1.

Financial Accounting

Financial accounting involves recording and classifying business transactions, and preparing and
presenting financial statements to be used by internal and external users.

In the preparation of financial statements, strict compliance with generally accepted accounting

2. Managerial Accounting

Managerial or management accounting focuses on providing information for use by internal users, the
management. This branch deals with the needs of the management rather than strict compliance with
generally accepted accounting principles.

Managerial accounting involves financial analysis, budgeting and forecasting, cost analysis, evaluation of
business decisions, and similar areas.

3. Cost Accounting

Sometimes considered as a subset of management accounting, cost accounting refers to the recording,
presentation, and analysis of manufacturing costs. Cost accounting is very useful in manufacturing
businesses since they have the most complicated costing process.

Cost accountants also analyze actual and standard costs to help managers determine future courses of
action regarding the company's operations.

4. Auditing

External auditing refers to the examination of financial statements by an independent party with the
purpose of expressing an opinion as to fairness of presentation and compliance with GAAP. Internal
auditing focuses on evaluating the adequacy of a company's internal control structure by testing
segregation of duties, policies and procedures, degrees of authorization, and other controls
implemented by management.

5. Tax Accounting

Tax accounting helps clients follow rules set by tax authorities. It includes tax planning and preparation
of tax returns. It also involves determination of income tax and other taxes, tax advisory services such as
ways to minimize taxes legally, evaluation of the consequences of tax decisions, and other tax-related
matters.

6. Accounting Information Systems

Accounting information systems (AIS) involves the development, installation, implementation, and
monitoring of accounting procedures and systems used in the accounting process. It includes the
employment of business forms, accounting personnel direction, and software management.

7. Fiduciary Accounting
Fiduciary accounting involves handling of accounts managed by a person entrusted with the custody and
management of property of or for the benefit of another person. Examples of fiduciary accounting
include trust accounting, receivership, and estate accounting.

8. Forensic Accounting

Forensic accounting involves court and litigation cases, fraud investigation, claims and dispute
resolution, and other areas that involve legal matters. This is one of the popular trends in accounting
today.

Source: http://www.accountingverse.com/accounting-basics/types-of-accounting.html

Branches of Accounting

Financial Accounting
Financial Accounting is based on a systematic method of recording transactions of any business
according to the accounting principles. It is the original form of the accounting process. The main
purpose of financial accounting is to calculate the profit or loss of a business during a period and to
provide an accurate picture of the financial position of the business as on a particular date. The Trial
Balances, Profit & Loss Accounts and Balance Sheets of a company are based on an application of
financial accounting. These are used by creditors, banks and financial institutions to assess the financial
status of the company. Further, taxation authorities are able to calculate the tax based on these records
only.

Cost Accounting
Cost accounting deals with evaluating the cost of a product or service offered. It calculates the cost by
considering all factors that contribute to the production of the output, both manufacturing and
administrative factors. The objective of cost accounting is to help the management in fixing the prices
and controlling the cost of production. It also pin points any wastages, leakages and defects during
manufacturing and marketing processes.

Management Accounting
This branch of accounting provides information to management for better administration of the
business. It helps in making important decisions and controlling of various activities of the business. The
management is able to take decisions efficiently with the help of various Management Information
Systems such as Budgets, Projected Cash Flow and Fund Flow Statements, Variance Analysis reports,
Cost-Volume-Profit Analysis reports, Break-Even-Point calculation, etc.

Auditing is a branch of accounting where an external certified public accountant known as Auditor
inspects and certifies the accounts of a business for their accuracy and consistency. Sometimes internal
auditing is also practiced where an employee of the same company audits the accounts on the regular
basis and aids the management in keeping accurate records for audit purpose.

Tax Accounting deals with taxation matters. Its functions include preparation and filing of various tax
returns and dealing with their legal implications. Tax accountants aid in minimizing tax payments and
also help financial accountants in preparing financials for tax reporting to various authorities. Tax
accounting involves consultancy regarding the effect of taxes on different aspects of business,
minimizing tax through legal ways and also verifying consequences of tax payable on business.

Fund Accounting deals with keeping records for funds of non-profit business entities. Separate fund
accounts are maintained for separate works like welfare schemes of different nature to ensure proper
utilization of funds.

Government Accounting is done for Central Government (National Government) and State Government
budget allocations and utilizations. Keeping records ensures proper and efficient utilization of the
various budget allocations and safety of public funds.

Forensic Accounting also known as legal accounting enables calculating damages or settling disputes in
legal matters. Investigations are done and calculations are carried out to evaluate the damages
accurately.

Fiduciary Accounting is the accounting and evaluation of a third party’s business and property
maintained under the guardianship of another person

Source: https://efinancemanagement.com/financial-accounting/branches-of-accounting

4 Main Areas of Accounting and Finance

1. Public Accounting – Work for a CPA Firm charging clients for your services

 Audit – Audit clients on a regular cycle, render advice on internal control and accounting
practices and procedures
 Tax – Prepare tax returns, render tax advice
 Forensic – Investigate potential fraud and embezzlement, make recommendations for
prevention
 IT and Systems Audit – Evaluate controls and work-flows in systems

2. Corporate Accounting – Work for a company in their accounting department

 Audit and Compliance – Internal audit, SOX, and other compliance roles
 Financial Accounting – Month, Quarter, Year-end journal entries, reconciliations,
sometimes financial statement preparation and analysis
 Management Accounting – BI, Budgeting, forecasting, financial statement preparation
and analysis

3. Corporate Finance – Work for a company in the accounting or finance department

 Treasury – Manage banking relationships, debt compliance, bank transaction work-flows

4. Investment Banking – Work for an investment banking firm who charges for services

 Manage money – Work for a money manager, hedge fund, or investment bank managing
investments
 Merger and acquisition (M&A), IPO – Help companies buy each other or go public
 Private Equity – Find established companies to buy and own as investments
 Venture Capital – Find start-up ventures to fund as investments

Source: http://theconstantanalyst.com/blog/2012/07/the-4-main-areas-of-accounting-and-finance