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What are the types of accounting?

What are the most prominent types of accounting and in which fields are they used?

Accounting is defined as the process in which business-related financial transactions are recorded. These transactions are summarized and analyzed to show the financial position and cash flows of the business. Accounting is used in most businesses, where it can be carried out by an accountant or financial departments, and these usually arise Reports using different flows within the various types of accounting, such as cost accounting and management accounting.
What are the types of accounting?
What are the types of accounting?

There are many types of accounting that a business can use in developing reports related to the company's financial transactions, and the following will explain the most prominent types of accounting:

Financial Accounting

Financial accounting is defined as the processes that are used to create financial statements, in which all a company's financial transactions are summarized in the balance sheet, income statement, and cash flow statement, and is usually used by publicly traded companies and lenders, financial accounting shows the company's financial performance for people outside The company is like investors, creditors, suppliers, and customers.

accounting administration

Management accounting is the accounting that uses the same data that financial accounting uses, but it is based on organizing information and using it in different ways. Monthly or quarterly reports are created that companies use in order to make decisions related to the company’s business, such as budgeting and forecasting.

Managerial accounting is used in the planning and implementation of corporate operations, as it is used in many businesses, such as commerce, manufacturing, service industries, and other companies that need planning or budgeting.

tax accounting

Tax accounting is defined as the rules that are used to generate assets and know the tax liabilities that exist in the accounting records, and are used during the current year in order to recognize tax liabilities for the same year, or used for new years by calculating deferred tax liabilities.

Tax accounting is a sub-sector. Accounting is used to deal with tax returns, is used by individuals to focus on income and deductions, and is used by businesses to pay tax returns.

criminal accounting

Forensic accounting is one of the types of accounting used by forensic accountants to detect the types of fraud in purchases and is used to describe the associations resulting from actual or expected disputes and lawsuits, as it is used to measure the economic loss and damage resulting from breach of contracts or breach of guarantees such as disputes related to the acquisition of companies.

Forensic accounting is used in two areas, the first area is litigation support in which the number of damages resulting from legal disputes and related to existing or pending cases is determined, and the second area is an investigation, in which the presence of criminal issues is determined, such as employee theft or paper fraud Finance.

Cost accounting

Cost accounting helps to make cost-related decisions, as all costs associated with producing a specific product are calculated, and cost accounting is usually used by: analysts, managers, business owners.

Although cost accounting is one of the sources of financial data. However, it does not directly contribute to the creation of the financial statements but rather works on examining the cost of business and evaluating the efficiency of its use.

audit accounting

The emergence of audit accounting coincided with the emergence of large businesses, as these businesses needed to separate ownership from administrative control, as audit accounting is concerned with examining the facilities’ records and reports by specialists who differ from those who prepare them, as their task is to present the financial position and operational results of the company in addition to the Ensure that these statements comply with generally accepted accounting principles.

Audit accounting is usually used by employees of companies responsible for internal auditing, and external organizations conduct an external audit to determine the presence of any errors in the company’s financial statements, and the government conducts a government audit to ensure that the financial statements are prepared accurately, especially the value of income subject to for tax.

Funds Accounting

Fund accounting is a system used by non-profit organizations, as the goal is to keep track of the cash itself and not to track the profit generated from it. Fund accounting focuses on accountability and not on profitability, and organizations that use fund accounting include charities, churches, universities, hospitals, nursing homes, and orphanages The types of funds in which fund accounting is used are divided into the following:
  • Governmental funds: which are used to calculate government activities, such as capital projects funds, debt service funds, public funds, permanent funds, special revenue funds, property funds.
  • Trust funds: which are used for the benefit of organizations, such as investment trust funds, private trust funds.

fiduciary accounting

Fiduciary accounting records all transactions that are related to a credit or real estate entity, and issues reports on the status of these entities. with guardianship.

public accounting

Public accounting is defined as a group of companies for accountants from large international companies and local and regional companies, which work to provide accounting services to clients, such as retail companies, manufacturers, service companies, individuals, non-profit organizations, and government organizations.

Accountants who provide public accounting services are usually certified accountants or chartered accountants, whose services are manifested in preparing, reviewing and auditing clients’ financial lists, preparing tax returns for them, providing advice and advice related to accounting systems and other accounting matters.

There are many areas in which accounting is used as it is used in the majority of businesses due to its importance in the analysis of financial statements, which helps in monitoring the businesses of companies.
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