Subfields of Accounting Types

Accounting is a broad phrase that incorporates many different meanings and methods of recording and evaluating operations. Subfields of Accounting are the numerous forms of accounting. Financial accounting, management accounting, human resource accounting, and so on are examples.

12 Subfields of Accounting

• Financial Accounting
• Managerial Accounting
• Cost Accounting
• Auditing
• Tax Accounting
• Fiduciary Accounting
• Project Accounting
• Government Accounting
• International Accounting
• Fund Accounting
• Political Campaign Accounting
• International Accounting

Subfields of Accounting- #1 Financial Accounting

• Financial accounting encompasses the documentation and clarification of business transactions.
• It includes the preparation and presentation of financial statements.
• Adherence to GAAP principles is a fundamental aspect of financial accounting.
• The focus is primarily on historical data, providing a retrospective view of the company's financial activities.
• The analysis in financial accounting extends to scrutinizing the company's balance sheet.
• Additionally, financial accountants prepare profit and loss statements, offering insights to management or stakeholders.

Subfields of Accounting- #2 Managerial Accounting

• Managerial accounting offers information tailored for internal use within a company, specifically for management.
• In contrast to financial accounting, managerial accountants concentrate on monitoring the utilization of funds rather than quantifying monetary amounts.
• The emphasis of managerial accounting is on meeting the specific needs of management and may not strictly adhere to GAAP accounting rules.
• The Chartered Institute of Management Accountants has established a set of accounting principles known as Global Management Accounting Principles (GMAP), directly applicable to this field.

Subfields of Accounting- #3 Cost Accounting

• Cost accounting, seen as a subset within management accounting, centers on the assessment of costs.
• It comprehensively examines all facets of manufacturing to precisely calculate the cost of a project or endeavor.
• The primary objective is to analyze manufacturing costs thoroughly and generate reports that guide decision-makers.
• Decision-making insights include strategies to reduce costs or judicious timing for increased spending.
• It plays a vital role in monitoring projects, focusing on waste reduction and effective cost control.

Subfields of Accounting-  #4 Auditing

• Two main types of auditing exist: external and internal auditing.
• External auditing entails an independent third party reviewing a company's financial statements to ensure accurate presentation and compliance with GAAP.
• Internal auditing focuses on assessing how a business organizes accounting responsibilities, determining authorized individuals for specific tasks, and evaluating existing procedures and policies.
• The primary goals of internal auditing include pinpointing fraud, mismanagement, and waste within a business.
• Additionally, internal auditing serves to identify and control potential weaknesses in the company's policies and procedures.

Subfields of Accounting- #5 Tax Accounting

• Tax accounting adheres to state and federal tax regulations for tax planning and return preparation.
• Focuses on reporting the impact of taxes on businesses and may provide advice on minimizing taxes or understanding tax-related decisions.
• Calculates income and other taxes based on the business structure, navigating tax laws for sole proprietorships, corporations, and limited liability corporations (LLCs).

Subfields of Accounting- #6 Fiduciary Accounting

• Manages accounts entrusted to individuals responsible for property custody or management.
• Tracks and reports receipts and disbursements to ensure proper fund allocations.
• Commonly used in trusts, receiverships, and estates.

Looking for the Best Commerce Coaching?

Enroll Now in PW Commerce Batches!

Subfields of Accounting- #7 Project Accounting

• Applied in industries like construction or engineering, specifically for large projects.
• Analyzes costs and generates reports at intervals to monitor a project's financial progress.
• Provides historical data for informed decision-making in future project activities, such as cost-saving measures or budget adjustments.

Subfields of Accounting- #8 Forensic Accounting

• Also known as legal accounting, deals with legal matters like bankruptcy, fraud, or mismanagement.
• Conducts investigations for court and litigation cases, calculating damages and overseeing dispute resolutions.
• Serves lawyers, law enforcement, insurance companies, government organizations, and financial institutions.

Subfields of Accounting- #9 Fund Accounting

• Works with non-profit organizations to ensure accurate fund allocation, adhering to company policies or laws governing NPOs.
• Ensures proper fund distribution for entities like charities, churches, educational institutions, hospitals, government agencies, and clubs.

Subfields of Accounting- #10 Government Accounting

• Oversees and records state and federal fund allocation and disbursement.
• Covers aspects like social accounting, measuring costs related to federal land use, climate change, or welfare fund utilization.
• Tracks money flow through various government agencies, ensuring compliance with budget requirements.

Subfields of Accounting- #11 Political Campaign Accounting

• Manages the development and implementation of finance systems for political campaigns.
• Involves transaction accounting and donation monitoring to comply with federal and state laws governing political campaigns.
• Practiced in local, state, or nationwide political races.

Subfields of Accounting- #12 International Accounting

• With the expansion of global business, international accounting learns and applies laws and regulations in other countries.
• Focuses on conducting business ethically and fairly, following not only GAAP but also International Financial Reporting Standards (IFRS), the global accounting standard.