Public accounting, which consists mostly of auditing the financial records of public companies, requires lots of travel time and a certification, the CPA (“certified public accountant”). Corporate accounting–“crunching numbers for internal review to help companies budget and perform better”–requires neither, although of course knowledge of accounting is helpful. ( Auditing must be done to standardized, generally-accepted procedures, while corporate accounting is more flexible. In general, the skill requirements of the two types of accounting are similar.

a) Which type of accounting job can be expected to have more turnover, in which employees leave one company to do the same type of accounting in another company? Why?

b) How similar would you expect the wages paid by different firms for equally-skilled public accountants to be? Why?

c) How do the travel requirements of public accounting affect the pay of public accountants? Use supply/demand graphs to illustrate, and describe how different types of workers get sorted into the two types of jobs.