Branches of

Accounting
 Objectives:
● Will be able to differentiate branches of

accounting

● Will be able to explain the types of services

rendered on the different branches

 Branches of Accounting:
Financial Management Government
Accounting Accounting Accounting

Tax Cost
Auditing Accounting Accounting

Accounting Accounting
Education Research
 Branches of Accounting:

“Accounting is divided into several

branches to better serve the needs of
different users with varying information
needs. These branches sometimes overlap
and they are often closely intertwined.”
 Financial Accounting
Financial accounting is the broadest branch and is focused on
the needs of external users. Financial accounting is primarily
concerned with the recognition, measurement and
communication of economic activities. Financial accounting
conforms with accounting standards developed by standard-
setting bodies. In the Philippines, there is a Council created to
set these standards.
 Financial Accounting
Examples of these financial reports include:
 the balance sheet (statement of financial condition)
 income statement (the profit and loss statement, or P&L)
 statement of cash flows

Financial accounting is primarily concerned with processing

historical data. Although financial accounting generally meets the needs
of external users, internal users of accounting information also use these
information for their decision-making needs.
 Management (or Managerial)
Accounting
Management accounting focuses on preparing and analyzing
accounting information within an organization, with the goal
of providing timely and relevant information to internal
users, such as managers and employees, to support their
decision-making. This information is typically sensitive and
not shared with external parties.
 Management (or Managerial)
Accounting
for example, prices, plans to open up branches, customer
list, etc. Managerial accounting involves financial analysis,
budgeting and forecasting, cost analysis, evaluation of
business decisions, and similar areas.
 Government Accounting
Government accounting is the process of recording, analyzing,
classifying, summarizing, communicating and interpreting
financial information about the government in aggregate and in
detail reflecting transactions and other economic events
involving the receipt, spending, transfer, usability and
disposition of assets and liabilities. This branch of accounting
deals with how the funds of the government are recorded and
reported.
 Auditing
There are two main types of auditing: external and internal.

External auditing involves an independent Certified Public

Accountant (CPA) examining financial statements to express
an opinion on fairness and compliance with accounting
principles. This audit reviews a selected sample of records, and
the CPA issues an audit report.
 Auditing
Internal auditing assesses operational efficiency in
safeguarding company assets, accuracy of accounting
data, and adherence to management policies. It evaluates
the adequacy of internal controls through tests on
segregation of duties, policies, procedures, authorization
levels, and other controls implemented by management.
 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.
 Cost Accounting
Cost accounting, seen as a subset of management
accounting, involves recording, presenting, and
analyzing manufacturing costs. It proves particularly
valuable in manufacturing businesses due to their
complex costing processes. Cost accountants analyze
both actual and standard costs to assist managers in
making informed decisions about the company's future
operations.
 Cost Accounting
Cost accounting will also help the owner set the
selling price of his products. For example, if the
cost accounting records shows that the total cost to
produce one can of sardines is PHP50, then the
owner can set the selling price at PHP60.
 Accounting Education
This accounting branch focuses on nurturing future
accountants through the design of pertinent accounting
curricula. Accounting professionals may transition into
academic roles as faculty members in educational institutions.
Accounting educators play a crucial role in advancing the
profession by delivering effective teaching, publishing research,
and encouraging students to pursue accounting careers. They
share their expertise to underscore the significance of
accounting and its application in daily life to inform and
inspire students.
 Accounting Research
Accounting research is dedicated to acquiring new knowledge
about the impact of economic events on the processes of
summarizing, analyzing, verifying, and reporting
standardized financial information, as well as understanding
the effects of reported information on economic events.
Researchers choose specific subject areas, such as information
systems, auditing, corporate governance, financials,
managerial, and tax, and employ various methodologies.
 Accounting Research
Academic accounting research follows a scientific
method, addressing all aspects of the accounting
profession, while practicing accountants conduct
research to solve specific client problems. This research is
instrumental in informing standard-setting bodies
worldwide to develop new standards addressing recent
issues or trends in global business.
Thank
you!