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Accountancy is the method of communicate financial information about a industry entity to user such as shareholders and manager. The communication is normally in the form of financial statement that shows in money conditions the financial income under the control of managing; the art lies in selecting the information that is relevant to the user and is reliable. The principles of accountancy are applied to industry entities in three division of practical art, name bookkeeping, accounting and auditing.
Today, accounting is called "the language of business" as it is the vehicle for reporting financial information about an industry entity to lots of similar groups of people. Office that concentrates on reporting to people in the business entity is called management accounting and is used to provide information to owner-managers, employees, managers and auditors. Management accounting is disturbed mainly with provide a basis for creation management or operating decisions. Accounting that provides information to people outside the business entity is called financial accounting and provides information to there and probable shareholders, creditors such as bank or economists, vendors, financial analysts, and government agency. Since these users have singular needs, the management of financial accounts is very set and subjects to many more convention than management accounting. The body of policy that governs financial accounting in a given control is called normally Accepted Accounting principle, or GAAP. |
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