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Topic 2

Branches
of Accounting
Learning Objectives:
Differentiate the branches of
accounting
Explain the kind/type of
services rendered in each of
these branches
Branches of Accounting
Public Accounting
External Auditing
Tax Preparation and Planning Services
Management Advisory Services
Private Accounting
Financial Accounting
Cost Accounting
Budgeting
Accounting Information System
Tax Accounting
Government Accounting
Accounting Education
Branches of Accounting
Financial Accounting
- under private accounting; provides economic and
financial information for investors, creditors, and other
external users
- it aims to report the financial results (ex. profit or
loss in the operations during a specific period) financial
position (ex. assets, liabilities and equity) of the
business by the end of the period.
- it is governed by the established body of standards
and principles called the generally accepted accounting
principles (GAAP)
Branches of Accounting
Management Accounting
- under private accounting; provides information that
managers use for decision-making
- helps managers control activities within the firm, and
to decide what products to sell, where to sell them,
how to source those products, and which managers to
entrust with the companys resources
Branches of Accounting
Government Accounting
- is a system used in government offices to record and
report financial transactions
- it reveals how public funds have been generated and
utilized in both local and national level
- Commission on Audit auditor, BIR examiner, budget
officer of the Department of Budget and Management,
or bank examiner of Bangko Sentral ng Pilipinas
Branches of Accounting
Auditing
Internal Auditing
- branch of private accounting that reviews of business
operations to check if they are complying management
policies; facilitated by an internal auditor
External Auditing
- can be initiated by the company by hiring external
auditors or can be conducted by government agencies
like BIR to verify compliance on government policies
Branches of Accounting
Tax Accounting
- deals with the preparation of various tax returns and
doing tax planning for businesses
Cost Accounting
- the purpose of cost accounting is to analyze the
expenditure so as to ascertain the cost of various
products manufactured by the firm and fix the price
Branches of Accounting
Accounting Education
- the branch of accounting responsible for training
future accountants; engage in teaching accounting,
financial management, taxation, and other related
business course
Accounting Research
- isresearchon the effects of economic events on the
process ofaccounting, and the effects of reported
accounting information on economic events; it
encompasses a broad range ofresearchareas including
financialaccounting, managementaccounting, auditing
and taxation
Accountants (CPAs) in Specialized Areas
Forensic Accounting
- provides detective work needed to investigate and
examine evidence of white-collar financial crimes such as
fraud and stealing
Information Technology Services
- designs and implements customized accounting
software systems; determine which decisions are the
most financially and technologically sound for the
business
Accountants (CPAs) in Specialized Areas
Environmental Accounting
- determine how companies can be both profitable and
environmentally responsible; do environmental
compliance audits and set up preventive systems to
ensure compliance and avoid future environmental-
related claims or disputes
International Accounting
- involves in international trade rules and regulations,
international mergers, government regulations, tax laws,
and overseas transactions