Types Of Accounting

Types Of Accounting


The different types of accounting range from auditing to the preparation of tax returns. When you apply for accountancy role to one of the big accountancy firms, you’ll be expected to know which area of accountancy you want to specialize in. We take a look at some of the main options. All Accountants tend to specialize in one of these fields in accounting, which leads us to the different career path listed below:


FINANCIAL ACCOUNTING
This field of financial accounting is concerned with the assemblage of financial information into external reports. Financial accounting requires detailed knowledge of the accounting process used by the reader of a company's financial statements, such as Generally Accepted Accounting Principles (GAAP ) or International Financial Reporting Standards (IFRS). Or, if a company is publicly-held, it requires an adequate understanding of the standards issued by the government entity responsible for public company reporting in a specific country (examples are the Securities and Exchange Commission in the United States). There are so many career paths involved in financial accounting. There is a specialty in external reporting, which usually involves a detailed knowledge of accounting standards. There is also the monitoring track, which requires a combined understanding of financial and management accounting.

ALSO READ: Importance And Purpose Of Accounting And Book Keeping

PUBLIC ACCOUNTING
Public accounting investigates the financial statements and supporting accounting systems of client companies, to help in providing assurance that the financial statements assembled by clients fairly present their financial results and position. This field demands excellent knowledge of the relevant accounting framework, as well as an inquiring personality that can penetrate into client systems as needed.

AUDITING
External auditing means the examination of financial statements of a business by an independent party with the purpose of expressing an opinion as to fairness of presentation and compliance with GAAP. Internal auditing focuses on evaluating the adequacy of a company's internal control structure by testing segregation of duties, policies and procedures, degrees of authorization, and other controls implemented by management.

ALSO READ: 20 Ways You Can Detect Fraud In Your Companies Account

SOCIAL ACCOUNTING
Social accounting is also known as Corporate Social Responsibility Reporting and Sustainability Accounting, this refers to the process of reporting implications of an organization's activities on its ecological and social environment. Social Accounting is mainly reported in the form of Environmental Reports accompanying the annual reports of business organisations. Social Accounting is at its early stages of development and is considered to be a response to the growing environmental consciousness amongst the public at large.

GOVERNMENTAL ACCOUNTING
This type of accounting is also known as public accounting or federal accounting and it refers to the type of accounting information system used in the public sector. It is a small deviation from the financial accounting system used in the private sector. The need to have a separate accounting system for the public sector arises because of the different aims of the state or government owned and privately owned institutions. Governmental accounting ensures the financial position and achievements of the public sector institutions are set in budgetary context since financial constraints are often a major concern of many governments. Separate rules are followed in many power to account for the transactions and events of public entities.

ALSO READ: Users Of Accounting Information

ACCOUNTING INFORMATION SYSTEMS
This types of accounting involves the development, installation, implementation, and monitoring of accounting procedures and systems used in the accounting process. It also includes the deployment of business forms, accounting personnel direction, and software management into the system.

FIDUCIARY ACCOUNTING
This types of accounting involves handling of accounts managed by a person entrusted with the responsibility and management of property of or for the benefit of someone else. some examples of fiduciary accounting include trust accounting, receivership, and estate accounting, etc

ALSO READ: Difference Between Accounting And Book Keeping

FORENSIC ACCOUNTING
Forensic accounting involves the reconstruction of financial information when a complete set of financial records isn't available at a given period. This skill set can be used to rebuild the records of a destroyed business, to rebuild fraudulent records, to convert cash-basis accounting records to accrual basis, etc. This career tends to attract auditors. They are usually needed in a consulting position, since few businesses require the services of a full-time forensic accountant. Those in forensic accounting are more likely to be involved in the insurance industry, legal support, or within a specialty practice of an audit firm.

MANAGEMENT ACCOUNTING
management accounting is mainly concerned with the process of accumulating accounting information for internal operational reporting. It includes areas such as cost accounting and target costing . A career track in this area can eventually lead to the controller position, or can diverge into a number of specialty positions, such as cost accountant, billing clerk, payable clerk, and payroll clerk.

ALSO READ: Top 10 Best Accounting And Finance Universities In The World

PROJECT ACCOUNTING
This refers to the use of accounting system to track the financial progress of a project through frequent financial reports. Project accounting is an important component of project management. It is a specialized branch of management accounting with an aim of ensuring the financial success of company projects such as the launch of a new product. Project accounting can sometimes be a source of competitive advantage for a project-oriented business such as construction firms.

TAX ACCOUNTING.
Tax accounting is more concerned with the proper compliance with tax regulations, tax filings, and tax planning to reduce a company's tax burden in the future and everything that has to do with tax. There are so many tax specialties, wanting the tax manager position.

ALSO READ: List Of Accounting Professional Bodies In The World

COST ACCOUNTING
Cost accounting is considered as a part of management accounting, cost accounting refers to the recording, presentation, and analysis of manufacturing costs over a given period of time. Cost accounting is very useful in manufacturing firms since they have the most complex costing process. Cost accountants are saddled with the responsibilities of analyzing actual and standard costs to help managers determine future courses of action regarding the company's operations.

FOCUSING ON A SPECIALIZATION
If you want to have a focus, you may want to consider obtaining an accounting certification in your chosen field. It will give you an edge over those who are not certified. Due to the increasing population and demand for capable professionals, you need to step up a little to get recognized in your field.

Some of the most famous certifications in the accounting field include the Certified Public Accountant (CPA), Certified Management Accountant (CMA), Certified Internal Auditor (CIA), Certified Financial Planner (CFP), and Certified Information Systems Auditor (CISA).

Post a Comment

0 Comments