The main branches of accounting and job skillsets and competencies


When a company needs to know its financial situation, examine its cash flow, establish the health of its operations, or understand its competition, it usually looks to accounting. Small and medium-sized organizations may hire a single specialized accountant, but large corporations and governments may hire an accounting firm with various financial divisions to perform specific accounting tasks. Accounting branches adhere to a set of accounting standards established by organizations like the Financial Accounting Standards Board (FASB) in the United States. The generally accepted accounting principles (GAAP) are a set of concepts, practices, assumptions, and rules that accountants must follow. GAAP aims to clear up any ambiguity and promote uniformity and consistency in accounting operations. 

Examples of accounting titles 

  • Certified public accountant (CPA)
  • Certified management accountant (CMA)
  • Certified internal auditor (CIA)
  • Certified financial planner (CFP)
  • Certified information systems auditor (CISA)
Financial accounting includes keeping track of and clarifying company transactions, as well as preparing and presenting financial statements. Financial accounting adheres to GAAP standards and concentrates on historical data. A financial accountant, for example, would examine the previous quarter's financial data to provide recommendations for improvements in the following quarter. Financial accounting examines a company's balance sheet and creates profit and loss statements that provide guidance to management and stakeholders on loans, investments, and acquisitions (Indeed Career Guide, n.d.).

Financial accounting provides critical economic company data for the following purposes:

Creditors
Banks or financial institutions
Regulators
Suppliers
Tax professionals

Legal accounting, sometimes known as forensic accounting, deals with legal issues such as bankruptcy, fraud, and mismanagement. This division performs investigations for court and litigation matters, estimates damages, and supervises the resolution of disputes.

Forensic accounting serves:

  • Lawyers
  • Law enforcement
  • Insurance companies
  • Government organizations
  • Financial institutions (Indeed Career Guide, n.d.)



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