5 Best Types of Accounting

Numerous options in the accounting field are available for organizations to follow that suit their business’s nature and culture to meet the demands of the company’s stakeholders. Accounting is a very vast field and there is much to explore for accountants. An accountant is a person who has to keep the record of day to day transactions and monitor the whole financial activities of an organization. When you are planning to apply in any accountancy firm, you must be clear about the accountancy field or area in which you want to step into.

There are different types of accounting, here the main types of accounting are mentioned

• Auditing

It is a very important branch of accounting in which a certified accountant examines the financial records of the company and highlights the areas where attention is required, internal auditors also identify flaws in internal control system and make sure that whole accounting and financial process of the organization flow smoothly. There are two types of auditors external and internal auditors. Internal auditors are employees of the same company and their job is to audit the accounts of the company and help the management in running the company on the right track. While external auditors are independent auditors and their job is to evaluate the accounts and produce accurate and clear audit report at the end of the audit.

• Financial accounting

It includes many things in it, it encompasses financial resources, maintenance of financial records, financial transactions, etc. The accurate financial statement helps investors to reach a decision about whether to invest or not. Financial statement includes balance sheet, profit and loss statement, cash flow statement. Financial accounting also helps to prepare tax files for the tax season. The job of the financial accountant is to maintain the record of financial transactions, monitor the financial activities, etc.

• Management accounting

To some extent it is similar to financial accounting, it is about maintaining the financial status of the company and generating financial reports at the end of the financial year while financial accounting generates a financial report to use for the external purpose, however, management accounting prepares financial reports to use internally. Management accountant can do recommendations, make predictions and generate financial reports for management to make crucial decisions.

• Tax accounting

The role of a tax accountant is to prepare the company to pay its tax liabilities. A tax accountant must know which items are taxable and which are not. he/she must be aware of the constant changes in tax laws. Tax accountants keep the track of transactions to know how much the company has to pay tax on the transactions. To prepare tax files is not only the job of a tax accountant, he/she also creates ways to reduce the amount of tax.

• Forensic accounting

 Detectives find evidence of a crime just like that forensic accountants invest time and skills to find out the crime in accounts. Forensic accountant examines and analyses accounts to find the traces of fraud. The small business hires forensic accountants or outsource forensic accounting while large corporate companies usually have forensic accounting staff in their company.

The above-mentioned types are basic types of accounting, there are many other types of accounting, choose the type of accounting of your interest and explore the new dimensions.