What is Accounting?

Answer:
Accounting usually refers to working with and scrutinizing the financial numbers of a business.

Not all accountants do the same thing. Accounting that is performed within a company is usually focused on recording the flow and assets of a company. These records result in many types of documents, including ledgers and financial statements.

Accountants that work within companies hold positions such as bookkeepers, financial analysts, controllers, etc. This function of keeping track of the numbers can also be outsourced to accountancy firms.

Accounting that is performed outside a company, or independent accounting, is usually focused on analyzing (i.e. auditing) those numbers. Independent accountants usually work in the context of firms who are contracted to analyze a business’s numbers.

A third type of accounting is forensic accounting, which is even more technical than the other two types. Forensic accounting is usually used in cases where there is a question about ethical practices, there is a legal proceeding, or there is a government inquiry. As its name indicates, forensic accounting is used to uncover underlying reasons for complex or convoluted transactions.

The word accounting is also used in the phrasing of “to give an accounting” for oneself, or to provide an explanation for the causes and reasons for one’s actions.