Financial Accounting Career Information

Professionals in the financial accounting field usually follow the Generally Accepted Accounting Principles (GAAP) set by the Financial Accounting Standards Board (FASB). Reports such as balance sheets and income statements should adhere to these standards, so that there is consistency in reporting throughout an individual company's history as well as throughout the corporate world.

Without such consistency, accounting policies would vary from company to company, making it very difficult to make meaningful comparisons and ensure honesty and accountability. The 2001 Enron scandal and the company's subsequent downfall were attributed to, among other things, financial accounting statements that were manipulated behind the scenes. It goes without saying that Enron's financial executives didn't adhere to GAAP standards! On the positive side, the scandal brought to light the importance of accurate and honest financial accounting practices.

If your career interest lies in financial accounting, you may one day find yourself on the management team of a large corporation; however, financial accountants are found in organizations of every size. On a day-to-day basis, they take bookkeeping records and other business transactions and use that data to prepare four reports required by the GAAP: the balance sheet, the income statement, the statement of owner's equity and the statement of cash flows.  In smaller companies, financial accountants may be involved in other areas of business management in addition to their accounting duties.

_{* Depends on company size, specific job and location
Sources:Payscale.com, 2009; Bureau of Labor Statistics, 2009}

The Perpetrators: Lay, Skilling and Fastow were executives of the Enron energy corporation, headquartered in Houston, Texas. Lay and Skilling both spent time as CEO, while Fastow's role was CFO.

The Crime: All three were convicted of a wide range of fraudulent practices, including financial accounting no-no’s such as false statements to banks and auditors, money laundering, insider trading and conspiracy.

The Verdict: Skilling and Fastow received prison sentences of 10 years and 24 years, respectively. Lay's sentence would have been the most severe—up to 45 years—but he died before the sentence could be scheduled.