There are various niches of business accounting. The classification of the types of business accounting depends on the type of accounting a professional does and the domain in which a CAP, CPA or accountant functions.
Different Niches Of Business Accounting
The different types of business accounting are typically categorized as – financial accounting, management accounting, governmental accounting, tax accounting, forensic accounting, project accounting and social accounting.
• Financial accounting deals in account statements, profit and loss, financial projections and everything that is encompassed within the world of credit and debit.
• Management accounting is more customized for business management purposes. In reality, management accounting is more diverse and detailed than financial accounting because the former is an illustration that includes the latter.
• Governmental accounting is often referred to as federal accounting or public accounting. It deals in any type of accounting information system that is applicable in the public sector. While the basics of governmental accounting are embedded in financial accounting, the approach and practices are different because of the different objectives of the public sector.
• Tax accounting deals in any type of assessment pertaining to taxation.
• Forensic accounting is an amalgamation of accounts and forensic investigation. It is usually applied in financial disputes, litigation and lawsuits, in either civil or criminal cases. Financial frauds demand the involvement of a forensic accountant.
• Project accounting encompasses all financial calculations in a particular project but it doesn’t just include bookkeeping or keeping records but also making decisions and contributions to efficiently use available cash and to cut costs.
• Social accounting deals in implied aspects of a company’s corporate accounts on social and environmental welfare.
Different Specializations Of Accountants
An accountant may choose a desired specialization based on his or her skills, personal preference and career prospects. However, some types of accountants would have to be specifically certified to be able to take up on certain specializations.
The different types of accountants based on certifications are –
• CPA – A certified public accountant, also known as chartered accounting professional or CAP, specializes in all types of business accounting, taxation, auditing, consultation as well as forensic accounting.
• Management Accountant – A management accountant works for companies and specializes in budgeting, cost control, performance evaluations and in strategies or policies to facilitate better financial well being of a company.
• Government Accountant – A government accountant specializes in general accounting and taxes but additionally is an expert on federal regulations and IRS statutes.
• Internal Auditor – An internal auditor is a forensic accountant who specializes in preventing or spotting financial fraud, mismanagement of funds and inefficient accounting policies among others.