“The righteousness of the upright will rescue them, But the treacherous will be caught by their own greed.”
“One who withholds grain, the people will curse him, But blessing will be on the head of him who sells it.”
“If the righteous will be repaid on the earth, How much more the wicked and the sinner.”
Sources:
(1) Accounting Verse – Accounting Basics
(2) OpenStax Textbook – Principles of Accounting Vol.1 (Financial Accounting) = [PoA.1]
(3) OpenStax Textbook – Principles of Accounting Vol.2 (Managerial Accounting) = [PoA.2]
(4) Certified Internal Auditor – Certification Homepage
(5) Certified Fraud Examiner – Certification Homepage
(6) Fiduciary Accounting – Accounting Tools
(7) The Nuts and Bolts of Fiduciary Accountings – Francine Lee
(8) Florida Bar Assocation Article – Florida Adopts Uniform Fiduciary Income And Principle Act
(9) Investopedia – Forensic Accounting: What It Is, How It’s Used
(10) ACFE – Forensic Accounting
This is Post #2 in the Accounting Series. Post #1 is found here.
All Posts in The Accounting Series will focus on learning accounting principles as practiced within the United States.
Accounting Basics, Continued.
In our first post, we focused on developing a basic understanding of the overall field of accounting. An overall definition of accounting was provided. Several regulatory agencies were overviewed. We provided an overview of the two main branches of accounting: financial & managerial accounting.
This post will provide a general overview of a few other branches within accounting.
Aside from financial & managerial accounting, these other accounting branches include:
- Cost Accounting
- Auditing
- Tax Accounting
- Accounting Information Systems
- Fiduciary Accounting
- Forensic Accounting
Cost Accounting
Cost Accounting can be considered a sub-branch of the managerial accounting branch.
Neither cost accounting nor managerial accounting utilize the GAAP principles of financial accountants. However, cost accounting differs from managerial accounting by focusing primarily on quantitative efforts. Managerial accountants differ by having both a quantitative and qualitative approach.
Cost accounting records, presents, and analyzes manufacturing costs. Cost accountants help prepare manufacturers for future actions by analyzing actual costs with budgets & standards. Manufacturing costs include: “direct materials, employee wages, and supplies used in the manufacturing process.”1
Cost accountants could help a manufacturing company calculate the cost of several alternatives for a particular component or supply needed to produce their product. Beyond the unit price savings, cost accountants may also consider qualitative aspects2 like: impact on the morale of employees, supplier’s ability to produce, logistical feasibility, and additional contract considerations.
Auditing
Auditors focus on “ensuring activities are carried out as intended or designed.”3
Internal auditors evaluate the company’s internal control system through tests & reviews. Internal auditors may review how resources, like cash, flow internally through a company. Internal auditors will analyze the processes happening with the intended company policies, external regulations, and industry standards.
External auditors are typically independent public accountants that examine financial statements “with the purpose of expressing an opinion as to fairness of presentation and compliance with GAAP.”
Internal auditors may choose to gain a professional certification: Certified Internal Auditor (CIA), along with a CPA.
Tax Accounting
Taxes need to be paid. Taxes can be complex. Some of the taxes entities may be required to pay include: income taxes, payroll, worker’s compensation, unemployment, property taxes, sales tax, use taxes, and inventory taxes.4
Many of these taxes require tax returns and related paperwork to be filed. Some organizations may have to comply with local, state, federal, and international tax regulations.
Tax accountants help entities & individuals file taxes & “follow rules set by tax authorities.”
Tax accountants provide advisor services, provide legal tax minimization strategies, and evaluate tax decisions.
“The righteousness of the upright delivers them, but the unfaithful are trapped by evil desires.”
“People curse the one who hoards grain, but they pray God’s blessing on the one who is willing to sell.”
“If the righteous receive their due on earth, how much more the ungodly and the sinner.”
Accounting Information Systems
Computers & electronic technologies are an integral & non-negotiable aspect of many economic entities. Accountants that specialize in the branch of Accounting Information Systems help develop, install, implement, and monitor their accounting software & databases.
5Many of these individuals involve a combination of accounting & computer information systems. The specialist in this field will help their organization find the appropriate accounting software for their present needs while also preparing for future growth.
Fiduciary Accounting
Many entities & individuals utilize trusts, guardianships, conservatorships, and estates. Often the fiduciary of these accounts, has a duty to account.
Many of these accounting duties are regulated by state law, some of which have adopted a variation of the Uniform Fiduciary Income & Principal Act (UFIPA).
An accountant within the branch of fiduciary accounting will specialize in the “handling of accounts managed by a person entrusted with the custody and management of property of or for the benefit of another person.” These accountants will record transactions & provide periodic reports for activity that occurs within a trust or estate, all while adhering to proper governing regulations & law.
Forensic Accounting
Forensic accountants specialize in legal investigations with a focus on fraud, claims, and litigation regarding information uncovered within the overall field of accounting.
Since there will always be individuals & companies that perform acts of fraud (acting with the purpose to deceive/cheat/lie), there will always be a need for forsenic accountants. Crimes they help investigate include: money laundering, securities fraud, bankruptcy fraud, credit card fraud, & embezzlement.
Some forensic accountants utilize their expertise in an alternative legal process called alternative dispute resolution (ADR), others are utilized in the traditional court system.
Many forensic accountants work for “insurance companies, financial institutions, and law enforcement agencies.”
Some forensic accountants look for “hidden assets in divorce cases and investigate breaches of contracts, tort, or disagreements relating to company acquisitions like breaches of warranty, or business valuation disputes.”
Forensic accountants may choose to become Certified Fraud Examiners (CFE).
“Good character is the best insurance; crooks get trapped in their sinful lust.”
“Curses on those who drive a hard bargain! Blessings on all who play fair and square!”
“If good people barely make it, what’s in store for the bad!”
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