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The study of numerous financial communication or transactions is known as accounting. Usually, the businesses or companies have hired accounts so that they analyze or record the financial aspect of the company or business. In addition, accounting is also defined as the complete study in which an accountant might review, analyze as well as present a report regarding the financial dealings of a particular business. In accounting, there are several branches which are used for numerous purposes.
Particularly, there are six most common branches of accounting. All these branches have played an essential role in the business. Accounting procedures creates the transparency in the business. In addition, all these branches of accounting are discussed below in the given manner:. Management accounting is one of the branches of accounting. In this branch of accounting, financial statements are presented to the managers so that they will analyze the financial condition of the company.
Financial statements contain financial information about a particular company or business. They provide real time as well as complete and accurate information to the senior management of the company. Financial information is quite essential for management in order to make objectives or strategies for the company. In addition, it is also help in making the short term decisions after seeing the previous information. A number of processes are involved, if the management wants to make a successful strategy or objective.
These processes are planning, implementation, and evaluation. It is necessary that the objective should be well planned, its implementation should also be properly organized and the evaluation criteria should developed in order to analyze the results of the objectives.
In order to record their revenues as well as expenditures, the non-profit organizations hire fund accountants. These accountants use their knowledge to maintain financial accounts of non-profit organization. Fund accountants are responsible to record the earning and spending, compose the financial statement on monthly, quarterly, semiannually, or annually basis, and formulate the NAV Net Asset Value on a regular basis. Tax accounting is mainly followed by the government and regulation authorities.
This type of accounting is generally focuses on the process of tax collection. The process to record the tax amount is paid by the companies, businesses or individuals, etc. Each country has its own procedures or tax ratios for the individuals or companies. The essential difference between the financial accounting and tax accounting is that tax accounting comprises on the laws of tax collections; whereas the financial accounting is based upon the operating activities of a business.
Auditing is one of the most important branches of accounting discipline. The reason to do auditing is to ensure that the practices which a business can be followed are ethical. The responsibility of the auditors is to inspect business procedures and verify the financial accounts.
It is also the duty of auditors to highlight the unlawful practices, penalize the businesses or companies and guide them about following the ethical practices. In the branch of auditing, there are two kinds of auditors such as internal auditor and external auditor.
Internal auditors inspect the internal environment of the business; whereas the external auditors scrutinize the external environment of the business. Financial accounting is also the part of accounting. It is considered as one of the most important branch of accounting discipline. In the financial accounting, one can learn that how the company presents their financial information for different kinds of stakeholders. Financial statement shows the financial information of the company such as operational activities; profit or loss, outflow and inflow of cash many others.
Finance managers are responsible to create financial statement of any company or business. Moreover, it is the duty of finance managers to gather the knowledge regarding the financial transactions, analyze it and present it in the form of report. The reason behind to publish the financial results is to inform the stakeholders about the financial condition of the company.
Forensic accounting is also the branch of accounting. In this type of accounting, one can analyze the financial information in order to inspect the frauds as well as the scandals. This branch of accounting normally used in the legal proceeding.
The professionals of this field are known as forensic accountants and forensic analytics. These professionals are responsible to follow some key procedures in order to investigate a financial problem. The key steps for forensic accountants are collection of data, preparation of data, data analysis, and reporting the information.
Forensic accounting is used to do analysis for some of the issues that include:. Accounting is an academic discipline that is used by several companies or businesses in order to determine the financial outcomes. By taking the help of accounting, there are lots of people are able to done different type of evaluation or estimation. The essential issue for the students of accounting is to make a financial report.
In addition, the theories of accounting are important for the students in order to generate the best results which will be useful in the future studies. It is necessary that an individual must be familiar with the basic concepts and theories of accounting so that they are well prepared to make a financial report.
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An accountant investigates the commercial transactions by the processes such as evaluation, review and report.
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