Accounting is an evolving profession. It was earlier taught that accounting and accountants would go extinct due to new innovations, including artificial intelligence. Yes, this tech system reduces the time spent on the job and removes the need for many employees, but this doesn't extinguish the profession.
In modern days, accounting has become something else. New technology inventions and funding types have increased the responsibilities of accountants. Yes, the finance gatekeeping profession has more work to do than people have ever imagined! This article discussed the types of accounting and accountants in detail.
Types of accounting
This can be divided into traditional and modern accounting.
Traditional accounting
These are legacy accounting. Accounting is an evolving profession. From its invention, accounting has gone beyond reporting numbers. Traditional accountants focus on the numbers.
They are:
Financial accountant: They handle the daily business transactions and prepare financial reports.
Cost and management accountant: These provide cost data analysis that helps management in decision-making.
Public sector accountant: Government accountants work with MDAs. They can be costs, financial, tax or auditors.
Tax accountant: Tax professionals who ensure compliance with tax laws while helping companies avoid taxes legally.
Auditing: Examines company financials and processes. They provide reports relating to the true and fair view of the company, its financial statements or processes.
Fund accountant: Non-profit entities have fund accountants as employees. They prepare financial reports without the profit-making objectives.
Modern accounting
Accountants who go beyond the numbers are modern accountants. They tell stories behind the figures. They are strategic accountants and finance professionals. Modern-day users of accounting information do not want the bulkiness of financial reports.
Modern accountants have tried to bridge this gap. They provide a summary of the financial statements on a single page using charts and tables. This highlights key areas that can help users make informed decisions.
Accounting has evolved into other areas to ensure proper gatekeeping of business finances. These areas include financial analysis, sustainability, corporate governance, IT auditing, forensic, and risk management.
Financial analyst: This is the accountant who goes beyond the financial accounting role. They analyse financial statements to help users understand them.
Sustainability accounting: Investors who accept annual reports also want companies to provide information on the entities' environmental impacts. Therefore, there is a call for accountants to prepare and present sustainability reports.
Corporate Governance: A company's corporate governance is the responsibility of the finance manager and external auditors. These individuals ensure that corporate entities comply with international best practices in corporate governance.
Risk managers: Modern accounting is risk management. This is a broad professional. Risk managers manage an organisation's risks, including financial and non-financial risk areas. One non-financial area is sustainability risks.
IT Auditing: They examine Information Technology procedures and give an independent review of those processes.
Forensic auditor: Forensic auditors detect fraud rather than provide an opinion on financial statements.
To conclude, accounting has evolved with time. While legacy accounting practices are fading away, modern-day accountants must unlearn and relearn.