Question

should Accounting in the public sector be the same as in the private sector

Answer 1

Public accounting: The easiest way to understand the difference between Public vs Private accounting is to understand who they render their services to. A public accounting firm has the expertise and resources to provide accounting, auditing, taxation, consulting & advisory services to the broader client segment such as Government agencies and Multi-national organizations. Private accounting is relatively a narrower concept and is limited in its nature and function. Private accounting refers to maintaining the accounts related to any specific company and is essentially a part of the organization. Private accounting is usually considered to be an ‘internal’ part of the organization, as private accountants are very much a part of the business and corporate structure.

Differences Between Public vs Private Accounting

• Public accounting is an ‘external’ part of any organization and does not have any place in its corporate structure, whereas private accounting is an ‘internal’ part of the organization and is an integral part of the corporate structure.
• The big four companies (Deloitte, KPMG, PWC & E&Y) are the examples of public accounting firms and private accounting professionals take the place in private accounting space.
• Public accounting covers a wide array of accounting & advisory related work; on the other hand, private accounting is limited to the internal transactions of the business.
• Public accounting firms can review & audit the work done by private accounting professionals, whereas private accounting professionals don’t do the same.
• Some of the examples of the work done by Public accounting firms are 1. Auditing the financial statements and giving an opinion on the same, 2. Providing advisory on the accounting policies & methods of the clients, 3. Helping clients pay their taxes as per the taxation rules. Private accounting work involves 1. Recording daily business transactions in the accounting books, 2. Setting up systems to ensure compliance with the accounting rules, 3.Carrying out internal audit of the records in a timely manner.