Accounting involves collecting and organizing financial data. There are different types of accounting, including managerial, financial, government, and forensic accounting. Managerial accounting is for internal use, financial accounting is for external use, government accounting focuses on budgeting, and forensic accounting is used in legal cases.
Accounting is the practice of collecting and organizing financial data. Individuals who practice in this field tend to have degrees in accounting and are usually certified to legally act as certified public accountants. All organizations that have financial planning needs also need accountants. This practice is also used in contexts where financial litigation or legal action occurs. Some of the most common types of accounting are managerial accounting, financial accounting, government accounting and forensic accounting.
Managerial accounting is one of the types of accounting used by private companies. Professionals who practice management accounting collect and organize financial data that is used by managers to form business plans and strategies. As a general rule, this type of accounting is performed for internal use only. Accountants in this profession may handle data on projects, budgets, and revenue.
Individuals who practice financial accounting also tend to work for private companies. These types of accounting practices require professionals to prepare documents used by third parties outside an organization. For example, prospective shareholders interested in a company’s financial health may request documents prepared by these accountants. Regulatory agency auditors may also request documents prepared by financial accountants.
Professionals who work in government accounting are professionals who serve the public. A key difference between government accounting and types of accounting in the private sector, such as managerial accounting, is that the main purpose of government accounting is not to generate profit. On the contrary, individuals who practice government accounting tend to be concerned with issues of budgeting and planning for the use of resources.
In the field of private accounting, professionals tend to consider various economic resources when preparing returns. They can look at assets such as equipment and stocks as well as cash flow. Government accountants, on the other hand, primarily look at finances and how they are spent by different agencies.
Another of the common types of accounting is forensic accounting. Professionals in this field prepare and analyze financial documents that are used in a court of law. Most large organizations hire their own financial accountants to handle issues such as fraud and employee claims related to injuries and other types of liability.
Forensic accountants can also work with individual clients on cases such as divorce and child custody. A professional may be responsible for determining each party’s income. Although a forensic accountant is almost never asked to give an opinion at a legal trial or hearing, he or she may be asked to report findings.
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