Accounts and finance
Accountancy or accounting is the measurement, declaration or the furnishing of assurance of information regarding finance which is mostly used by managers, tax authorities, investors and others to make resource allocation decisions in various commercial organizations. Accounts help in communicating with the user information regarding the financial position of a body and to make a wise judgment on the matter. Quite often accounting is rightly referred to as the language of business. There are different types of accounting.
Financial accounting, management accounting, tax advice, book keeping, auditing, lean accounting, forensic accounting are some to name a few. In financial accounting information regarding the finance aspects of a business is stored, recorded, classified, interpreted and made into a laconic form for further use. Access to such information solely depends on the type of organization. If it is a public sector organization, this information is generally accessible to all. Management related accounts are generally not open for public access. It is confined to a small group of people, most often the decision makers of the organization. Accounts related to tax is kept to comply with the tax regulations. Accounts and finance are therefore two aspects of a business that go hand in hand which is very essential for the successful running of the body.
Importance of accounts
When discussing finance and accounts another important aspect that must be taken into consideration is auditing. Auditing is a related but separate section of accounting. It has two sub-disciplines - internal and external auditing. As the word implies, an external auditor is someone from the outside who does the auditing for the company, while an internal auditor is someone who is employed by the company. Auditing can be easily defined as the evaluation of a person, process, organization or product. Accounting or accountancy tries to create accurate information about financial situations which are then later used by finance managers, regulators, shareholders etc. The day to day record update involved in this process is known as book keeping. Now an even more developed way of book keeping called two-way book keeping has also emerged which enhances the quality of the accounts. The importance of accounts and finance is that it helps a company or organization grow and prosper in the most efficient way. Since an organization deals with a large number of clients it is essential to keep proper records regarding the personal data and details of all the transactions performed.
Who does accounting
People who practice accountancy are known as accountants. The basic qualification to be a financial accountant is the Chartered Certified Accountant (ACCA or FCCA) or the Chartered Accountant (CA, FCA or ACA). Similarly there are other qualifications like ACMA, FCMA and AICWA for Management accounting and CPA and CGA for others. The accounts and finance related topics are properly scrutinized and interpreted by these accountants. It is not uncommon for a big organization to hire external organizations that specialize in accounting, as this forms the core of their business.
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