The Many Different Types of Accounting

Accounting is an incredibly diverse field. It’s not just crunching numbers and pouring over old receipts to make sure you get the most amount of money back on your taxes. Accounting incorporates a number of different fields under an umbrella of four different main types of accounting: public accounting, management accounting, governmental accounting, and internal auditing.

Public accounting is the most varied of all the types of accounting, encompassing the most basic of accounting services such as bookkeeping and Certified Public Accountants (CPA), the latter of which requires a special certification. Public accountants are known to perform basic services such as simple tax preparation, or external auditing, which involves auditing the financial records of clients wherein their primary goal is to look at data and search for errors.

A subset of public accounting is forensic accounting. This specialized type of accounting involves going through past financial data to look for instances of fraud, embezzlement, and other forms of theft within companies. They are also typically hired by individuals going through divorces. In some occasions, a forensic accountant may be called upon by the court to serve as an expert witness.

The second type of accountant is a management accountant. Unlike an accountant who works in a firm of other accountants, a management accountant is typically employed directly by a company to serve as the head of finances within the company. They are responsible for making the financial decisions to help the business grow. This includes budgeting, taxes, and preparing financial statements for investors.

Next is governmental accounting. Government accountants work for government agencies and private business that work with the government. It is very similar to public accounting, performing duties similar to what a public accountant might for a business.

Finally we have internal auditors. These are the accountants responsible for coming in an cleaning house by reviewing the company’s management, finances, budgets, and more. They make sure nothing is being wasted and that everything within the company is being run in an efficient manner. Their job is to make a company a well-oiled and fine-tuned machine. A good example of this would be the two Bobs from the movie Office Space.

Underneath the umbrella of accounting are myriad titles and qualifications, including tax professional, financial advisor, and consultants. In the end, hiring an accountant is an important decision, and you should perform adequate research to ensure that you choose the right accountant for your needs, as well as one with the necessary skills and experience to ensure you walk away happy.

(Source 1 2) (Photo)
Posted on May 28, 2012 at 9:00 AM