Accounting is basically a term that can also be referred to as accountancy, and it is described as the processing, communication and the measurement of financial details and information about the various economic entities. The federal agencies, hospital, municipalities, business companies, and corporations are just some of the examples of the economic entities. Accountancy basically measures that results or outcomes of the economic activities of an organization, and it typically brings or conveys these details or information to different users, such as creditors, management, creditors, and regulators, and it is also considered as the language of business. The various fields of accountancy include the cost accounting, the tax accounting, the financial accounting, the external auditing, and the management accounting.
The ones who practices accounting are called as accountants. Some of the common responsibilities and duties of the licensed or professional accountants include processing collections and invoice, processing payments, compiling and reviewing source documents that can support financial transactions, maintaining inventory records and assisting in the count of the inventory, filing tax returns and payment of the corresponding taxes through manual method or through the use of electronic devices, preparing tax returns, preparing statutory and some other reports, preparing financial reports and the supporting schedules, and recording financial transactions and preparing pertinent adjustments. It is typical for the professional accountants to work under an accounting firm alone or with their fellow accountants.
The companies that are composed of licensed accountants is called as the accounting firm, and they tend to specialize in the different accounting services. There are actually four types of accounting firms, namely the public accounting firm, the tax accounting firm, the forensic accounting firm, and the bookkeeping firms. The bookkeeping firms are described as small companies that are composed of few employees or staffs commonly called as bookkeepers, and such is designed and established to complete the fundamental or important accounting services and tasks to the business companies that are small or medium in size. The public accounting firm, on the other hand, is believed to employ certified public accountants or CPAs that may work in different areas of accountancy, such as audit consulting, tax consulting, and management consulting. It is typical for the tax accounting firm to focus more on preparing and planning the taxes of their clients, such as individuals and business companies in different sizes. The forensic accounting firm is said to use legal policies and accounting skills to uncover and solve any illegal activities and fraudulent activities by investigating financial records. The most common services offered by the accounting firms to the people or companies that hires them include payroll and sales taxes, business management, accounting assistance, bookkeeping, employee benefits consulting, general business consulting, budgeting and forecasting, business start-up consulting, financial assessment reports, general ledger review, financial statement preparation, income tax preparation and compliance, income tax planning and consulting, annual and quarterly financial reporting statements, implementation of new accounting software packages, and bill paying services.