Accountants are practitioners of the accounting profession. They are the professionals to hire and look forward to when it comes to the accounting activities of a business. They can perform bookkeeping, accounting and auditing functions. There are various kinds of accountants and there are different tasks and responsibilities performed by a certain type of accountant. But overall, the accounting professionals take into account the different generally accepted principles of accounting and perform them in a professional manner.

What is Accounting?

Accounting is defined as the process of identifying, recording, measuring and interpreting economic information so users of that information may make financial, managerial and economic decisions and informed judgments based on it. Economic information includes the financial reports which are recorded summaries of financial transactions undertaken by an enterprise. Income statement, balance sheet and statement of cash flows are kinds of financial statements.  The economic information has great importance to the management of an enterprise in decision-making.

Moreover, financial reports are important to outside parties of an entity aside from the managers of a business. They may be relevant to regulators, government agencies, creditors, shareholders and owners.

There are two branches of accounting that have been constantly compared. They are financial accounting and management accounting.  The former refers to the processes that involve financial information such as financial statements that are accessible to public users. The financial accounting reports adhere to the generally accepted accounting principles as well as the financial accounting standards used in jurisdiction of the entity. 

On the other hand, the management accounting refers to the process of generating accounting information that is used as a basis in the decision-making of managers. The accounting information is normally confidential and is mostly used by decision-makers.

Tax accounting is another branch. It involves the financial accounting processes and other accounting methods needed to comply with the tax regulations of a certain jurisdiction.

Auditing is related to accounting but is a separate discipline. It involves an examination of financial statements and accounting records for the purpose of expressing an opinion on the accuracy and fairness of information taking into account the generally-accepted accounting principles. Auditors, the practitioners of auditing, may also provide expressed opinion normally in written form to the works of accountant particularly to the accountant’s adherence to the financial accounting standards and generally accepted accounting principles in all material respects.

Auditors are also considered accountants and may practice the accounting profession and other accounting tasks. They may be independent parties or employees of the company that provides the financial reports. There are two types of auditors: internal auditors and external auditors. The internal auditors are auditors within a company while external auditors are those hired by companies to perform audit works. It is important to note, however, that the function of accountants differ from auditors. It is not ethical for auditors to perform examination on financial reports that they have made.

Accounting firms may provide audit functions and are considered auditing firms. The Big Four accounting firms which are PriceWaterhouse Coppers, Ernst and Young, KPMG and Deloitte Touche Tohmatsu are also regarded as auditing firms.  Accounting firms may also perform bookkeeping jobs for companies.

Bookkeeping is another practice that is related to accounting. It refers to the recording of all financial transactions undertaken by an organization or individual. Accountants may qualify for a bookkeeping job. However, any person can perform bookkeeping as long as he knows how to record the financial transactions in journals and ledgers and has the idea about the double entry bookkeeping system. There are rules and procedures to follow in recording financial transactions using the double-entry system however. Normally, bookkeeping is seen as an accounting fundamental.

The qualification of accountancy and the practice of accounting of accounting may vary between countries and jurisdictions. The certification of accountants may qualify the professionals to practice accounting profession publicly. Accountants may be recognized from a variety of accounting bodies and organizations.

Accounting is the methodology that refers to the process of generating economic information. It is often regarded as the language of business.