The different branches of accounting in 2022

Posted on Dec 23, 2021 at 08:12 PM

Money is considered the key resource for business organizations. Even if there is any existence for the organization without it, it might not sustain for so long. Accounting at different branches adheres to facts and requires accuracy.  Because the needed achievements are different, there are different branches or specialties.

different branches of accounting are mentioned below to differentiate between them and to practice one of them throughout your career:

Financial accounting:

When you specialise in financial accounting, you’ll be probably concerned with financial analysis and watching the financial position of the organisation including; costs, liabilities and assets.

In addition, the issuance of public financial reports and financial statements, expressing the organization's progress during a certain period of time, are required when considering the historical financial statements, not the future ones. Besides, you have to master Financial Accounting and Reporting.

Issuance financial reports to the external stakeholders, such as; the government, investors and suppliers, should be clear and intelligible reports. Therefore, it is important to have a similar methodology to the organization's issuance reports. Thus, universally recognized standards are found to formulate the accounting. Financial accounting job titles include: financial analyst, finance accountant, controller, finance manager.

Managerial accounting:

Financial accounting is considered with submission of information and financial reports to the external stakeholders. However, managerial accounting is considered with submission of financial statements and reports to the internal stakeholders in a way that promotes growth and development for the organization. Particularly, this branch of accounting provides the employees and managers at different administrative levels with reports that will help them in decision making.

The managerial accountant is not only asked to represent the financial figures, but also, they should have a forward-looking view, so they can analyse the trends as that helps to predict. For instance, issuance reports on profitability trends of each product regarding all the non-financial aspects will facilitate the making decisions to identify what products marketing efforts should focus on more than others.

You can follow organization-specific accounting standards, not the international accounting standards, since you are not responsible for issuance reports to the external stakeholders.

Specialising in management accounting allows for contributing to take strategic decisions as one of the senior management boards of the organization; it may be business organization, non-profit organization or the government.

Management accounting job titles include: financial analyst, accounting manager, Budget analyst.

Cost accounting:

Cost accounting is usually considered as a branch of managerial accounting, since it is for calculating production costs of commodities through recording, analysing and reporting to be accessed on making decisions such as;

• Decisions for fixing the deviations between real costs, budget and standards set for achieving the organization objectives.
• The investment and expansion decisions regard to taking into consideration product compatibility and producing cost. So, based on the production or increase in the required production, there will be expectation of required resources and cost, including fixed costs and variable costs.

Audit:

The tasks of audit are systematically examining, evaluating and analysing the financial statements and the financial position of the organization.

Audit has an independent opinion to express on the validity of financial statements and the accounting entries, and the compatibility with the accounting standards that are required to follow.

Audit includes other sub-specialties such as internal and external audit, and information systems audit.

Training in accounting:

To improve your accounting skills no matter the branch, you should get trained.

There are specialized training courses for each branch of accounting, in addition to following the generally accepted accounting principles. Hence, the geographical space no longer hinders training and improving your skills, there are accounting training courses in Istanbul, London and Dubai and others.

For having different branches of accounting, it is hard to work on them all. So, it is better to start with a branch you want to specialize in, then to focus on the required skills for this branch. Therefore, getting trained will be the basis for your career development.