Just as a forensic scientist uses scientific tests to solve crimes, forensic accountants use accounting techniques.
In addition to the types of accountancy detailed above, there are many more accountancy fields to consider, for example:. Learn more about the skills needed to cultivate a career in accountancy by taking the Bright Network Academy core skills needed for accountancy module and stay ahead of the competition when it comes to applying for opportunities in this varied sector.
What types of accountancy are there… and which would suit you best? Audit Every year, companies have to produce an annual report which includes a statement of their accounts. Auditors go into a company as part of a team and perform checks on all different aspects of its finances.
They check that everything they inspect matches up with the information in the financial report. Then they write their own report giving their findings.
Financial accounting Financial accounting is what you might traditionally expect an accountant to do — keeping track of a company's financial transactions.
Their reports are used externally — by people outside the company, such as shareholders and potential investors. Management accountants provide the financial information that managers need to make business decisions — for example, reports on which business areas have been profitable.
This branch of accounting aides businesses be compliant with regulations set up by the IRS. Tax accounting also helps businesses figure out their income tax and other taxes and how to legally reduce their amount of tax owing. Tax accounting also analyzes tax-related business decisions and any other issues related to taxes.
This specialized accounting service is trending in accounting and is becoming increasingly popular. Forensic accounting focuses on legal affairs such as inquiry into fraud, legal cases and dispute and claims resolution. This could be to decode fraudulent data or convert a cash accounting system to accrual accounting. Forensic accountants are usually consultants who work on a project basis, according to Accounting Tools.
This branch of accounting centers around the management of property for another person or business. The fiduciary accountant manages any account and activities related to the administration and guardianship of property. These types are tax accounting, financial accounting and management accounting. Management accounting is useful to all types of businesses and tax accounting is required by the IRS.
Financial accounting is only relevant to larger companies. In this type of accounting, all records and reports are made according to regulations established by the tax authorities.
Small businesses can hire a tax accountant who specializes in making sure the accounting records are IRS-compliant and who transfers that information to the business tax return. The IRS requires that businesses use one accounting system and stick to it see below for an exception. Whether they use the cash or accrual method determines when they report revenue and expenses.
Financial accounting is performed with potential lenders and investors in mind, as well as GAAP generally accepted accounting principles. Larger businesses often employ accountants in-house to help them comply with these standard accounting principles. The focus here is on generating financial statements like budgets, product costings, cash flow projections and business acquisition analysis reports. Standard reports like balance sheets, profit and loss statements and cash flow statements are generated in a way to help managers analyze past decisions and plan for the future.
Small businesses may only use cash projections. Larger companies, especially manufacturers, will use many more reports. There are two types of accounting methods: cash and accrual. Usually, larger organizations will hire a tax accountant to navigate the complexities of financial records.
Related: 6 Essential Accounting Skills. Accounting information systems, or AIS, is the system by which a company collects, stores and processes its financial and accounting data. Many AIS are now built to integrate with other departments such as connecting the hiring process in Human Resources to the payroll function of a newly hired employee. This flow-through process helps minimize the manual entry of information.
AIS professionals manage the improvement of successful accounting procedures. Employees working in this field decide on the best times to install updated technology and monitor the progress of existing systems to determine if there is an increase in productivity over a given timeframe.
They can make decisions in conjunction with the IT department to instill continuity with technological processes. They also frequently assist with technical support in maintaining AIS, such as creating new accounts in the system or troubleshooting errors in the software. Forensic accounting is used to investigate the financial records of individuals or businesses.
It can require accountants to recreate financial information when some information is missing or not available to review. The goal of forensic accounting is to gather all available documentation and accurately and comprehensively account for all transactions in financial statements. These professionals often work on legal cases involving fraud, claims and disputes.
Public accounting refers to businesses that provide accounting advice to clients based on their needs. They can work in auditing, assist with tax returns, consult on procedures tailored to the installation of technology or computer programs and provide legal advice.
Related: Chartered Accountant vs. Governmental accountants manage the financial planning and allocation of resources to departments within a local, state or federal government. This type of accounting has standards that must comply with the Governmental Accounting Standards Board GASB , which is responsible for developing consistent accounting procedures for local and state governments.
Governmental accountants will also monitor a government's budget and allocate funds appropriately. Although these different types of accounting focus on different aspects of business or even different types of businesses, all of these fields:. Regardless of your job title, the standards that inform your reporting or who you work for, it is important for all accountants to be accurate in their work.
Here is a list of careers that accountants can pursue:. Primary duties: A staff accountant works under a Controller or Certified Public Accountant CPA to preserve and maintain financial records and budgets for an organization.
They often enter journal entries or data into the accounting information system or otherwise monitor the activity in the system for accuracy. Primary duties: A payroll accountant is responsible for carrying out compliance duties for the organization. They report all employee financial activities from the business to the local, state and federal government in addition to having the correct amount of taxes taken out of each employee's paycheck.
Primary duties: A tax accountant provides tax preparation advice to companies to file their taxes correctly and to potentially save money through the timing of their financial transactions. They make certain that a company is compliant with filing their federal, state and local taxes.
Primary duties: An auditor reviews financial documents to ensure their accuracy. An internal auditor may perform random or scheduled audits to ensure that internal policy is being followed and to make recommendations regarding policy.
An external auditor will be a CPA, who will generally do on-site, scheduled audits following an audit plan. Primary duties: A financial accountant ensures that financial transactions are accurately recorded and reported.
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