The Purpose of the Accounting Function within an Organisation

 

  1. Purpose and Scope of Accounting



The purpose of accounting is to record, measure, and communicate financial information about an organisation to various stakeholders such as internal (owners, employees, etc) and external (investors, customers, etc), it helps businesses manage their finances, measure performance, make informed decisions, and comply with regulatory requirements (Powell, 2020). 

The scope of accounting in organisations is broad and covers a range of activities, including financial accounting, managerial accounting, auditing, tax accounting, forensic accounting, and accounting information systems (Singh, 2020). 

  1. The Branches of Accounting



The branches of accounting can be broadly classified into two categories:

Financial accounting: This branch of accounting focuses on the preparation and presentation of financial statements for external users, such as investors, creditors, and regulatory bodies. Financial accounting involves the recording of financial transactions, preparation of financial statements, and compliance with accounting standards and regulations (Powell, 2020).

Management accounting: This branch of accounting focuses on the use of financial information to support management decision-making. Management accounting involves the preparation of internal reports, such as budgets, forecasts, and cost analysis, that are used by managers to make informed decisions about resource allocation, pricing, and other important aspects of the business (Powell, 2020).

  1. Job Skill for an Accountant

According to Gallagher (2022), to be successful in accounting, one must possess a range of job skill sets that include:

  • Attention to detail: Accountants must have a strong attention to detail and be able to accurately record and analyse financial transactions.

  • Analytical skills: Accountants must be able to analyse financial data and identify trends, patterns, and anomalies.

  • Communication skills: Accountants must be able to effectively communicate financial information to stakeholders, including managers, investors, and regulatory bodies.

  • Technical skills: Accountants must have a strong understanding of accounting principles and be able to use accounting software and systems effectively.

  • Ethical behaviour: Accountants must act with integrity and adhere to professional ethical standards.

  • Problem-solving skills: Accountants must be able to identify and resolve problems related to financial data and accounting systems.

  • Time management skills: Accountants must be able to manage their time effectively and prioritise tasks to meet deadlines.

Overall, accounting is a dynamic field that requires a broad range of skills and expertise. Successful accountants must possess a combination of technical, analytical, problem-solving, time management and communication skills, as well as strong ethical behaviour.



References

Powell, S. (2020), “Accounting”, Corporate Finance Institute, 11 August, available at: https://corporatefinanceinstitute.com/resources/accounting/accounting/ (accessed 4 April 2023).

Singh, M. (2020), “What is Accounting? Definition, Objectives, Scope, Need, Basics”, Investortonight, 31 August, available at: https://investortonight.com/blog/accounting/ (accessed 4 April 2023).

Gallagher, M. (2022), “The Accounting Skills You Need For A Successful Career”, Forbes, 31 August, available at: https://www.forbes.com/advisor/education/skills-for-accounting-career/ (accessed 4 April 2023).



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