because of the expertise that you've obtained.
Thanks for watching,
and I hope you start or continue to pursue
a career path as a CPA.