Accountancy is the process of communicating financial information about a business entity to users such as shareholders and managers. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in selecting the information that is relevant to the user and is reliable. The principles of accountancy are applied to business entities in three divisions of practical art, named accounting, bookkeeping, and auditing.
Accountancy is defined by the Oxford English Dictionary (OED) as "the profession or duties of an accountant".
Accounting is defined by the American Institute of Certified Public Accountants (AICPA) as "the art of recording, classifying, and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of financial character, and interpreting the results thereof."
Accounting is thousands of years old; the earliest accounting records, which date back more than 7,000 years, were found in Mesopotamia (Assyrians). The people of that time relied on primitive accounting methods to record the growth of crops and herds. Accounting evolved, improving over the years and advancing as business advanced.
Early accounts served mainly to assist the memory of the businessperson and the audience for the account was the proprietor or record keeper alone. Cruder forms of accounting were inadequate for the problems created by a business entity involving multiple investors, so double-entry bookkeeping first emerged in northern Italy in the 14th century, where trading ventures began to require more capital than a single individual was able to invest. The development of joint stock companies created wider audiences for accounts, as investors without firsthand knowledge of their operations relied on accounts to provide the requisite information. This development resulted in a split of accounting systems for internal (i.e. management accounting) and external (i.e. financial accounting) purposes, and subsequently also in accounting and disclosure regulations and a growing need for independent attestation of external accounts by auditors.
Today, accounting is called "the language of business" because it is the vehicle for reporting financial information about a business entity to many different groups of people. Accounting that concentrates on reporting to people inside the business entity is called management accounting and is used to provide information to employees, managers, owner-managers and auditors. Management accounting is concerned primarily with providing a basis for making management or operating decisions. Accounting that provides information to people outside the business entity is called financial accounting and provides information to present and potential shareholders, creditors such as banks or vendors, financial analysts, economists, and government agencies. Because these users have different needs, the presentation of financial accounts is very structured and subject to many more rules than management accounting. The body of rules that governs financial accounting in a given jurisdiction is called Generally Accepted Accounting Principles, or GAAP. Other rules include International Financial Reporting Standards, or IFRS, or US GAAP.
Matching Accounting Colleges
University of Phoenix-Online Campus
Four or more years; Private for profit; $10,716 average out-state tuition; $10,716 average in-state tuition
University of Illinois at Urbana-Champaign
Four or more years; Public; $27,219 average out-state tuition; $11,847 average in-state tuition
CUNY Bernard M Baruch College
Four or more years; Public; $11,040 average out-state tuition; $5,130 average in-state tuition
Kaplan University-Davenport Campus
Four or more years; Private for profit; $14,854 average out-state tuition; $14,854 average in-state tuition
The University of Texas at Dallas
Four or more years; Public; $24,166 average out-state tuition; $10,276 average in-state tuition
The University of Texas at Austin
Four or more years; Public; $32,506 average out-state tuition; $9,794 average in-state tuition
University of Houston
Four or more years; Public; $12,685 average out-state tuition; $5,173 average in-state tuition
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Accounting Related Majors
- Accounting Technician and Bookkeeper
- Accounting and Business/Management
- Accounting and Finance
- Business Administration and Management
- Marketing/Marketing Management
- Management Information Systems
- Human Resources Management/Personnel Administration
- International Business/Trade/Commerce
- Hospitality Administration/Management
- Administrative Assistant and Secretarial Science
- Fashion Merchandising
- Organizational Behavior Studies
- Business/Managerial Economics
- Office Management and Supervision
- Operations Management and Supervision
- Management Science
- Hotel/Motel Administration/Management