Branches of Accounting

Learning objective:
At the end of this lesson, we should be able

to:
a. Enumerate the branches of accounting

b. Define each branch
c. Discuss the kind of services rendered in
each branch of accounting
● Who among you wants to be an accountant
someday?
● What kind of accountant do you want to be?
● Where do you want to work? In public or
private institutions?
● What do you think are the different services
offered by accountants in different institutions?
The several branches of accounting are
grouped into specialized areas such as:
1. Public accounting
2. Private accounting
1. Financial Accounting
2. Management Accounting
3. Government Accounting
4. Auditing
5. Tax Accounting
6. Cost Accounting
7. Accounting Education
In Public accounting, the accountant performs or
offers to perform any activity that will result to the
issuance of an attest report that is in accordance
with professional standards. Such activities include
consulting services, personal financial planning
services. The preparation of tax returns, and advice
on tax matters for fee. Usually, a public accountant
works in a firm offering its services to various
clients. Certified Public Accountants (CPAs) refer to
those who had passed the licensure examination for
accountants.
Examples of public accounting services:
1. External auditing, public accountants examine
the financial statements in order to express an
opinion on whether statements have been fairly
presented or not. The auditor critically examines
the accounting records of the client to check if
business transactions have been properly
recorded. The auditor then issues an independent
audit report of his or her findings.
2. Tax preparation and Planning Service
Some Certified Public Accountants (CPAs) also
offers tax services wherein they advise and help
their clients in tax planning and preparing tax
returns. In this branch of public accounting, the
accountant is a tax specialist. He or she is
expected to be knowledgeable about revenue
regulations and tax laws. He or she also represents
the client in any tax-related case filed by the BIR.
3. Management Advisory Services
Management consulting is an area in public
accounting that involves financial planning and
control, and the development of accounting and
computer systems. The accountant advises
management on matters such as the installation of
an accounting system, finance, budgeting,
business processes, introduction of new products,
and other business activities.
PRIVATE ACCOUNTING
Private accounting involves setting up
systems of recording business transactions
that are aggregated into financial statements.
It includes the development and
interpretation of accounting information
intended to assist management in operating
the business
A private accountant is a salaried
employee who deals with the company’s
day-to-day accounting needs. He/she is
trained in the processing of accounting
transactions such as billings and accounts
payables. His or her knowledge may be
limited to the areas of accounting for which
they are responsible.
The branches of accounting under private accounting are as follows:
Financial accounting this the broadest branch and is focused

on the needs of external (outside)users and is primarily
concerned with processing historical data. This branch of
accounting provides economic and financial information for
investors, creditors, and other external users. It uses a system
of reporting designed to meet the information needs of
external users. Financial accounting governed by an
established body of standards and principles. It focuses on the
recording and classifying of business transactions while
applying generally accepted accounting principles (GAAP)
Financial Accounting ends in the
preparation and presentation of general
purpose financial statements. These
documents should show the business
financial position, operating results, and cash
activities. It is also best to includes
supporting explanatory notes to these
financial statements to further explain its
report of findings.
Cost Accounting focuses on accumulating
manufacturing costs for financial reporting and
decision-making purposes. It covers the reporting
of financial information relevant to manufacturing
operations. It provides management with the
necessary tools and information for planning and
controlling activities. The primary role of a cost
accountant is to determine the inventory cost for
financial reporting purposes.
Budgeting provides a detailed collection and
reporting of the expenditures and revenues
involved in a business or company operations.
This branch of private accounting tracks the
financial details of the firm, including the money
taken in and the money spent by the company and
the staff. It also assist the management in
quantifying goals concerning revenue, cost of
sales or services, and operating expenses
Accounting Information System –
collects process transaction data. It
also disseminates information to
interested parties. It involves the
designing of both manual and
computerized data processing
systems.
Tax accounting it deals with the
preparation of various tax returns
and doing tax planning for the
business. This is similar to the tax
services done in public
accounting.
Internal auditing – This branch of
private accounting reviews the business
operations to check if they are complying
to management policies. It also evaluates
the efficiency of business operations.
Normally, an internal auditor is hired
employee of a company
Government Accounting – is a system
used in government offices to record and
report financial transactions. It is the
systematic process or collecting, recording,
classifying and summarizing, and
interpreting financial transactions relating
to the revenues and expenditures of the
government
CPA’s are needed in all levels of government.
He or she could be a provincial accountant, a
Commission on Audit (COA) auditor to various
government agencies, a BIR examiner to local
and national businesses, a budget officer of the
Dea[partment of Budget and Mgmt., or a bank
examiner of Bangko Central ng Pilipinas
Governmental accounting is
the managing and budgeting of
public revenue. It accounts for
activities, programs, and other
liabilities. The government is
accountable to its citizens and
taxpayers.
What does a tax accountant do?
1. Ensuring the accuracy of financial documents, as
well as their compliance with relevant laws and
regulations.
2. Preparing and maintaining important financial
reports
3. Preparing tax returns and ensuring that taxes are
paid properly and on time
Accounting education – This branch of accounting is
responsible for training future accountants, It engages in
teaching accounting, financial management, taxation, and
other related business course. As per (CHED)
Memorandum Order (CMO) No. 3 series 2007, a CPA in
accounting education should posses the educational
qualifications, professional experience, classroom teaching
ability, computer literacy, scholarly research productivity,
and other attributes that are essential for the successful
conduct of a professional accounting program
CPA’s are encouraged to be part of the
academe and become an integral force
in inspiring learners pursue a career in
accounting. Accounting educators
could be teachers, administrators, or
researchers.
Accounting research, though a separate
discipline, usually falls under this branch.
Accounting research is broader in scope
and wider in coverage. It compasses
research interest in the areas of financial
accounting, management accounting,
auditing and taxation, among others

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Learning objective:

At the end of this lesson, we should be able

a. Enumerate the branches of accounting

Financial accounting this the broadest branch and is focused

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