As a result of economic, industrial, and technological changes in business, specialised branches of accounting have evolved. Let's have a look at the many branches of accounting and see what they are particularly good at.
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1. Financial Accounting
Keeping track of and classifying business transactions, as well as creating and presenting financial statements for use by internal and external users, is the responsibility of financial accounting.When preparing financial statements, strict adherence to generally accepted accounting rules, sometimes known as GAAP, is required. Traditionally, financial accounting has been concerned primarily with the processing of historical data.
2. Managerial Accounting
Managerial accounting, often known as management accounting, is concerned with providing information for internal users, such as management. However, rather than strictly adhering to generally accepted accounting rules, this branch is concerned with the needs of the company's management.Managerial accounting include financial analysis, budgeting and forecasting, cost analysis, the evaluation of business choices, and a variety of other functions.
3. Cost Accounting
In many cases, cost accounting is considered a subset of management accounting; yet, it relates to the process of documenting, presenting, and analysing the costs associated with industrial operations. Cost accounting is extremely beneficial in manufacturing organisations since they have the most intricate costing processes of any other type of organisation.Cost accountants also compare actual expenses to budgets or industry standards in order to assist management in determining future courses of action regarding the company's cost control.
4. Auditing
Generally speaking, external auditing refers to the review of financial accounts by an independent party for the aim of giving an opinion on their fairness and compliance with generally accepted accounting principles (GAAP). Internal auditing is concerned with determining the effectiveness of a company's internal control structure by examining the division of roles, rules and processes, levels of authorization, and other controls put in place by management.
5. Tax accounting
Tax accounting assists clients in complying with the standards established by tax authorities. It consists of tax planning as well as the preparation of tax returns. It also includes the determination of income tax and other taxes, tax counselling services such as identifying legal ways to reduce taxes, evaluating the repercussions of tax actions, and other tax-related concerns.
6. Accounting Information Systems (A.I.S.)
It is the development, installation, implementation, and monitoring of accounting procedures and systems that are utilised in the accounting process, which is referred to as accounting information systems (AIS). It entails the use of business forms, the supervision of accounting workers, and the administration of computer software.
7. Fiduciary Accounting
Fiduciary accounting refers to the handling of accounts by a person who has been entrusted with the custody and administration of another person's property or for the benefit of that individual. Trust accounting, receivership accounting, and estate accounting are only a few examples of fiduciary accounting.
8. Forensic Accounting
Forensic accounting encompasses a wide range of activities that include court and litigation proceedings, fraud investigation, claims and dispute settlement, and other legal-related activities. This is one of the most prominent accounting trends currently in use.
