Accounting is one of the most important aspects of business. Accounting has become the " lingua franca" of business. It is practically impossible to conduct any type of business without using some form of accounting information. Companies use accounting information to determine their short and long-term goals, prepare, and review their operating budget, control expenses, and track sales and profits. All major corporations and small businesses have a need for some form of accounting and bookkeeping. If you're interested in a career with an accounting background, there are several programs that can help you gain this knowledge and start a successful career within the accounting profession.
A qualified accountant plays a fundamental part in an organization s financial survival. Managing financial accounting and bookkeeping tasks helps a company determine if their production levels are on track, their expenses are balanced, and if they are using all of the resources available to them for growth. Financial accounting and managerial accounting Ares two of the biggest branches of the accounting field; therefore, professionals seeking to pursue professional careers in this area need to distinguish the difference between managerial accounting vs. financial accounting. This article will discuss the differences between these two accounting practices and tips for entering into this lucrative field.
The public typically considers financial accounting reports and journals as a monotonous series of numbers and transactions. Therefore, a degree in this field is required to learn how to analyze financial reports and generate reports from them. Most professionals interested in entering into the field of accountancy require a bachelor's degree in business, accountancy, or taxation. This degree is one of the more difficult degrees to obtain, but it is possible to get a two-year degree in the field through community colleges or vocational schools.
Generally, the most popular forms of managerial accounting reports produced by businesses are profit and loss statements, cash flow analysis, and budget planning reports. Professors teach these courses because of their importance to businesses of all sizes. A business's long-term success depends upon accurately and effectively managing its finances. Therefore, management accounting professionals must be equipped with the knowledge needed to conduct sound financial information analysis in order to produce accurate financial information.
Businesses can choose to conduct their own or hire an outside firm to manage their finances. Most firms begin their own financial statements analysis and report by using a spreadsheet program like Numbers, Excel, or Quicken. In general, the first step toward producing financial statements is compiling all of a firm's financial statements and creating a data dictionary that defines terms used in the financial statements. In addition, an accountant analyzes the financial statements using standard accounting principles such as asset and liability analysis, income statement, balance sheet, and statement of cash flow along with other standard accounting practice to produce a firm's yearly financial statement.
After the accountant completes his or her financial reports, the accountant sends them to the IRS for review and audit. The audit team consists of certified public accountants (CPA), tax specialists, and auditors, along with their staff. The CPA reviews the accounting reports and makes any suggestions necessary to improve the accounting process or improve the accuracy of financial reports. The auditors look closely at the accuracy of internal control measures and prepare the Internal Revenue Service (IRS) forms that the accountant prepares for the IRS.
Accounting Professionals must meet specific educational requirements, such as an accounting major or a bachelor's degree. They must also pass the examinations required by the American Institute of Certified Public Accountants (AICPA) and the International Society of Professional Accountants (ISPA). These organizations generally accept only individuals who have attended a post-secondary education program, and those who have at least a bachelor's degree in accounting, business, or a similar field. The IRS also requires that individuals working in the accounting department be members of professional associations or other professional organizations recognized by the IRS. Members of these organizations generally receive a tax identification number (ITN).
The IRS performs audits on a periodic basis, usually at the end of a calendar year. Audits focus on internal control procedures, or the procedures that companies take to ensure the accuracy and quality of financial statements. Management accounting involves the supervision of an overall management system, and is the most senior position within an accounting organization. Supervisors are typically responsible for approving or rejecting requests for reports and documents; and for overseeing inventory, plant, and unit sales and distribution. Within the scope of the Management Accountant role, there may also be a Finance Lead, who reports directly to the Manager or a delegated Manager. Other general functions performed by the Manager are preparing the company's annual budget and financial information; collecting and preparing pay slips; and distributing company checks and money to employees, customers, and other entities.