As accountants are keen to tell you, the image of accountancy is changing. Accountancy is an industry with a growing profile and an even faster growing emphasis on accountability. Today, the profession can offer the incentives, challenges and financial rewards that are on a par with traditionally more glamorous professions, such as investment banking and law.
Accountancy is the language of business. Accountants measure, communicate and interpret financial activity so that users of the information can make informed decisions. This, for example, allows managers to look at their organisation, assess how well it is performing and implement strategies for future growth.
There are two main types of accountancy – financial and management:
- Management accountancy provides financial information to managers within organisations enabling them to make strategic and informed business decisions. It involves the identification, preparation, analysis, interpretation and communication of financial information, used by management to evaluate, manage, plan and assure the appropriate use of its resources and improve overall financial performance.
- Financial accounting, on the other hand, addresses the needs of decision-makers external to the organisation. These decision-makers may include investors, banks, suppliers, lenders, government agencies and regulatory bodies, special interest groups, and the general public. The financial accounting process typically culminates in the preparation of financial reports, such as balance sheets and quarterly or yearly income statements, that help to answer questions such as: 'What is the financial position of the company on a given day?' and 'How well did the company do during a given period?' Financial accounting is governed by rules (ex: IFRS, GAAP) which differ from country to country.
Interested in accounting but don't know which area to go into? Why not check out our article on Accounting Specialisations to help you decide which area of the industry is right for you.