Definitions and explanations
An economist is a professional who collates data from the economy, studies and analyzes it by applying economic theories and prepares reports thereon.
Economists can study macroeconomic factors such as GDP, consumption, unemployment, inflation and price indices etc. They also study microeconomics factors such as consumer demand and supply, price fixing, production metrics, market competition etc.
The functions carried by an economist include:
- Analyse economic conditions and issues
- Surveying to collate economy related data
- Apply statistical and economic theories to analyse the data
- Prepare analytical reports
- Study historic trends in the market and generate forecasts based on them
- Make recommendations to various stakeholders to take advantage of economy trends
- Study and help solve economic problems by applying economic theories and trends analysis
An economist can work for various entities:
- For government departments and international organisations – to assist in policy making and assess policy implementation
- For business houses – to assess how economic conditions impact their business
- For research firms
- Independently – economists can also undertake research independently to be published in newspapers and other professional publications
An accountant is a professional responsible for recording and analyzing financial transactions of an enterprise. The primary responsibilities of an accountant can include:
- Recording monetary transactions in the books of accounts of an enterprise. This includes recognition of income and expenses and transactions effecting asset and liabilities of an enterprise
- Maintaining documentary evidence of recorded transactions
- Drawing up financial statements of the enterprise based on prepared books of accounts as per accounting standards and rules
- Analyzing these records and preparing various financial reports for higher management
An accountant may also be responsible for additional responsibilities which can include:
- Evaluating efficacy of accounting systems in place
- Assisting in computation of various taxes payable by an enterprise
Accountants generally report to upper level management to whom they present financial reports. Accountants may also make various recommendations to upper level management based on their analysis and resultant financial reports. Recommendations can include among other things budgeting, costing and compliance.
Difference between economist and accountant:
The difference between economist and accountant has been detailed below:
1. Key role
- The key role of an economist is to study various parameters of the economy, apply various statistical techniques to analyse them, identify trends and make recommendations.
- The key role of an accountant is to record financial transactions of an enterprise in its books of account.
2. Scale of work
- Economists analyse conditions of the economy as a whole. Economists thus work at a macro level.
- Accountants are concerned with financial transactions of an individual enterprise. Accountants thus work at a micro level.
3. Recipient of services
- The work of economists is intended for the benefit entities at all levels right from individuals to businesses and the government and its organisations.
- The work of accountants is intended for the benefit of a small group – the upper level management and investors of the enterprise.
4. Employment avenues
- Economists can work independently or be employed by government and international organisations, business corporations, research firms and educational institutions.
- Accountants on the other hand can be employed by entities that require accounting services such as government departments, public and private entities, accounting firms etc.
5. Educational background
- To be an economist one requires a degree in economics. An advanced degree such as a masters or a PhD would be more suitable to qualify as an economist.
- To be an accountant one requires a degree related to accountancy. This may include a bachelors or masters degree in accounts or a professional certification such as a CPA.
6. Covered by statutes
- Economists generally follow and apply different economic theories. They are usually not governed by any mandatory statute.
- Accountants on the other hand have to comply with accounting standards and rules which are mandated by the jurisdictional law.
Economist vs accountant – tabular comparison
A tabular comparison of economist and accountant is given below:
|Studying the economic conditions to make forecasts||To maintain and analyse books of accounts|
|Scale of work|
|Macro level – at level of the economy||Micro level – at level of the individual enterprise|
|Recipient of services|
|Larger group – individuals, businesses and government organisations||Smaller group – Investors and key management personnel|
|Available in government departments, international organisation, business houses, research firms and educational institutions||Entities that require accounting services|
|Advanced degree in economics||Degree in accounts or professional certification|
|Compliance by statutes in their work|
Conclusion – economist vs accountant:
Both economists and accountants are professionals who have attained a degree of specialization in their respective fields. Economists and accountants both help entities and organisations in making prudent financial decisions. They however do differ in the area of their work and their specific responsibilities.