Accountancy

Accountancy (British English) or accounting (American English) is the measurement, disclosure or provision of assurance about information that helps managers and other decision makers make resource allocation decisions. Financial accounting is one branch of accounting and historically has involved processes by which financial information about a business is recorded, classified, summarized, interpreted, and communicated. Auditing, a related but separate discipline, is the process whereby an independent auditor examines an organization's financial statements in order to express an opinion -- that conveys reasonable but not absolute assurance -- as to the fairness and adherence to generally accepted accounting principles, in all material respects.

Related Topics:
British English - American English - Financial accounting - Auditing

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Practitioners of accountancy are known as accountants. Officially licensed accountants are recognized by titles such as Chartered Accountant (UK), Certified Public Accountant (US), or Certified General Accountant (Canada). (the majority of "public" accountants in Canada are Chartered Accountants; however, Certified General Accountants are also authorized by legislations to practise public accounting and auditing in all Canadian provinces, except Quebec as of 2005).

Related Topics:
License - Chartered Accountant - Certified Public Accountant - Certified General Accountant

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Accountancy attempts to create accurate financial reports that are useful to managers, regulators, and other stakeholders such as shareholders, creditors, or owners. The day-to-day record-keeping involved in this process is known as bookkeeping.

Related Topics:
Financial reports - Stakeholder - Shareholder - Creditor

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At the heart of modern financial accounting is the double-entry book-keeping system.

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This system involves making at least two entries for every transaction: a debit in one account, and a corresponding credit in another account. The sum of all debits should always equal the sum of all credits. This provides an easy way to check for errors. This system was first used in medieval Europe, although claims have been made that the system dates back to Ancient Greece.

Related Topics:
Europe - Ancient Greece

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According to critics of standard accounting practices, it has changed little since. Accounting reform measures of some kind have been taken in each generation to attempt to keep bookkeeping relevant to capital assets or production capacity. However, these have not changed the basic principles, which are supposed to be independent of economics as such.

Related Topics:
Standard accounting practices - Accounting reform - Economics

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