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What is Accounting?
Mary McMahon
Mary McMahon
Accounting is the backbone of business. Ethical and professional practices form a clear financial image of a business and allow managers to make informed decisions, keeps investors up to date on developments in the business, and keeps the business profitable. It is also one of the oldest professions; businesses have been practicing accounting for thousands of years. Cuneiform tablets from the fertile crescent, for example, show clear evidence of these practices.
A number of disciplines are involved in accounting. At its root is bookkeeping. A bookkeeper keeps tracks of all of the funds that a business handles, including money paid to the business, money paid out, and assets that the business holds. His or her goal is to keep the ledgers of the company balanced so that anyone can assess, at a glance, the financial state of the company. Records handled by a bookkeeper include payroll, company ledgers, bank statements, and paperwork pertaining to real estate and investments.
Auditing is also included in accounting. Auditing protects employees, investors, and owners of a company from fraud, and it is usually performed by an outside agency. During an audit, an accountant will examine the ledgers of a company, along with many other records, to see if they provide an accurate picture of the financial doings of the business. If other financial records such as bank statements do not support the picture presented by the ledgers, the auditor must find out why. Part of accounting is establishing internal controls to keep a company's business clean, so that a company can fearlessly face an audit.
The financial records of a company are used to make important decisions, such as whether or not to make a major investment. Proper financial management supports company officials while they make these decisions, showing them whether or not an investment will be practical and if the company can afford it. Accountants prepare regular statements that are distributed to company officials so that they can follow the health of the business, and they also handle tax rolls and reports to government agencies.
The size of an accounting staff varies, depending on the company. In the US, the primary employees are typically certified public accountants, who must pass a test administered by their state. They may, in turn, oversee clerks who have bookkeeping training, but who are not fully certified. A single head accountant supervises the entire department, and ensures that work is being performed in a timely and accurate fashion. Typically, the head of the department performs an important role in a company, and will frequently meet with the company's head or board to keep them informed.
Mary McMahon
Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.
Learn more...
Mary McMahon
Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a SmartCapitalMind researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.
Learn more...AS FEATURED ON:
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![Accounting clerks are usually the lowest position in an accounting office.]()
By: Renee JansoaAccounting clerks are usually the lowest position in an accounting office. -
![In most companies, the staff accountant would deal with the company payroll.]()
By: Marzky Ragsac Jr.In most companies, the staff accountant would deal with the company payroll.
Discussion Comments
Accounting is a science rendering its responsibility to the enterprise for carrying out its business transactions. To better understand accounting science, other related sciences an disciplines such as mathematics, taxonomy, dichotomy, epistemology, operations research, quantitative models such as PERT-CPM, linear programming, dynamic programming, heuristics, taxation, etc. should be studied.
Accounting is not bookkeeping. Accepting such an assertion is quite wrong. Accounting has its own numerous scientific principles. Accounting applies numerous enterprise techniques such as controlling, planning, budgeting, etc. --Jose
@pleonasm - That's something which I think gets overlooked when people are seeking out an accountant. You really want someone who is going to be in your corner and who you feel comfortable working with.
Most accountants are decent people of course, but there's the ones who only do the bare minimum of what they have to and then there are the downright corrupt ones. You need to make sure you get one of the good ones and one that will understand the way you do things as well.
@anon29571 - It's going to vary depending on where you are in the world, and who you go to in order to get advice, as well as what you actually want them to do. Most small businesses go to accountants on a need-to basis since it can be fairly expensive and it's easy enough to keep your own accounts using accounting software.
I would definitely shop around if you absolutely need an expert on something, as you should be looking for not only a good price, but also an accountant that you can build trust and a good relationship with.
@anon161031 - It's going to differ depending on what country you are in as to what you should do. It's also going to be different depending on what kind of job you're expecting to get and how far up the career ladder you want to go.
There is a lot of basic career advice out there, if you have a look on a search engine for something like "paths into accounting, USA" or something similar.
Generally, I imagine you'll have to go to university, and complete a specialized degree although I will almost guarantee that there are online courses you can do as well, they probably won't be as respected as an on the ground accounting course. If you have an idea of which university you want to go to, contact their career specialists and ask them what you need to do. It will also depend on how you did in high school, of course, as to where you'll be able to go.
Good luck, I hope you find what you're looking for.
accounting is good knowledge for doing office work and big business income and other activities.
So I'm out of high school recently and I'm planning on taking a year off working full time but if I want to become a CA, from the beginning where I am, what steps should i take into this.
There are programs I've seen like at Georgian, they have book keeping, then at Cambrian they have the full on Accounting program. I'm not sure how to get started because I don't really have any clue what accounting is and I don't want to go into college blind, if you know what i mean. I'm confused and i don't want to waste my time. Would there be online courses to help me? So far i really haven't been given any help.
what does it take to be an accountant? what kind of classes would i have to take to be an accountant?
To be an accountant you simply take a course in accounting or its equivalent. Then go for a professional course to back it up.
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How does accounting work for its stakeholders as an information system?
what do you have to do to become an accountant?
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