Importance of Accounting in Business - 1

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Importance of Accounting in Business - 1

By | May 2012
Page 1 of 3
Importance of accounting in business
Accounting is so important within a business that it can help the users of accounting information to make better economic decisions in further operations . As we all know , accounting can be divided into two branches , one is known as financial accounting and the other is management accounting . Management accountants make reports for inside users , just as management levels while financial accountants make reports for outside users , such as owners , investors and the general public . There are also some distinctive features between them. Financial accounting is concerned with the provision of accounting information to owners and other external users who are not involved in the day-to-day running of the business. It has to obey legal requirements , financial accountants focus more on historic data and financial reports . Public can obtain these annual reports on the organization’s official internet or via other ways .However , management accounting is concerned with the position of accounting information to support the planning and control decisions made by managers. Management accountants pay more attention to the future , they forecast the future of organizations and support the managers to make plans for building their blueprint , these data and reports should be confidential , especially totally confidential to their competitors . Accounting contains how to collect and record economic data relating to a business enterprise , how to process this data to produce useful economic information ,how to communicate or report this accounting information to interested parties and interpret it for their benefit . These parts significantly show the importance of accounting during the business cycle ....