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OC. Financial accounting
Financial accounting is concerned with the external environment of an organization and reports on the activities of the company as a whole rather than individual departments or divisions, projects, and operations. It focuses on providing information to external users such as investors, creditors, and regulatory agencies to assess the overall performance and financial position of the organization.
Financial accountants prepare financial statements like income statements, balance sheets, and cash flow statements that summarize the company's financial performance and position. These reports are vital for stakeholders to make informed decisions about the company.
In contrast:
- Auditing involves examining financial records to ensure accuracy and compliance with laws and regulations.
- Certified public accountants (CPAs) are professionals who provide accounting services like auditing, tax preparation, and consulting.
- Managerial accounting focuses on providing internal management with financial information for decision-making within the organization.
- Advisory services encompass a range of consulting services provided by accounting firms to assist organizations in various areas such as risk management, strategy, and financial planning.
