Updated May 20, 2024

Corporate Accounting: Meaning, Needs, Jobs, and Earnings

Corporate accounting is a branch of accounting that monitors the management of a company’s accounts. This includes tracking the transactions in the books of accounts, preparing financial statements, analyzing performance, and much more.

Due to escalating cases of audit manipulation in recent times, big corporations have started focusing more on corporate accounting by appointing qualified professionals and quitting unethical accounting practices. 

Considering the increasing need for awareness, we have written this guide to help you understand corporate accounting. Here, we bring to you the significance, strengths, and limitations of corporate accounting. 

So, make sure to read till the end to expand your knowledge of accounting.

What is Corporate Accounting?

Corporate accounting is concerned with recording a company’s assets, liabilities, expenses, expenditures, income, revenue, purchases, and cash flow from different activities. Moreover, it prepares, classifies, analyzes, interprets, and summarizes the financial statements of a company.

Where public accountants are flexible and work independently for a wide range of clients, corporate accountants are dedicated and work on a particular company’s finances.

Due to the similar nature of recording financial transactions, people confuse corporate accounting with financial accounting, but they are different.

They are the same pictures from The Office.

Although both are branches of accounting and are often used interchangeably, they are different aspects of accounting. Read the subsequent section to learn what differentiates these two.

Differences Between Corporate Accounting and Financial Accounting

In financial accounting, transactions are recorded, and financial statements are made for external users of accounting information such as investors, suppliers, banks, customers, and government authorities.

Corporate accounting focuses more on internal financial processes such as performance evaluation, an amalgamation of companies, internal financial reporting, and budgeting.

This table will give you a detailed analysis of the differences between corporate and financial accounting. 

BasisCorporate AccountingFinancial Accounting 
DefinitionCorporate accounting is the process of recording a company’s financial transactions. These transactions include expenditures, income, revenue, and purchases.Financial accounting is the process of recording, summarizing, and reporting a company’s business transactions through financial statements.
ScopeIt has a wider scope.It has a narrow scope. 
Types1. Financial Accounting
2. Cost Accounting
3. Tax Accounting
4. Managerial Accounting
5. Auditing
1. Cash
2. Accrual
Motive Aims to identify, assess, and manage financial risks.Strives to record the financial transactions of a particular period effectively. 
ResponsibilityCorporate accountants are responsible for handling the accounts of a single employer or company. Financial accountants can work both independently and for an employer. 

Importance of Corporate Accounting

Apart from identifying the financial risks, the following are the reasons why corporate accounting is essential.

Manages Accounts Payable and Accounts Receivable

Before jumping on that, let’s see what accounts payable and accounts receivable mean.

wait a minute, who are you meme

Account payable is the money owed by the company to external entities. It includes credit purchases, accrued expenses, and dividends payable. 

Accounts receivable is the money owed to the organization by external entities. It mostly includes trade receivables. 

Managing accounts payable and accounts receivable helps a company stay aware of its financial situation and keep track of its operating cash flow. Not maintaining accounts payable and receivable will ultimately result in ruining relations with suppliers and the debtors turning into bad debts. 

Records Business Transactions

One of the most basic functions of accounting is recording business transactions. It not only maintains the accuracy of the financial statement of a company but also keeps the journal relevant. 

Recording business transactions in trading accounts and P&L accounts.

Ignoring or inaccurate financial reports can result in incorrect decision-making, penalties, and legal actions.

Prepares Financial Statements & Performs Analysis

A corporate accountant is responsible for preparing the financial statements of a company, such as the balance sheet, income statement, and cash flow statement. It enables the company to understand its financial position.

financial statements of a company

Furthermore, performing yearly analyses of these statements helps in effective decision-making, ratio analysis, liquidity, profitability, and cash flow analysis.

Payroll Management

Payroll management is concerned with recording the payroll data of the employees in the journal and respective accounts. Although it is HR’s duty, sometimes it is done by accountants.

Payroll management by corporate accountants

Corporate accountants calculate, manage, and record the employees’ remuneration for their timely payment and smooth management of the company’s workforce. 

Not managing this aspect can even result in legal issues, employee dissatisfaction, and damage to the company’s reputation.

Appropriation of Net Profit and Loss

The net profit in the profit and loss account is not for distribution, as there are a few expenses included. To get the actual profit, accountants need to deduct those expenses from the net profit.

the difference between profit and loss appropriation and profit and loss statement

Corporate accountants are responsible for finding out the actual distributable profit out of the profits generated. They do this by creating a separate account called “Profit and Loss Appropriation Account,” in which the company’s expenses are recorded on the debit side and income on the credit side.

Privacy and Security of Accounting Information

Disclosing the financial data of a company to a public accountant may lead to serious threats. Legal compliance like the Gramm-Leach-Bliley Act (GLBA) and Sarbanes-Oxley Act (SOX) safeguards the financial information of the corporations, consumers, and partners by mandating the appointment of a qualified individual and destroying the printed financial data either by shredding or burning.

Burning financial documents

Therefore, corporate accounting is preferred over public accounting as it is more security and privacy-driven. 

After understanding the meaning and importance of corporate accounting, you might envision a future for it. Thus, a proper roadmap is a must to become a corporate accountant.

Roadmap for Becoming a Corporate Accountant

Targeting a career in corporate accounting without a proper strategy can lead to a lack of direction, objectiveness, and prioritization. You need a fitting roadmap to carve your path to success. Therefore, we have come up with a set of instructions to help you on your journey.

Bachelor’s Degree

Earning a bachelor’s degree is a must to enter the realm of corporate accounting. Concerning that, having a degree in domains like accounting, business, and economics will increase your job-scoring chances. It shows the employer that you are skilled enough to have a basic knowledge of accounting.

