Financial Dictionary -> General Finance -> Accounting

Accounting is a profession in the financial industry which involves the accurate bookkeeping of a business's or an individual's finance, for internal and personal analysis and for determining what is annually owed as tax. Accounting does not necessarily have to be done by an accountant, with many individuals, small businesses and freelancers keeping their own books. On the flip side large businesses often have their own accounting departments. Falsifying accounts or providing false information is taken very seriously if done for tax dodging purposes. See Generally Accepted Accounting Principles for more info.

Most accounts usually include and detail the value of assets, liabilities, income, and expenses. If the specific purpose is to help with the yearly tax return there should be detailed entries on every form of income, every business related expense (for tax deductions) and the associated receipts at hand for proof, should the 'tax man' request proof of earnings and expenses.

Public companies often make accounting and financial information public, not only to tout any successes, but for investors to analyze and interpret the data to aid them in their investment decisions. If a public company tried to hide their financial records there would be a serious lack of trust. Why would you buy shares in a company if you had no idea how well they were performing? That being said there are various techniques accountants use to 'window dress' companies accounts in order to make them seem more appealing. (Note this is different from straight up fraud).

Modern accountancy utilizes a whole host of different computer software; the basic form being spreadsheets. Gone are the days of stacks of paper of handwritten ledger books, now everything is a lot easier to update and calculate.

Auditing is term closely linked to accounting which involves going through all of the accounts and double checking their accuracy.