As part of an accountant’s job, they’re charged with the duty of developing and also controlling the accounting system, which is required to record various transactions of businesses, trade, and transfer finances both in and out of the company.
The data documented and saved by these systems help the decision-maker (who in many cases is the manager or the shareholder) of the company to make the best decision regarding the flow of finances and other resources. The same data can be used by tax regulators to ensure tax compliance by businesses.
The different kinds of accounting that exist in the field
As an industry associated with business management, there are many subdivisions. Over time, the dynamic nature of the business community has caused the development of new areas within the field; as a means of keeping up with the ever-increasing accounting needs of the company and management community that also differ.
Financial accounting and reporting
As the name suggests, this particular type is associated with the development of reports that are meant for external use. The reports are produced as financial statements. Generally, the data on these financial reports includes the past performance of the business as well as the current financial status of the company. The creation of the reports is carefully guided by different accounting conventions, regulations as well as accounting specifications that have to adhere all along.
Management accounting is conducted with the primary focus being on internal use of the report for management reasons. Internal reports are given more financial information designed to boost the management of the organization, development of strategic plans, and most importantly development of the company’s budget. A great example of management accounting is cost accounting; which tracks and controls operational cost.
Other forms of accounting which have caught on and are progressively being used by accountants include Project Accounting, Governmental Accounting, and Social Accounting.
This form of accounting involves aspects of accounting and studies, put together to detect financial scams and to find the financial loss sustained during transactions; with facts used in court cases. The primal approaches and abilities used in this industry include auditing, accounting, and logical experience.
Tax accounting has become one of the most popular types of accounting services. Essentially, the accounting service provided here is associated with tax obligations by individuals and businesses. The financial statements prepared in this situation, are based on the set guidelines of a particular jurisdiction (since every legal system has its own tax laws and regulations). The statement is used to calculate the tax liability that someone has.
You might also be interested in: Choose The Right Tax Practitioner For Your Business
Samuel and Sonz
Visit Samuel and Sonz for professional accounting, auditing, taxation, payroll, secretarial, business valuations, buy-side due diligence, financial modeling, investment cases, and business plan services to SMEs and large enterprises.