Accounting

Accounting, also asked as accountancy, is a measurement, processing, as living as communication of financial and not financial information approximately economic entities such(a) as businesses and corporations. Accounting, which has been called the "language of business", measures the results of an organization's economic activities and conveys this information to a kind of stakeholders, including investors, creditors, management, and regulators. Practitioners of accounting are so-called as accountants. The terms "accounting" and "financial reporting" are often used as synonyms.

Accounting can be divided up into several fields including financial accounting, management accounting, tax accounting and cost accounting. Financial accounting focuses on the reporting of an organization's financial information, including the preparation of financial statements, to the external users of the information, such(a) as investors, regulators and suppliers; and supervision accounting focuses on the measurement, analysis and reporting of information for internal usage by management. The recording of financial transactions, so that summaries of the financials may be submitted in financial reports, is known as bookkeeping, of which double-entry bookkeeping is the almost common system. Accounting information systems are designed to support accounting functions and related activities.

Accounting has existed in various forms and levels of sophistication throughout human history. The double-entry accounting system in usage today was developed in medieval Europe, particularly in such(a) as standard-setters, accounting firms and professional bodies. Financial statements are ordinarily audited by accounting firms, and are prepared in accordance with generally accepted accounting principles GAAP. GAAP is quality by various standard-setting organizations such as the Financial Accounting requirements Board FASB in the United States and the Financial Reporting Council in the United Kingdom. As of 2012, "all major economies" form plans to converge towards or undertake the International Financial Reporting Standards IFRS.

Organizations

Professional accounting bodies increase the American Institute of Certified Public Accountants AICPA and the other 179 members of the International Federation of Accountants IFAC, including Institute of Chartered Accountants of Scotland ICAS, Institute of Chartered Accountants of Pakistan ICAP, CPA Australia, Institute of Chartered Accountants of India, Association of Chartered Certified Accountants ACCA and Institute of Chartered Accountants in England and Wales ICAEW. Some countries produce a single fine accounting body e.g. Brazil and, in some other countries, professionals bodies for subfields of the accounting professions also exist, for example the Chartered Institute of Management Accountants CIMA in the UK and Institute of management accountants in the United States. numerous of these professional bodies ad education and training including qualification and administration for various accounting designations, such as certified public accountant AICPA and chartered accountant.

Depending on its size, a company may be legally required to have their financial statements audited by a qualified auditor, and audits are ordinarily carried out by accounting firms.

Accounting firms grew in the United States and Europe in the gradual nineteenth and early twentieth century, and through several mergers there were large international accounting firms by the mid-twentieth century. Further large mergers in the slow twentieth century led to the rule of the auditing market by the "Big Five" accounting firms: demise of Arthur Andersen following the Enron scandal reduced the Big Five to the Big Four.

Generally accepted accounting principles GAAP are accounting standards issued by national regulatory bodies. In addition, the International Accounting Standards Board IASB issues the International Financial Reporting Standards IFRS implemented by 147 countries. Standards for international audit and assurance, ethics, education, and public sector accounting are all set by independent standard tables boards supported by IFAC. The International Auditing and Assurance Standards Board sets international standards for auditing, assurance, and quality control; the International Ethics Standards Board for Accountants IESBA sets the internationally appropriate principles-based Code of Ethics for Professional Accountants; the International Accounting Education Standards Board IAESB sets professional accounting education standards; and International Public Sector Accounting Standards Board IPSASB sets accrual-based international public sector accounting standards

Organizations in individual countries may issue accounting standards unique to the countries. For example, in the United States the Financial Accounting Standards Board FASB issues the Statements of Financial Accounting Standards, which form the basis of US GAAP, and in the United Kingdom the Financial Reporting Council FRC sets accounting standards. However, as of 2012 "all major economies" have plans to converge towards or follow the IFRS.