Understanding an Accountants role

Choosing the right Accountant for your business!

An Introduction to Accounting
What is Accounting?
The Primary role of accounting is to provide reliable and relevant financial information for decision making. Accounting has been around for centuries and has developed significantly since its humble beginnings in ancient times when scribes recorded simple agreements between parties, and other information, on clay tablets. Today almost every person engages in business transactions in relation to the financial aspects of life such as purchasing products and paying bills. This means that accounting plays a significant part in society. 
Accounting is “The language of business. It is a public means of communication where information flows from one party to another. For information to be effective it must be understood. Accounting, like many other professions, has its own terminology or jargon which is unique to the profession and can have alternative meanings in different context. Accounting Terms, concepts and symbols are used to provide financial information to a variety of users including managers, shareholders and employees.
​The Accounting Process
Accounting is the process of identifying measuring, recording and communicating the economic transactions and events of a business operation.













Bookkeeping forms the foundation of the activities underlying accounting and these processes today extend far beyond preparing accounting records.
Diverse Roles of Accountants

• Commercial Accountants – Work in an industry and commerce, undertaking roles such as management accounting and financial accounting.
• Public Accountants – Provide their professional services to the public and work in a range of offices from small to multi-national. Auditing is a primary service as well as Taxation and advisory.
• Government Accountants – Employed by local councils, state government and federal government with a variety of roles, such as financial accounting and auditing.
• Not-for-profit Accountants – Work in the not for profit sector, engage in planning, decision making, preparing financial and management reports for both internal and external users.

Users of Financial Information
Internal Users of accounting information are Managers who plan, organise and run the business. They do not need to rely on general purpose financial reports as they can obtain the financial information they need internally. EG: Directors, Supervisors and Managers.
External Users are resource providers and have an interest in financial information about the three main types of activities, financing, investing and operating.
Accounting Areas

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• Financial Accounting has a historical focus, as it reports the results of operations to external parties. These reports must adhere to Generally Accepted Accounting Principles. This role is a compliance role and relies on the day to day information being processed accurately.
• Management Accounting has a different focus than financial accounting. The management accountant reports financial and non-financial information that helps managers make decisions that will help the company achieve its goals or implement its strategy. This role is an interlocking role with Strategy and day to day management,
• Audit accounting plays a key role in ensuring a company's accounts are accurate and finances are being distributed in the fairest or most efficient manner. ... Alternatively, audit accountants can be independent specialists who conduct external audits on company accounts.
• Tax accountants are the financial experts who understand all the government rules and regulations that determine the amount of money owed to federal, state or local agencies. 

With the understanding of what an accountant’s role is, and how we must comply with Tax legislation, is a Financial Accountant the only accountant you need, or from a visionary view, would an Management Accountant be the way to go? Consider your strategic plan and ensure that your structure within your business aligns with your 10-year financial plan in order to achieve your goals.