Accounting, or accountancy, is the measurement, processing and communication of financial information about economic entities. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a variety of users including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. Accounting can be divided into several fields including financial accounting, management accounting, auditing, and tax accounting. Accounting is facilitated by accounting organizations such as standard-setters, accounting firms and professional bodies. Financial statements are usually audited by accounting firms, Etymology
Both the words accounting and accountancy were in use in Great Britain by the mid-1800s, and are derived from the words accompting and accountantship used in the 18th century. In Middle English the verb "to account" had the form accounten, which was derived from the Old French word aconter, which is in turn related to the Vulgar Latin word computare, meaning "to reckon". The base of computare is putare, which "variously meant to prune, to purify, to correct an account, hence, to count or calculate, as well as to think." Accounting and accountancy
Accounting has variously been defined as the keeping or preparation of the financial records of an entity, the analysis, verification and reporting of such records and "the principles and procedures of accounting"; it also refers to the job of being an accountant. Accountancy refers to the occupation or profession of an accountant, particularly in British English. The early development of accounting dates back to ancient Mesopotamia, and is closely related to developments in writing, counting and money; and early auditing systems by the ancient Egyptians and Babylonians. Double-entry bookkeeping developed in medieval Europe, and accounting split into financial accounting and management accounting with the development of joint-stock companies. Accounting began to transition into an organized profession in the nineteenth century, with local professional bodies in England merging to form the Institute of Chartered Accountants in England and Wales in 1880. Topics
Accounting has several subfields or subject areas, including financial accounting, management accounting, auditing, taxation and accounting information systems. Financial accounting
Financial accounting focuses on the reporting of an organization's financial information to external users of the information, such as investors, regulators and suppliers. It measures and records business transactions and prepares financial statements for the external users in accordance with generally accepted accounting principles . GAAP, in turn, arises from the wide agreement between accounting theory and practice, and change over time to meet the needs of decision-makers. and in the context of accounting it is the "unbiased examination and evaluation of the financial statements of an organization". An audit of financial statements aims to express or disclaim an opinion on the financial statements. The auditor expresses an opinion on the fairness with which the financial statements presents the financial position, results of operations, and cash flows of an entity, in accordance with GAAP and "in all material respects". An auditor is also required to identify circumstances in which GAAP has not been consistently observed. Accounting information systems
An accounting information system is a part of an organisation's information system that focuses almost exclusively on processing quantitative data. Organizations
Professional accounting bodies include the American Institute of Certified Public Accountants and the other 179 members of the International Federation of Accountants, including CPA Australia, and Institute of Chartered Accountants in England and Wales ....
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