The profession of accounting includes many different job settings. The main fields for accounting include public, private, and government accounting. Public accountants work on a fee for service basis, either independently or as a member of an accounting firm. They are then hired by individuals or businesses for the purposes of preparing financial statements, auditing, tax preparation, and investigations. (1) Private accountants are employed by companies, for which they develop and maintain the financial records. (1) Government accountants are federal or state governmental employees whose jobs include keeping the financial records of governmental agencies as well as audits of private companies. In the federal government they may be employed as bank examiners, IRS agents, or investigators in addition to more traditional accounting positions. (1)
In the simplest terms, the role of the accountant is to keep track of the financial situation of a company, with the two most basic concerns being the solvency (the ability of a company to pay its employees and other costs of operation) and the profitability. (2) To remain in business a company must be able to pay its payroll and its bills- this has to do with making sure the business has adequate cash on hand at any time to pay the expenses required for ongoing operation. The main goal of most businesses is to make money- so the accountant’s role includes analysis of business activities from the point of view as to how they contribute to the ability of the company to show a profit.
In keeping track of the financial status of a company, the fundamental equation of accounting is Assets = Liabilities + Equity This equation can be understood in several ways. The simplest interpretation is that the value of a company is represented by the difference between what things of value it possesses (the equity) and what it owes (is liable for). Equities include cash, money owed to the...
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