Types of Accounting Overview of 7 Most Common Accounting Types

Professionals can work at the city, county, state and federal levels for organizations like public schools, the military and law enforcement. Financial accounting is focused on the analysis and reporting of financial transactions in businesses. Although accounting and finance are both vital to the healthy functioning of a business, they have different meanings and accomplish different goals. Accounting, for example, refers to how a business acquires its money and how much it distributes outward to cover expenses.

As CPAs who specialize in management accounting, CGMAs must demonstrate advanced proficiency in finance, operations, strategy and management. To receive a CGMA designation, management accountants must fulfill specific educational, experiential and testing requirements. This field requires excellent knowledge of the relevant accounting framework, as well as an inquiring personality that can delve into client systems https://www.bookstime.com/ as needed. The career track here is to progress through various audit staff positions to become an audit partner. The BLS lists the median annual salary for forensic accountants as $80,180 in 2018 and projects 7% job growth from 2018 to 2028. Forensic accountants often possess a bachelor’s or master’s degree and have an accounting background. Even outside of this window, tax accountants still have other duties.

Accounting Certificate Holders

Essentially, any information that may be useful to management falls underneath this umbrella. Accounting is the process of recording financial transactions pertaining to a business.

Also, they may work in tandem with regulatory groups, such as the Internal Revenue Service . At the state and local levels, government accountants must ensure that agencies or departments comply with standards set forth by the Governmental Accounting Standards Board . At the federal level, government bodies must comply with the Federal Accounting Standards Advisory Board . Those in the management accounting field are concerned with the process of accumulating accounting information for internal operational reporting. A career track in this area can eventually lead to the controller position, or can diverge into a number of specialty positions, such as cost accountant, billing clerk, payables clerk, and payroll clerk. Accounting has several subfields or subject areas, including financial accounting, management accounting, auditing, taxation and accounting information systems.

Tax accounting

Public accounting firms may also advise clients on accounting software applications if necessary. A doctorate is required in order to pursue a career in accounting academia, for example, to work as a university professor in accounting. The Doctor of Philosophy and the Doctor of Business Administration are the most popular degrees. Depending on its size, a company may be legally required to have their financial statements audited by a qualified auditor, and audits are usually carried out by accounting firms. The social work education programs provided by the University of Nevada, Reno School of Social Work are accredited at the baccalaureate and master’s levels by the Council on Social Work Education .

• The difference between these two accounting methods is the treatment of accruals.
• As technological development, as well as economic or industrial development, has emerged it enhances the scope of accounting in the new business era.
• The results of all financial transactions that occur during an accounting period are summarized in the balance sheet, income statement, and cash flow statement.
• The rules surrounding fiduciary accounting vary from state to state and even county to county.
• CPAs may also specialize in certain fields, such as forensic accounting .

This is if a company is looking to finance a new purchase or venture. The IRS requires that businesses use one accounting system and stick to it . Whether they use the cash or accrual method determines when they report revenue and expenses. In this type of accounting, all records and reports are made according to regulations established by the tax authorities. A government accountant may work in state or federal programs such as housing, education or healthcare. Government accounting, also known as public accounting, handles any state and federal fund allocation and disbursement.

The Accounting Cycle

Accounting information systems are designed to support accounting functions and related activities. In most cases, accountants use generally accepted accounting principles when preparing financial statements in the U.S. GAAP is a set of standards and principles designed to improve the comparability and consistency of financial reporting across industries. Individuals interested in becoming a management accountant should study risk management, managerial accounting, cost accounting, auditing, corporate finance, taxation, and interpersonal communications. After completing a bachelor’s degree, individuals must then take and pass the certified management accountant exam. According to PayScale.com, the average salary for a management accounting is $59,405.

Individuals interested in becoming a financial advisor would want to study risk management, taxation, supply chain management, financial management, corporate finance, and managerial accounting. They may also be required to obtain specific licenses to work as a financial advisor. According to PayScale.com, the average salary of a financial advisor is $58,078. Auditors ensure that organizations are correctly recording their financial information. Many industries require that organizations operating within them perform at least one external audit, conducted by someone who is not an employee, each year. Auditors review financial statements, account books, accounting systems, and fiscal records to ensure that the business is complying with all applicable financial regulations.

A forensic accountant’s daily responsibilities can vary by organization, but they typically involve analyzing complex financial data to uncover potential wrongdoing. In these instances, forensic accountants are the professionals who take a deeper dive into a person’s or group’s financial background to determine whether a crime has taken place. “Forensic accountants are trained to look beyond the numbers and deal with the business reality of a situation,” Investopedia notes. Managerial accounting often includes creating conservative, realistic and optimistic projections.

The number of existing accountant types varies depending on who is asked and what sources are consulted. While some accountants focus on the preparation and filing of taxes, others specialize in such areas as forensics, government, auditing, international accounting or investments. To help businesses maintain different types of accounting healthy supply chains, cost accountants must understand effective inventory management, including inventory control and costing. In addition, cost accountants often collaborate with business leaders to identify ways to improve operational efficiency and their analysis helps inform product pricing decisions.

Bachelor’s

If the project accountant plans to open their own business, they will also benefit from taking courses related to running a business. According to PayScale.com, the average salary of a project accountant is $56,857. A staff accountant is a great option for anyone who has a bachelor’s degree in accounting and who wants a variety of work. Staff accountants generally report to a CPA, creating financial reports and analyzing financial data. Depending on the size of the organization, a staff accountant may also be tasked with both accounts payable and accounts receivable management, creating a budget, and reconciling bank accounts.

A typical MBA requires at least two years of study, but many schools now offer accelerated programs that last just months. These degrees usually require credits, and courses often last 7-8 weeks each. Courses can draw from diverse areas such as marketing, leadership, public policy, and operations management.

Ohio University has a long-standing reputation for excellence based on the quality of its programs, faculty and alumni. If you are a professional who strives to align with one of the best, you need look no further than the esteemed on-campus and online programs offered at Ohio University. If you possess the basic aptitude required for an accounting position, choosing a career in the field may open a host of possibilities for you and enable you to customize a career to fit your preferences. Management accounting focuses on identifying, measuring, analysing, interpreting, and communicating important financial information to the higher ups. It looks at both past and present data to have a forecast of the business. Modified cash-basis and accrual accounting use the same accounts, which are advanced accounts such as AP and long-term liabilities.

• MBA programs often appeal to prospective students who already hold expertise in finance and accounting.
• Organizations in individual countries may issue accounting standards unique to the countries.
• Those in the forensic accounting field are involved in the reconstruction of financial information when a complete set of financial records is not available.
• Any tax accountant working with a diverse clientele should demonstrate top-notch communication and listening skills.
• At the corporate level, AP refers to short-term debt payments due to suppliers.
• While having a strong handle on your business’s finances is important, the methods you use to track your expenses and income may differ from how other small businesses conduct their accounting.