Accountancy is discipline that measures different parameters of financial data, as well as the relationships between them, using a variety of techniques. It is also a means of disclosure of data, and helps managers and decision makers to take decisions about resource allocation.
There are various types of accounting branches. One of them and much important is financial accounting. In this type of accounting financial data of the particular business are recorded, processed, classified, summarized, analyzed, interpreted and various decisions are taken from that. Auditing is somewhat includable in accounting but it has its own disciplinary charm. In auditing the data recorded is analyzed and examined by the auditor who is a different person altogether than the person who wrote accounts and having integrity and independence to express the opinion for giving assurance on the financial data examined. Auditing is done to give reasonable assurance that the financial data gives true and fair view of business. Cost accounting is related more to the non-financial data like cost of material, labour and overheads.
Accounting results are helpful to many people like stakeholders, creditors, managers, financial institutions, regulators and also to the general public as a whole. The person who is engaged in keeping day to day books complete and proper is known as book-keeper. The person above him and responsible for all the activities relating to formulation of rules and controlling the procedure of accounting is known as Accountant. With the evolution of accounting discipline to the deeper level the knowledge of the persons associated with this field achieved higher levels. Different countries have named differently their accountants as CPA (Certified Public Accountant) in United States of America, CA (Chartered Accountant) in United Kingdom and India, CGA (Certified General Accountant) in Canada etc.
How it works
There are two types of bookkeeping systems. The older method is called the single entry system, and uses only one-sided accounts were kept. More common nowawadays is double-entry bookkeeping. In double entry book keeping system the two entries are made at the same time. One the debit and another the credit. The debits sums should always be equal to credit sums.
There are many developments in accounting field. There have been a series of reforms in Standard Accounting Practices. New branches have evolved from the traditional ones like human resource accounting, environmental accounting, energy accounting, management accounting, project accounting, positive accounting etc.