Accounting or accountancy is a complex field that basically deals with the measurement, recording, interpretation, and reporting of financial and non-financial data about organizations including corporations and businesses. These data are used for a variety of purposes such as analysis, planning, management, planning and forecasting. However, many people often confuse accounting and accountancy for the same thing due to the similarities in the word ‘account’.

The major difference between the two is that accountants generally deal with financial statements to accountants usually deal with records. It is important for accountants to be highly qualified and knowledgeable about the various techniques and systems they use in preparing financial statements and reports. Apart from basic degree courses, accountants can take up Master’s degrees or PhDs for advanced studies in accounting. Most accountants work with large accounting firms or large companies to prepare and maintain their financial statements.

Before an accountant can understand the financial statements and reports, he needs to have a broad knowledge of business practice, taxation, mathematics, and ethics. He needs to understand how to collect information, use data, code them, analyze the data, summarize the data, come up with reports, make recommendations, and communicate with other professionals. To help accountants understand the financial statements better, it helps if he has experience and knowledge in different types of transactions like sales, purchases, inventory, financing, loans, and other cash flows. Accountants perform multiple functions when preparing financial statements like creating tables, maintaining records, analyzing the data, preparing reports, communicating with other professionals, etc. It is an important part of accounting. There are many kinds of accountants like tax accountants, business accountants, finance accountants, accounting managers, bookkeeping managers, insurance accountants, forensic accountants, and internal auditors.

As said earlier, a good accountant is an important factor in the running of a business firm or corporation. Before this person steps into the office, the manager or the president has to draft the rules for accountancy, set up policies for financial accounting, hire the accountants, give the employees their salaries, and pay their bills. After that, the president or the manager will start looking for a CPA to help him with his work. As we know, CPA (certified public accountant) is someone who is certified by the American Institute of Certified Public Accountants or AICPA. There are different kinds of accountants available in the market but all of them provide good services regarding the financial statements.

On the other hand, managerial accounting is less involved in making decisions and has more function in planning strategies and monitoring activities. The major advantage of managerial accounting is that it deals with financial reporting. The accountants create financial statements and managerial accounting reports such as the income statement, balance sheet, cash flow statement, and statement of cash flows.

Another type of accounting is an information science or management accounting. In this field, the accountant researches, analyzes, and creates financial statements from information science theories. This kind of accounting is more conceptual and less mechanical than managerial accounting. This kind of accounting gives more emphasis on financial transactions pertaining to products and services. It involves not only accounting principles but also psychology, economics, and systems thinking.


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