Accounting vs. Actuary: An Overview
Problem-solvers who have a knack for arithmetic and statistics are constantly in demand. People with the skill could think about working as actuaries or accountants. The emphasis of the job and the industries they service are extremely diverse, but the skills and training required are similar:
- Accountants develop, manage, and regularly check the accuracy of the financial records kept by companies and other organizations. Governmental organizations, banks, and other corporations hire additional accountants to verify the correctness of such documents.
- Actuaries calculate risk, typically for the banking and insurance sectors. In order to determine how much future financial risk a policy implies and, thus, how much the premium should be, they gather and evaluate facts.
Accountant
There is a place for accountants in every sector. They could be employed by a company, a person, or the government. They track all of the money that is spent, received, and owing in taxes.
The designation of certified public accountant is attained by several accounting professionals (CPA). Few occupations rely on a single title as heavily as accountants do on the CPA qualification.
Requirements for Accountants
To become a CPA, candidates must prepare for and pass a four-part test.
Internal audits, forensic accounting, management accounting, environment accounting, or taxes are just a few of the various specialties available to CPAs.
Nevertheless, regardless of speciality, the test remains the same.
A CPA must undergo extensive training. The suggested amount of study time for each of the exam’s four portions is between 80 and 100 hours, and all four sections must be finished within an 18-month timeframe. As additional requirements for sitting for the CPA tests, the majority of states demand that applicants have completed at least 150 semester hours of coursework and have a college degree.
Compensation for Accountants
A first-year tax accountant could make $50,000 or less whereas the treasurer of a huge firm can make more than $250,000.
The U.S. Bureau of Labor Statistics estimates that in 2021, the median annual salary for accountants was $77,250. (BLS).
In the United States, there are often much more accountants than actuaries. The BLS predicts that between 2020 and 2030, the number of actuarial employment will increase by 24 percent, while the number of accounting jobs is anticipated to increase by 7 percent. In contrast, the overall average growth rate for all vocations is 8%.
Actuary
Actuaries work with a lot of data, maybe more than any other profession. These people are real statisticians who forecast probable future events based on historical data.
They are essential to the operations of lending institutions and insurance firms since they possess these talents. Both companies base the fees for their services on an actuary’s evaluation of the transaction’s risks.
Actuaries may really work for any business or government organization that needs to assess risk. The decision-making process for important new projects includes such an examination.
Requirements for Actuaries
Candidates must possess a solid foundation in calculus, statistics, actuarial science, computer science, and mathematics in order to work in the insurance industry.
An prospective actuary must finish courses in corporate finance, applied statistics, and economics in order to be certified.
Actuaries are recognized as professionals by two organizations. People who are competent to operate in life insurance, health insurance, investments, and finance are certified by the Society of Actuaries (SOA). Six courses covering everything from individual life and annuities to corporate finance are available for SOA certification.
The Casualty Actuarial Society (CAS), the second organization, focuses on certifying actuaries for property and casualty risk for corporations and governments.
It may take an actuary many years to get SOA or CAS certification.
Actuaries’ salaries
According to the BLS, the median actuarial salary in the United States in 2021 was roughly $105,900.
Few individuals possess the patience or aptitude to spend five years or more completing all the examinations, which is in part why actuaries are paid so handsomely.
Actuaries often toil hard for the first five years of their employment, earning far less than the average wage, in order to get all of their qualifications.
Particular Considerations
Anyone contemplating a job as either an accountant or an actuary would benefit greatly from having a bachelor’s degree in either accounting or mathematics.
The majority of accountants and actuaries begin their careers as entry-level workers at accounting firms or insurance businesses, where they are employed while studying for the several examinations that will advance their careers.
Life-Quality Elements
A relatively healthy work-life balance is possible in both occupations, particularly when contrasted to many of their counterparts in the financial sector. Most polls and studies, including those from Glassdoor, routinely give accountants and actuaries good marks for work-life balance, job security, hours worked, and stress at work.
An exceptional (temporary) exemption is made for tax accountants. During tax season, which runs from January through April, many tax accountants put in six or more days per week and upwards of ten hours per day.
Both accountants and actuaries are in high demand.
158 For people, companies, and governments ready to adapt, these professions grow more and more crucial as the global economy exhibits rising complexity and regulatory demands.
