The area of accounting currently experiencing strong growth in the number of people employed in the field. In 2004, accountants and auditors held about 1.2 million jobs in the United States. These numbers are expected to grow at a faster than average rate through 2014, mostly because of the increasing number of businesses, but also due to changing financial laws and regulations, as well as increased scrutiny of company finances.
The average salary of an accountant can vary greatly through the many different fields of accounting. An average salary of an accountant depends much on not only which area of accounting the accountant is employed, but also the geographic region in which the accountant is employed. For example, accountants, and especially Certified Professional Accountants (CPAs), in large metro areas will earn more than CPAs in smaller cities nationwide.
According to the United States Department of Labor, the average salary of an accountant, or the median wage and salary earnings of an accountant or auditor, was $50,770 in May 2004. The middle half of the occupation earned between $39,890 and $66,900. The top 10 percent of accountants and auditors earned more than $88,610 annually, and the bottom 10 percent earned less than $32,320. The U.S. Department of Labor also collected median annual earnings from May 2004 in the industries that currently employ the largest number of accountants and auditors, and the average salary of an accountant in these areas is as follows:
Federal Executive Branch of the government and the United States Postal Service – $56,900
Accounting, tax preparation, bookkeeping, and payroll services – $53,870
Management of companies and enterprises – $52,260
Local government – $47,400
State government – $43,400
According to a salary survey reported by the National Association of Colleges and Employers (NACE), candidates for bachelor’s degrees, soon to be graduating in the field of accounting, received starting wage offers from a variety of sources averaging $43,269 per year in 2005, and master’s degree candidates in accounting were offered $46,251 as an initial average wage.
The varied salary levels of different positions in the accounting field greatly affects the average salary of an accountant. A 2005 salary survey by Robert Half International, a staffing services firm specializing in accounting and finance, accountants and auditors with up to one year of work experience earned $28,250 to $45,000 annually. The average salary of an accountant with one to three years of experience earned $33,000 to $52,000, and the average salary of an accountant at senior level accounting or auditing earned between $40,750 and $67,750. Accounting managers were reported to be earning $48,000 to $90,000, and directors of accounting and auditing earned $64,750 to $200,750.
When employed by the Federal government, the average salary of an accountant varies just as much. According to the U.S. Department of Labor, the average salary of an individual working as a junior accountant or auditor in 2005 was $24,677. Those who had a superior academic record might start at $30,567, while accountants with a master’s degree and/or two or more years of professional work experience as an accountant usually start at a salary of $37,390. Initial salary bases were slightly higher in selected areas where the prevailing local pay level was higher, such as in large metro areas. Accountants employed by the Federal government in a nonsupervisory, supervisory, or managerial position made an average of $74,907 per year in 2005, and auditors earned an average of $78,890 that same year.
Accountants and auditors that are self employed or earn their own firms may have an upper end or lower end salary, depending on the size of their firm, their geographic location, the number of clients serviced, and other factors. Earning potentials and the average salary of an accountant who is self employed can vary greatly because of these reasons. A more experienced accountant has the opportunity to have a larger firm and more clients, thus earning more money, than an accountant who is just starting out in the field. It is because of this that many accountants begin their careers working for other firms, and start their own firm once receiving experience, as well as compensation, in the field.
Other factors may play a key role in determining the average salary of an accountant. Not only does geographic location and the job position or work experience affect the average salary of an accountant, but other things may also affect salary, such as level of education obtained by the accountant, as well as Certified Public Accountant (CPA) certification. Generally, those with master’s degree and more experience will receive higher salary levels and obtain a higher level job responsibility position in the work place. Those that are CPAs also tend to receive higher salaries, and therefore, the average salary of an accountant is almost a gray area due to all of the factors involved.