Navigating Complexity: Core Accounting Branches, Skillsets, and the Evolving Scope of Financial Reporting

 What is Accounting?

- the act of analyzing financial data of the business form the business activities 

- the act of record-keeping the financial statement and the annual transaction 

- the act of transfering the financial information to the users through accounting reports 

(Crawford, 2023)

Accounting had a improtant role contributing the users make decisions through their giving financial informations. Therefore, it was also known as a term of business.   

(Price, 1998)

What is Accountant?

Accountant plays a role of measuring the financial statements, situation and handing the taxes

(Crawford, 2023)

Who uses Accounting data? 

There are two main types of users:

- Internal users: these group will be the person in the company called the mangement (owners, employees, managers,.. etc)

- External users: these group will not be the person in the company but still had the right to recieve the information from the organization (creditors, investors,.. etc)

(Sharma, 2023; Weetman, 2019, p. 14)

Function of Accouting  

Accouting system played a crucial role in proving financial information to the buinesses through tracking, analyzing and recording financial statement. Therefore, this system needed to:

- Procedure to verify expense legitimacy including debts

- Control the salary payments and other charges 

- Ensure all the information are correct and up-to-date to any users

- Protecting the organization assets 

(Aerts & Walton, 2020, p. 33)

What is the difference in branches of accounting?

There are two main position in accouting: Management Accounting,  Financial Accounting 

(Atrill & McLaney, 2017, p.11)

Financial Accounting

- Provide the accounting information to other users (external users)

- Comply on a regular when analyzing and giving the financial statements  

(Atrill & McLaney, 2017, p. 29)

Management Accounting 

- Provide the accounting information to managers' needs (internal users)

- Create both quatitative and qualitative information non-related to money

- Forecasting, planning, budgeting the financial data 

(Atrill & McLaney, 2017, p.11; Sharma, 2024)

(Qureshi, 2014)

 

Job skill sets of accounting 

Applying Accouting Software: using support application such as Beyond Excel for recording the financial information even when it changes in the future.

Selecting and reporting on Financial Statements: responsibilities include creating, tracking and reporting on balance sheets, income statements and cash flow statements.

Critical thinking: being carefully while analyzing and forecasting the financial statistics before providing to the users.

(Beagle & Gallagher, 2024)

Competencies of accounting 

Professional Knowledge: an accoutant need to known how to use accouting tool such as excel in order to save time and increase the accuracy.  

Having wide vision: an accoutant need to have wide insight through creating solutions combined with forecasting the risk. 

Communication skill: an accoutant take in charge transfer the financial information for the managers and other users, thereby this necessitates meticulous attention to clarity and accuracy in conveying financial data.

(Hohbein, 2017)

References

Aerts, W. and Walton, P. (2020) 'Chapter 2: Accounting and accountants' in Global financial accouting & reporting. 5th Ed. United Kingdom, Cengage Learning EMEA. pp. 31

Atrill, P. and McLaney, E. (2017) Accounting and Finance For Non-Specialists. 10th edn. United Kingdom, Pearson, pp. 11, 29.

Beagle, V. and M. Gallagher. (2024) The Accounting Skills You Need For A Successful Career, Forbes Advisor. Available at: https://www.forbes.com/advisor/education/business-and-marketing/skills-for-accounting-career/ (Accessed: 28 February 2024).

Crawford , H. (2023) What Is Accounting? Definition and Basics, Explained. Available at: https://www.nerdwallet.com/article/small-business/what-is-accounting (Accessed: 28 February 2024).

Hohbein, G. (2017) 10 competencies of top staff accountants vailable at:https://www.journalofaccountancy.com/newsletters/2017/feb/10-competencies-top-staff-accountants.html (Accessed: 28 February 2024)

Price, J., (1998) The Return of the Buffetteers, Investor Journal

Qureshi, S. (2014) Difference between Financial and Management Accounting, CommercePk. Available at: https://www.commercepk.com/difference-between-financial-and-management-accounting/ (Accessed: 28 February 2024).

Sharma, J. (2023) Different Types of Users of Accounting Information. Available at: https://www.shiksha.com/online-courses/articles/different-types-of-users-of-accounting-information/ (Accessed: 28 February 2024).

Sharma, J. (2024) Management Accounting: Definition, Techniques and Advantages, Shiksha online . Available at: https://www.shiksha.com/online-courses/articles/management-accounting-definition/ (Accessed: 28 February 2024).

Weetman, P. (2019) Financial and Management Accouting An Introduction. 8th edn. United Kingdom, Pearson, p. 14.



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