BRANCHES OF ACCOUNTING

Luca Bartolomeo de Pacioli

father of accounting

Summary of arithmetic, geometry, proportions and proportionality 

LBP published book about accounting

The Branches of Accounting

1. Financial Accounting

2. Managerial Accounting

3. Cost Accounting

4. Government Accounting

5. Auditing

6. Tax Accounting

7. Accounting Research

Financial Accounting

It is designed primarily for external stakeholders—such as investors, creditors, and regulators—to evaluate an organization's financial health

Management Accounting

- the process of identifying, analyzing, interpreting, and communicating financial and operational data to internal managers. It provides tailored insights for planning, budgeting, and decision-making to help a company achieve its strategic and financial goals

Cost Accounting

- a branch of managerial accounting that records, analyzes, and allocates all costs associated with production and services. It is used strictly for internal management to optimize efficiency, formulate pricing strategies, and maximize profitability.

Government Accounting

- systematic process of analyzing, recording, and reporting on financial transactions involving public funds and property. Unlike private business accounting, it prioritizes transparency, public accountability, and budgetary compliance over profit generation.

Auditing

- an independent, systematic examination of a company's records, processes, or financial statements. Its primary goal is to verify accuracy, ensure compliance with regulations, and provide stakeholders—like investors and regulators—with the confidence that reported information is reliable and free from frau

• Internal Auditing

• External Auditing

Two types of Auditing

Internal Auditing

- provides independent, objective insight that helps organizations improve how they operate. By evaluating risk, controls, and governance, internal auditors help organizations achieve their goals, protect value, and build trust.

External Auditing

- an independent examination of an organization's financial records and statements. Conducted by a certified third-party professional, it verifies if reporting is accurate, fair, and compliant with regulatory standards, assuring stakeholders that the financial position is truthful.

Tax Accounting

- focused on the preparation, analysis, and presentation of tax payments and returns. Its primary goal is to ensure compliance with tax laws while legally minimizing tax liabilities for individuals or corporations.

Accounting Research

- the systematic investigation of how accounting practices affect businesses, individuals, and markets.

Academic Accounting Research

- the systematic investigation of how accounting information impacts individuals, organizations, markets, and society. It bridges theory and practice by scrutinizing financial reporting, auditing, and management control systems to improve decision-making and standard-setting.

Economic Accounting Research

- It is the systematic process of recording, measuring, and reporting economic activities and transactions. By providing standardized data, it allows economists to track resource allocation, evaluate financial health, and analyze macroeconomic policies