Earn Certifications

While some entry-level jobs only require you to hold a bachelor’s degree, others might hire experts with professional certifications. To score such opportunities, you have to acquire an accounting certification. 

The following are the two most common certifications for outshining yourself in corporate accounting.  

  • Certified Public Accountant (CPA) Certification – Provided by the American Institute of Certified Public Accountants (AICPA), this 5–7 years certification will excel you in areas like forensic accounting, personal financial planning, and taxation. 
  • Certified Management Accountant (CMA) Certification – Provided by the Institute of Management Accountants (IMA), this three-year certification sharpens your accounting knowledge for business growth strategies and comprehensive financial analysis.

Besides their area of expertise, CPA-certified professionals can also work independently, offering financial services to individuals and businesses.

Score an Internship

Along with passing the exams for the programs, one also needs to fulfill their work experience requirement. The prior experience helps the upcoming accounting professionals grasp the industry and build relevant skills.

Here’s a quick sneak peek into the work experience requirements that one has to fulfill as a CPA or CMA!

1–2 years of work experience in a public accounting firm.2 years of continuous work experience with 40 hours of work per week is required. 
An internship is allowed in some states. Make sure that it is under the supervision of a CPA professional.An internship of at least 20 hours per week for 4 years is allowed.

Gain Experience Through Entry-Level Jobs

After completing the CPA or CMA exam, start applying for entry-level accountant jobs. These opportunities are great for networking, building a foundation of knowledge, and gaining practical experience.

Target a corporate accounting specialization and start applying for entry-level positions such as junior financial analyst, assistant staff accountant, and associate internal tax auditor. Moreover, keep a growth mindset while entering the industry, as it can help you learn the insights of the domain.

Apply for a Corporate Accountant Job

Now comes the time that you have been waiting for. After working for 2–3 years in a fresher role, it is time to score a corporate accountant role. Utilize your network to find a suitable job vacancy for yourself. You can also seek out positions within your current organization, as getting a promotion is better than switching organizations. 

How Much Does a Corporate Accountant Earn?

Due to the complex tax regulations and continuously evolving business landscape, financial services are in high demand, resulting in corporate accounting becoming one of the most sought-after specializations. 

The following table compares potential job titles after excelling in corporate accounting.

Job TitlesEarnings in 2023Earnings in 2024
Financial Accountant $51,000 – $80,000$52,000 – $90,000
Management Accountant $53,000 – $1,00,000$55,000 – $1,10,000
Financial Analyst$58,000 – $1,15,000$60,000 – $1,30,000
Tax Accountant$50,000 – $72,000$62,000 – $85,000
Cost Accountant $60,000 – $79,000$60,000 – $1,00,000

Remember, these are just earnings estimates and are not the exact figures. 

Corporate Accounting: Advantages vs Disadvantages

Now let’s look at the advantages and disadvantages of corporate accounting.

1. Limited liability: Shareholders are not personally liable for bearing the losses and financial risks of the business.1. Focuses on monetary items: It only records the monetary aspect of the items.
2. Transfer of ownership: The owner of a business can sell the ownership to others in the form of equity shares. In return, capital is raised from the buyers.2. Double taxation: A company pays tax two times, one on the earned profit and the second on the dividend paid to the shareholders.
3. Perpetual life: It means that the business is separate from its owners, and it will continue irrespective of the deaths, insanity, and bankruptcy of its owners.3. Accounting can be biased: An accountant has a very high influence over the company’s accounts. It can lead to opting for different methods to make changes in the accounts.
4. Assist in auditing: Corporate accounting leverages the transparency of accounting information by auditing the financial statements of the company.4. Accounting data can be manipulated: Changes can be made in the accounts to reduce the actual profit in the financial statements. It allows companies to reduce their taxable income and save their tax money.
5. In compliance with the law: Corporate accounting ensures that the company is in line with the laws, industry standards, and regulations.
6. Checks business growth: It makes inter-firm and intra-firm comparisons easy by preparing the financial statements and allows the detection of business growth chances.
7. Determines the financial health of the business: Preparing financial statements is the primary function of accounting, which tracks the financial situation of the company.


Knowing what is Corporate accounting, now you must be aware that it plays a pivotal role in decision-making, maintaining the books of accounts, and preparing financial statements. It is a combination of several kinds of accounting branches that influence the functioning of the business. 

Companies need to concentrate on corporate accounting rather than just focusing on financial accounting. Financial accounting only emphasizes the company’s financial achievements, whereas corporate accounting focuses on financial management and the estimation of business expenses and income for the company.  

Also Read: Standard Costing – Meaning, Questions, Pros and Cons

Frequently Asked Questions
What does a corporate accountant do?

In simple words, a corporate accountant prepares, analyzes, and audits the financial statements of the company. Furthermore, they are responsible for preparing and submitting the tax returns.

Is corporate accounting stressful?

Corporate accounting is considered one of the most stressful jobs in the world. Accountants are under constant stress from tax deadlines and preparing financial statements.

What are the various financial statements prepared in corporate accounting?

The following are the types of financial statements prepared by accountants.

  • Balance Sheet
  • Income Statement
  • Cash Flow Statement
  • Retained Earning Statement
  • Statement of Comprehensive Income
What are the various types of corporate accounting?

The following are the various types of corporate accounting.

  • Financial Accounting
  • Cost Accounting
  • Managerial Accounting
  • Forensic Accounting 
  • Auditing
What does a share of a company mean?

Shares are the unit of a company’s ownership or capital. These are issued by the company to raise money for development and growth purposes.

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