FABM Branches of Accounting

• Sectors of Accounting Profession (Ra 9298)

  -Practice of Public Accountancy (Public Practice)

  -Practice in Commerce and Industry (Private Accounting)

  -Practice in Government (Government Accounting)

  -Practice in Education / Academe
• Public Practice

  -In this sector, accountants provide different business and accounting services to their clients. They perform or offer to perform any activity that will result to issuance of an attest report that is in accordance with professional standards.
• Public Practice

  -External Auditing

  -Tax Preparation and Planning Service

  -Management Consultancy or Advisory Services
• Private Accounting

  -Accountants can be employed in executive positions in companies. They can assume the positions of vice president for finance and chief accountant (controller). They can also work as internal auditors or budget officers. They are directly involved in the management of the company’s operations.
• Private Accounting

  -Financial Accounting

  -Management Accounting

  -Tax Accounting

  -Cost Accounting

  -Budgeting

  -Internal Auditing

  -Accounting Information System
• Government Accounting

  -CPAs can be hired in many accounting and accounting-related positions in government agencies and units such as the Bureau of Internal Revenue, Department of Budget and Management, Department of Finance, and Commission on Audit.
• Accounting Education

  -Accountants can also be employed as instructors in colleges and universities that offer accounting subjects. They educate aspiring accountants and equip them with knowledge and skills not only through accounting subjects, but also through business law subjects for their future profession.
• Branches/Areas of Accounting

  -Financial Accounting

  -Management Accounting

  -Government Accounting

  -Auditing

  -Tax Accounting

  -Cost Accounting

  -Accounting Education

  -Accounting Research
• Financial Accounting

  -Primarily concerned with the recording of business transactions and the eventual preparation of general purpose reports (i.e., financial statements) that are intended for internal and external users.

  -In the preparation of financial statements, strict compliance with generally accepted accounting principles or GAAP is observed.

  -Area of accounting that emphasizes reporting to external users such as creditors and investors.
• Management Accounting

  -Accumulation and preparation of financial reports for internal users only.

  -This branch deals with the needs of the management rather than strict compliance with generally accepted accounting principles.

  -Managerial accountants work within companies and organizations to direct internal financial processes; monitor costs, sales, spending and budgets; conduct audits; identify past trends and predict future needs; and assist company leaders with financial decisions.
• Government Accounting

  -Encompasses the process of analyzing, classifying, summarizing and communicating all transactions involving the receipt and disposition of funds and property of the national government and its political instrumentalities and interpreting the results thereof.
• Auditing (Or Specifically External Auditing)

  -Is the examination of financial statements by independent certified public accountant for the purpose of expressing an opinion as to the fairness with which the financial statements are prepared.
• Two Types of Auditing

  1. External Auditing (Financial Statements Audit)
  2. Internal Auditing (Operational Auditing)
• External Auditing (Financial Statements Audit)

  -Examination of financial statements for the purpose of determining the fairness with which the financial statements are prepared.
• Internal Auditing (Operational Auditing)

  -Independent, objective assurance and consulting activity designed to add value and improve an organization’s operations and processes in order to achieve its objectives.
• Tax Accounting

  -Includes the preparation of tax returns and determination of tax consequences of certain proposed business endeavors.

  -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

  -A discipline that focuses on technique or method for determining the cost of a project, process or services for the purpose of planning and controlling activities, improving quality and efficiency, and for making decisions.

  -Identifies, defines, measures, reports and analyzes the various elements of direct and indirect costs associated with producing and marketing goods and services.
• Accounting Education

  -Involves teaching of accounting, auditing, management advisory services, finance, business law, taxation and other technically related subjects in an educational institution.
• Accounting Research

  -Accounting research examines how accounting is used by individuals, organizations and government as well as the consequences that these practices have.
• Two Types of Accounting Research

  1. Academic Accounting Research
  2. Research by Practicing Accountants
• Academic Accounting Research

  -Addresses all areas of the accounting profession, and examines issues using the scientific method; it uses evidence from a wide variety of sources, including financial information, experiments, computer simulations, interviews, surveys, historical records, and ethnography.
• Research by Practicing Accountants

  -Focuses on solving immediate problems for a single client or small group of clients (e.g., decision-making on the implementation of new accounting or auditing standards, the presentation of unusual transactions in the financial statements, and the impact of new tax laws on clients)
• Other Fields/Specialized Areas of Accounting

  1. Forensic Accounting / Investigative
  2. Accounting Information Technology Services
  3. Environmental Accounting
  4. International Accounting