What Is Accounting?
Accounting is the system of recording the company’s financial transactions. The accounting process includes summarizing, analyzing, verifying, and reporting these transactions to oversight agencies, regulatory authority, and tax planning. The financial statements used in accounting are summaries of financial transactions over an accounting period, summarizing a company’s operations, financial position, and cash flows.
TYPES OF ACCOUNTING
FINANCIAL ACCOUNTING is the systematic process used in generating interim and annual financial statements to show their financial performance to the shareholders and investing public. The entity’s financial transactions that occur over an accounting period are summarized into the balance sheet, income statement, statement of equity, and cash flow statement. The financial statements of most companies are audited annually by an external audit firm. For publicly traded companies, audits are one of the legal requirements. Also, lenders typically require the external audit results annually as part of their loan covenants. Most companies will undertake annual audits for several reasons.
MANAGERIAL ACCOUNTING organizes and utilizes information to a company’s management. In managerial accounting, monthly or quarterly reports are generated by the accountant from which the management team can rely on to make key decisions about how the business operates. Managerial accounting also encompasses other structures of accounting such as budgeting, forecasting, and various financial analysis tools. Essentially, any information that may be useful to management falls underneath this type of accounting.
COST ACCOUNTING helps businesses make key decisions about costing. Cost accounting considers all of the costs of production. For owners, analysts, managers, and accountants, cost accounting plays a vital role especially for manufacturing activities as it calculates product cost to help the company develop product pricing policies.
* In AL SAADI & ASSOCIATES AUDITING, We ensure that the financial statements are in conformance with International Financial Reporting Standards (IFRSs) and are committed to keeping the highest level of professional standards and quality, allowing key decision-makers to rely on management reports. By leveraging our optimum quality services, we can help to reduce costs for routine clerical or accounting processes and improve the efficiency of the year-end compliance process allowing you the time and resources to focus on the growth and development of the business as a whole.